Adland spends a significant amount of time talking about and mulling over whether agencies' organizational structures are modern enough to meet the needs of a changing marketing landscape. Now Mediabrands, the Interpublic Group of Cos. media unit, is scrapping a decades-old model, declaring that its setup and that of all other global agency networks is antiquated.
Most large agencies are structured around four key geographic regions: North America; Latin America; Europe, the Middle East and Africa (known as EMEA); and Asia Pacific. MediaBrands is shifting from those traditional regions to three clusters, G14, World Markets and North America. The change, effectively immediately, will apply to both of its global media agency networks, Universal McCann and Initiative.
The G14 unit includes the agencies' operations in Australia, Brazil, China, France, Germany, India, Italy, Mexico, Russia, Spain, The Netherlands and the U.K. The World Markets group includes Austria, Belgium, Greece, the Middle East, Peru, Portugal, South Africa, South Korea, Turkey and Vietnam.
Jim Hytner, who was president of EMEA, becomes president of the G14 division, while Mauricio Sabogal, who was worldwide managing director at Initiative, becomes president of World Markets at Universal McCann and Initiative.
Mediabrands' global CEO, Matt Seiler, said the move reflects a change in the way marketers do business, one he claims is less about geography and more about priorities for growth and pinpointing where around the globe marketing investment will be most valuable. He estimates most marketers would say the U.K. and Japan have more in common than the U.K. and Portugal.
"The fact that one's in Asia and one's in Europe is completely irrelevant," said Mr. Seiler by phone yesterday, ahead of Interpublic's investor day, being held today, when he was expected to discuss the new structure. He noted that language differences aren't necessarily a top concern anymore. "There will always be a level within our organizations where there will be a common business reality that transcends the market differences. Our hope is to leapfrog where the other agency networks are in order to better serve our clients based on their actual needs, not just where those markets fall on globe."
The move is one sign that Mediabrands' new leadership is eager to shake things up and puts its stamp on the unit. Mr. Seiler and Jacki Kelley were both promoted in January. He stepped up from his post as global CEO of Universal McCann, which is the largest agency within Mediabrands, and was succeeded by Ms. Kelley, who previously served as North American CEO of UM.
But it's also a move that's not in line with the way marketers are already structured today -- begging the question of whether Mediabrands' new plan places it too ahead of the curve. Agency executives are in the midst of communicating the new reorganization to clients and employees. For its part, agency executives say they're OK with not being in lock-step with clients. "Certainly we are putting in ourselves [in a position] where we are leading clients ... versus clients requiring it right now -- which is a position we want to be in," said Ms. Kelley.
Although the move means the two media shops under Mediabrands are more aligned than in the past, Mr. Seiler said Universal McCann and Initiative will remain distinct properties.