Universal McCann plays both sides

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Universal McCann proved the horse to beat in the race for Advertising Age's U.S. Media Agency of the Year honors for 2002.

Under the precocious stewardship of Robin Kent, at 47 one of the youngest worldwide CEOs among the top media agencies, the New York-based media shop of Interpublic Group of Cos.' McCann-Erickson WorldGroup ran away with new billings of $1.7 billion. It also managed to generate buzz, something big corporate entities aren't really expected to do.

The agency won a few large pieces of media business on a full-service basis, most notably the $250 million Wendy's International account, in tandem with creative sibling McCann-Erickson Worldwide. And Mr. Kent crowed about his success in an Advertising Age letter to the editor (AA, Nov. 11), praising the virtues of the bundled media shop. "Our model of operation is unique," Mr. Kent said, "and this position has placed us at a vantage point."

Universal's wins and Mr. Kent's letters unnerved many on Madison Ave. "If you give them the award," says a leading competitor, "you'll be validating their model."

That raises the question: What exactly is the Universal McCann model?

The rise of the separate media agency has been the big ad story of the last decade.

on its way

McCann-Erickson began dabbling in separation early. In 1990, the Manchester, U.K., office of McCann opened a separate media-buying service dubbed simply Universal, taking its name from Universal McCann, a financial and recruitment advertising unit that had launched in 1975 and then closed about 10 years later. In 1991, McCann's media department in Europe was joined with that of sibling agency Lowe Howard-Spink, London, creating a partnership called Universal Media. Lowe eventually dropped out of the deal.

Four years later, Interpublic acquired Western International Media, and within a year, the London office of McCann opened a separate media arm dubbed Universal McCann. All European offices of McCann simultaneously separated out their media-buying departments under this new name. Media planners followed shortly after. Finally, in 1999 the Universal McCann marquee was imported to New York.

Although the idea behind the divorce of media and creative was to make media buying more efficient and a bit more independent, the new shop's founders were quick to set a limit.

"We believe the media independent route will lead to the loss of strategic skills gained by working in a full-service agency," Trista Grant, Universal McCann London's founding managing director, told Campaign in 1995. "There are already signs that the independents have gone too far down one route too early and are trying to buy consumer-driven strategic skills from full-service agencies." Ms. Grant then said Universal McCann, instead, would "offer a blend of full-service and media independent skills."

That's where Universal McCann stands today, independent but also proudly tied to the mother agency. That split personality, arguably, is one of the reasons the shop was so successful in 2002. Universal was able to woo both genders, the full-service ladies like Wendy's and the media-only lads such as Maytag Corp.

"We can be integrated, offering full services as part of the McCann team," says Mr. Kent. "Or we can be completely separate with our own portfolio of services."

missed out on reviews

When Mr. Kent first arrived in 2000, the new-business landscape was dominated by big media-only reviews, and Universal had just missed out on them: Unilever's $700 million consolidated media business, Pfizer's $700 million account, Verizon Communications' $750 million media work and General Motors Corp.'s $2 billion media-planning account.

At the time, Universal was generally seen as a media service for McCann clients and was either not invited to these pitches or didn't make it to a final cut. Mr. Kent's mission was to make it clear to advertisers that Universal could play the independent game.

In 2002, his efforts bore fruit. The shop won $1.6 billion in media-only business. But take a second look at this new-business list: Much of it is McCann clients. That leads Mr. Kent into a discussion of the middle opportunity-the clients who are neither full-service nor simply media-only, but rather "they fall into both buckets."

"Though we share some of the [brand] names, we have different contracts, different groups to deal with and in all cases a different portfolio of brands," Mr. Kent says. "There is very little crossover. People on the outside will look and say, `Ahh, Nestle, that's a McCann client.' But actually that's not true." Other examples include American Airlines, whose global creative is done by McCann but in the U.S. it's handled by Interpublic sibling Temerlin McClain, Dallas. According to Mr. Kent, some Sony Corp. business-not creative-is handled by McCann units.

Universal McCann, by the way, was the incumbent on the $300 million Sony Pictures portion of the consolidated business, in the end it wound up with the full $600 million account. "The whole account was up for grabs," notes George Hayes, agency exec VP-director of AOR accounts. "We were in danger of losing pictures' business, but we won it back."

Marketers "want us to be able to work with their other agencies, like Publicis and Leo Burnett Co.," he says.

`head and shoulders above'

Universal's most striking media-only win was Maytag Corp., which consolidated media buying and planning for the appliance division, including Maytag and Jenn-Air brands. "We saw them as being head and shoulders above the competition in terms of their media-buying leverage and strategic planning processes," says David Miller, Maytag senior director-brand management. "Universal McCann, being a standalone agency, met the needs of working with our respective creative agencies."

But why split hairs? Whatever way you look at it, Universal McCann was a new-business machine last year. As Sean Cunningham, exec VP-managing director of Universal McCann, New York, points out, there was no silver spoon in the drawer. Universal had to pitch for every single piece of business, even full-service Wendy's.

Wendy's clearly put media in the co-driver's seat, says Mr. Cunningham.

"Universal pitched with the full agency," recalls Michelle Fedurek, Wendy's VP-media services. "This was not a traditional pitch, it was full-blown: We looked at strategic planning, creative, account services and media all as one unit. It was not separated out. We were looking for an overall fit, who could be the best partner. All of the parts of McCann were appealing."

Beyond new business, Universal McCann made other huge strides last year. It challenged its other reputation as volume media buyer by building a cohesive media strategy practice and giving it a name, Communications Architecture, and a director, Marston Allen. Mark Stewart, formerly exec VP and North American media director, was named to the new position of exec VP-chief strategy officer.

"My job is to concentrate on the quality of the product," says Mr. Stewart, a media planner who had once been considered for Mr. Kent's position. "There were a couple of horses in that race," says Mr. Stewart. "Robin is noticeably older than I am,"quips the 43-year-old Mr. Stewart, "and he was running our biggest region [as exec VP-regional director for Europe, Middle East, Africa]. His expertise is being a general manager, and he's great at new business. My strength was always strategy."

Key personnel changes were also responsible for much of Universal's success this year, says Murray Dudgeon, exec VP-worldwide operations director. "We moved to a discipline-based management structure rather than regional-based," he says. "While Robin and myself took on a day to day responsibility for running North America."

Other promotions include Mr. Hayes, a top negotiator who led Universal's local buying group LCI, was elevated to the new position of AOR director, in charge of Sony and other AOR accounts. Peggy Kelly, formerly VP-advertising services at Clairol, was hired in the new position of global client services director for Johnson & Johnson, and Kim Kadlec, formerly senior VP-director of client services at Zenith Media, is senior VP-director of the Coca-Cola Co.'s broadcast buying group.

enter jean pool

Universal's ability to recruit top executives from rival agencies was another sign last year of the company's strength. Jean Pool, a high-profile name in the business, was lured from MindShare to take the job of exec VP-director of operations for North America, and Annette Cerbone, formerly VP-business development and national sales at Discovery Networks, was tapped for director of national broadcast. Greg Smith, formerly senior VP-chief information officer at Zenith Media, who is Universal's exec VP-global systems director.

Universal McCann didn't just hire new blood, it elevated worthy stars in the system, including 15-year McCann media veteran Donna Wolfe, boosted to exec VP-director of broadcast for Universal McCann North America. Ms. Wolfe is a small woman, but she's got a lot of clout with control of $2.6 billion of Universal's cable, network and syndication dollars during the upfront season. She's got leverage, and yet, she' a fan of integration, and, naturally, of Mr. Kent.

"Robin is an excellent manager," says Ms. Wolfe, "He has brought all of us a lot closer together. He is a champion for media and a champion for Universal McCann, and he loves to win as we all do. Last year was difficult in terms of our business and the economy overall, and yet we were very successful. I believe we'll continue. That's what keeps us all going."

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