|'We need to improve our position, strengthen our capabilities and bring in a broader range of talent,' said Universal McCann CEO Nick Brien.
Jonah Bloom: If 60% or 70% of media business is independent unbundled media business, do you really think Universal McCann, known for being very closely tied to its ad agency, can compete for that business?
Nick Brien: For the right business we're always going to compete, the question is whether we're going to win. We need to improve our position, strengthen our capabilities and bring in a broader range of talent. But the big issue we face is an industry issue: How swiftly will the media business become a communications business? We have to become communications architects. In that respect we have a competitive advantage in our partnership with the [McCann-Erickson] Worldgroup.
Bloom: Just to make this more tangible, are you saying that even in an independent pitch you'd pull in Worldgroup expertise?
Brien: What we'd use is our experience and capabilities in conjunction with Worldgroup talent. Why wouldn't we? We have a partnership, a very real one, which gives us a competitive advantage. Many of our competitors work in a conventional sense where their focus is on traditional analog media and some aspects of buying and planning interactive media, but that world of media is much more limited than the world of communications. Clients need communications options not just media options. And if we're going to talk about the world of communications, all bets are off in terms of who does it and how it gets done, and how we get compensated for it.
Bloom: So, is your view that rather than selling media expertise, you're going to sell communications expertise? And does that mean you're going to put media at the center of the entire marketing strategy? Because, I mean, when you worked at Arc you'd have told me that you needed to put promotions and the databases at the center of things -- and everyone always seems to think their discipline should lead or orchestrate all the other marketing agencies.
Brien: No, I wouldn't have said that. I'd just have said it should be higher in the strategic decision making process. But to answer your bigger question, yes, we need to be selling communications expertise not just media expertise. Why? Because every day that goes by the potency of the traditional marketing and media model declines, and the power of, let's say, fully integrated communications grows and that's driven by broadband and by technology.
Bloom: So you can't just talk in a media context anymore?
Brien: If I just talk about it in a media context my senior clients are going to say: "Why if all of the change in the world is media driven and consumers are embracing different ways of living and shopping and communicating, why aren't you, my media company, stepping up to the plate to give me the guidance as to what to do and what not to do?" That's my strategic opportunity. And all I'm saying about our Worldgroup assets is that I have a distinct palette of capabilities I've got to use to inform my decision making. The marketer may have their own direct marketing or branded entertainment agency, but I should still use Worldgroup's direct or branded content talents to inform our advice and what we do.
Bloom: So you're saying that despite the fact that a client is sitting in front of their media agency, they might hear that they should do direct marketing or PR, or in-store activity, not media. It's more of a Naked strategy that way. It's not necessarily recommending a traditional media route?
Brian: That's exactly right. Because I'm an integrationist at heart and having run ad agencies and marketing services companies I've realized that when you sit down with a senior client they want someone to put it all together and they want to buy solutions. And a solution to me is an idea and the activities -- what is most exciting for big sophisticated marketers is the activities themselves.
So am I going to reinvent what U-M is? And the offerings we have and what we stand for? Yes. You'll see us launch a global engagement planning discipline, and a global accountability discipline. We're not going to compete as a traditional media agency anymore. Those are the terms on which I took this opportunity.
It's interesting. There are a lot of senior media people who are much more excited about being in an integrated model because they want a closer accessibility to the creative process, they want to take a broader, strategic planning role, they want to work in collaboration.
Bloom: But aren't you ignoring the fact, as I said before, that everyone wants to lead? And, to be cynical, this looks a lot like a power grab. I mean you'd essentially, in this model, determine where all marketing budget is spent. That's a big change, I mean a lot of money has flowed through the media agencies, but usually only -- at least this is how it was five years ago -- once a creative agency has persuaded a marketer that it needs to spend $120 million. In your model you'd have to determine where budgets are spent, before any other agency has sat there and convinced the marketer of anything. So you become the arbiters of spending -- and doesn't that make you more powerful than John Dooner [CEO of McCann-Erickson]?
Brien: [laughing] No, because I'm always going to work very closely with John Dooner. Individual clients will look at it in different ways. But certainly the need and the opportunity is there for the media communications capability to be central to the process -- driving it, but driving an integrated bus. That's the difference. A lot of the power struggle that's been going on about planning, strategy, that's what we're talking about here, is budget allocation and marketing communications architecture. Who does it, who owns it? And ultimately that depends on the skill sets, because if we all spend our time fighting with each other, Accenture and McKinsey and a whole load of others are going to step in, and we'll just be in an implementation role.
Bloom: One thing that is a bit confusing is the semantics here. Some people are calling it communications planning, some of them are calling it contact management, and now it sounds as if you're calling it engagement planning. Why are you calling it engagement planning?
Brien: Because I want to shift the mentality of our organization from exposure, putting it out there, to engagement. I want to think about the outcomes and not just the outputs, cost per thousand, reach, frequency, that's an exposure. We're thinking about reception, because you want to know how people are involved, what they're experiencing. I want our people to think in a more emotional way, not just in transactions. A lot of the media world is very much about the science ... we won't drive brand experience unless we have engagement.
Bloom: How's that different from communications planning?
Brien: It is communications planning, but I'd rather talk about the benefit and not the discipline. Ultimately I'm just trying to find a more exciting way to talk about it. It's an internal thing to call it engagement to get people to think differently about it. If I talk about communications it's "Oh yeah, I've heard that." No, no, no. When I talk about engagement we're talking content and contact. Because in the digital world -- especially in the digital world -- the whole impact of content and contact they blur together, they merge together and I want our organization to think about that.
Bloom: OK, but how do you change an organization? Because there's a large part of the media world out there that thinks the chief job of a media agency is to buy them TV at a good rate. Isn't it going to be difficult reconcile the "We want you to plan our entire engagement strategy" offering, with the "Just buy us some cheap TV" offering?
Brien: No, because that's part of our organizational design. Part of the IPG Media offering, and we have Magna in the fold. Buying and implementation is a huge part of our offering ...
Bloom: And that'll remain a part of the U-M offering, or it'll just reside within IPG Media?
Brien: It'll remain a part of the U-M offering. Who does it, how it's managed, how it's coordinated, how we achieve the necessary scale and efficiency commitments to our clients, we're going to be looking at that on an ongoing basis.
Bloom: So that partly comes down to IPG Media and Magna and so on?
Brien: Yes, in conjunction with our U-M specialists. But no longer will we see a fragmentation in the way IPG manages its media capabilities.
Bloom: What do you mean by that?
Brien: Well, you've said it yourself, Initiative and U-M have never sought to collaborate in any way, and Magna's been working with them in a very distinct model. All we're saying is, as we consider the necessary evolution to do the "as well as," we have to then think are the other ways to structure ourselves to deliver the necessary capabilities for, what is still a huge part of what we do, the implementation of traditional media. I'm not walking away from that, that's a huge part of my revenue.
On the one hand there's going to be increasing communication AORs, and we find ourselves in the ring with a Naked. And then there are going to be more traditional media AORs, driven by the procurement director trying to get the third round of savings in five years. In my opinion that gets you into the realm of diminishing returns, but it's a fact of life and it's got to be done very, very well.
Bloom: But aren't people confused about how you go to market? Is it Magna or Magna plus U-M, or U-M, plus Magna, plus Initiative, or some different combination of the above?
Brien: You're right a new level of clarity is required. But my clients, who I talk to in the U.S., are sharing with me a high level of satisfaction for the buying performance we deliver through a combination of Magna and U-M. But there are improvement opportunities there, without doubt. ...
We can debate whether U-M has been an underperforming organization, and I think it's a combination of things: Is it a lack of talent? Is it about organizational design, a lack of clear independence from the McCann Worldgroup? But we are going to be an independent media business that's going to focus on media and communications and we're going to have our P&L [profit and loss] managed by IPG media, and we're going continue to operate collaboratively, very collaboratively, with the Worldgroup.
Bloom: If your P&L is operated by IPG Media does that mean you get bonused also according to the performance of Initiative too?
Brien: I don't know that ... we haven't resolved that ...
Bloom: You want to sort that out mate. What if Initiative has a terrible year?
Brien: We'll work it out. IPG Media is going to operate differently in '06. I haven't spent much time looking at Initiative's issues, I have my hands full at U-M. And we're not saying it's all fixed now, I signed up for opportunity and potential. We have great, great clients who really want breakthrough work -- Intel, Microsoft, Sony, Verizon, J&J, Wendy's -- they don't want a pedestrian offering. One theme comes through when you meet them: Engagement is down and accountability is weak, and how are you going to help improve that? That's my challenge -- and we won't play second fiddle in that debate. Kevin Roberts at Publicis Groupe used to get very obsessed about who is driving the bus, who owns planning? But I see it in a very different way -- it's about connecting and collaborating. If we don't do that, if we go about swinging our handbags, other people, like Naked, will come in and play pirates and take some of the booty.
Bloom: Naked is clearly going to take some of the booty.
Brien: They're just not going to take it from me.
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