Sorting Out the Power of Bought, Earned and Owned Media

Q&A: Carat CEO Martin Cass

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NEW YORK (AdAge.com) -- When Martin Cass took over as head of Carat's U.S. operations some nine months ago, it was the first of a series of managerial changes for the agency and its parent company, Aegis.

Martin Cass
Martin Cass
One month after Mr. Cass' appointment, Aegis CEO Robert Lerwill stepped down and was replaced by Chairman John Napier. This May, Sarah Fay resigned as CEO of North America for Aegis Media and was replaced by Nigel Morris, former CEO of Aegis digital network Isobar.

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With that much activity at the head of the organization, a lack of new-business wins and the steady flow of rumors that Havas Chairman Vincent Bollore was biding his time before eventually making his move on Aegis, a dark shadow was cast over the agency in the eyes of many in the industry.

"Whenever you have change, there are people who don't like that change and are prepared to feed on that, and we have had change," Mr. Cass said. "The changes we have gone through in the last 12 months have been pretty significant."

And while he is happy with the direction Carat is heading and the progress the agency has made, he said, he would like it to be even further along in terms of the plan management has forged. On the new-business front, the agency recently snagged one of the more high-profile global pitches out there when it was the last man standing in the $415 million Nokia pitch.

Mr. Cass recently spoke with Ad Age about a wide range of topics including the stalled upfront, those executive changes within Aegis, which media sellers are thinking out of the box and the industry's perception of Carat.

Ad Age: What's your take on the current state of the upfront?

Martin Cass: Slow, very slow. Everyone, everywhere in the client community is under pressure on costs and the networks are no different. There aren't going to be too many customers looking for increases in costs this year. And that's tough, because the marketplace has been pretty buoyant the last few years.

Ad Age: When do you think things will move?

Martin Cass: People are inching towards conclusions. I suspect it will take a longish time, but they are inching towards conclusions. Normally you say when one person moves, the rest will follow, but I don't know if that's true. You'll find that the big players will sit and take their time. There's no rush, so it could be a very long upfront.

Ad Age: What are you hearing from clients?

Martin Cass: They are all saying they're under significant cost pressures, which they are passing on everywhere. The shift and change in the economy is seismic, and the idea you would go back into any market and say, "What we did last year is fine, and we'll do the same again," is a thing of the past ... for this year anyway.

Ad Age: What are media sellers telling you?

Martin Cass: They are doing all they can to hold on to their position. Some are stronger than others and some have better stories than others. There will not be as much money in the marketplace this year as there has been in the past, and the money won't go as deep as it used to. So you may see some of the smaller parts of the cable networks suffer, and there will be a regauging of what good value looks like in this market.

Unlike previous years, where how far was up, this year is more a case of: Where is a smart and appropriate accommodation so that the price is reflective of value and that the media owners can continue to produce decent products? After all, nobody wants to see a situation where the product goes backwards. That's not in anyone's interest.

Ad Age: What surprises have you encountered in the first nine months on the job?

Martin Cass: I was surprised, like everybody else, how deep this trough that we seem to be in the middle of was. The realization of a market that was in a position that no one in living memory had ever seen was a wake-up call for me.

[But] I'm always pleasantly surprised by the resiliency of people and the continued willingness to push the boundaries and try something new even in a marketplace where people are trying to batten down the hatches.

Ad Age: What's the impact of all of the changes that have taken place at Aegis internally?

Martin Cass: Pretty positive actually. The agency knows and gets that we will succeed by being challenging and different. We are not part of the establishment. We have a completely new management team, but [Mr. Morris and I] have been at Carat and Aegis for 15 years. So it's not as if we are new to the business.

Ad Age: What do you think the external perception of the agency is?

Martin Cass: We have a plan that we laid down in December of last year, and we are working really hard to make sure it comes to life. Externally, it's always interesting to know what people think of you, but it's the work you do in pitches and what you're able to do with your current customer base that's important, and the rest will follow.

Ad Age: Many in the industry feel Carat is lacking a sense of direction.

Martin Cass: Rumors of our demise have been greatly exaggerated. I try not to get too excited by the highs and lows of this, because one minute you're a hero, and the next minute you're a zero, and neither are probably true. There are five other new North American CEOs at media companies. A lot of us were in the same boat. Change should be a positive force, but it's up to the individuals that are managing that change to make sure it is. And if it is, you will be successful, and that is definitely our aim.

Ad Age: Are you on the right track?

Martin Cass: Yes. I don't want to say everything is fixed. We are getting there and are a work in progress, but we are way ahead of where we thought we were going to be, and we believe we are going in exactly the right direction.

Ad Age: How far are you from where you want to be?

Martin Cass: We are halfway through the year and way beyond halfway through the business plan. It wasn't as instant as what my friend Richard Beaven was able to achieve at [Interpublic Group of Cos.'] Initiative, and he has done remarkable things. He was there for a long period of time before things started to turn.

It's like a world-class athlete. There are months and months of work put in. So when you start seeing the end results, it usually means that people got it right six to eight months beforehand and had a bit of luck. Those are the two things you need: hard work and some luck.

Ad Age: Was there one thing you felt needed to be addressed when you took over?

Martin Cass: We were doing a lot of the right things, we just weren't going fast enough and we weren't focused enough on the really important things.

Ad Age: What were some of those?

Martin Cass: Making sure we were focused on getting a really strong consumer-insight business underneath us powering the company and making sure our digital product was first-class and integrated and translating all of that into new business and current customer work. And you are starting to see some of that come to life.

Ad Age: Sarah Fay's big push was on social media. What did you learn from that and how much did it change your thinking about planning media buys?

Martin Cass: The really interesting thing about social and the vehicle that carries it is this idea of earned media -- the idea that in the social world you can get pass on and that can incrementally increase your reach and effect. This whole principal of bought, earned and owned media is going to be a really powerful model for the future, and social is one big chunk of it. But it's how do you ensure that your message is amplified through pass on and how do you get that to happen? And the digital and social-media world is definitely the place to do that with scale.

Ad Age: How important do you still consider mass media and do you think you can effectively buy around it or reduce what you use since social media's rise?

Martin Cass: The demise of network TV is greatly overrated. There will continue to be a very significant place for traditional media channels. Senior media owners talk much more about their brand and what it stands for than just their channels. Increasingly their brand encapsulates content, and people are becoming more concerned about the content and less about the distribution mechanism.

They are looking for ways to monetize and exploit different routes to market. The core cash machine of network TV, magazines -- those brands aren't going anywhere. You'll see a right-sizing like in the newspaper industry, but really good distributed content is what it's all about. Whether it's Vanity Fair or "American Idol" doesn't matter. It's all about how good the content is.

Ad Age: Which media sellers are being innovative?

Martin Cass: I had a really interesting meeting with Time Inc., and I thought their view on how their brands and the content within those brands get distributed in the future was pretty innovative and forward-thinking.

Having met with the people responsible for the monetizing of Facebook, I have to say they are pretty damn smart too. They have some very interesting thoughts on where that business is going to go and how it's going to get there and what's happening. They are creating their own ecosystem for getting their own product to market rather than "build and they will come."

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