New business

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Prospects for new-business wins, one of Madison Ave.'s most widely enjoyed spectator sports, are only slightly better in 2003 than last year, and the stakes remain high. The pressure's on at agencies-particularly those owned by publicly traded parents-to perform, and new-business wins are regarded as a sign of health, particularly by Wall Street.

The deals struck and tactics taken to reel in new accounts will vary in approach. Management at Interpublic Group of Cos. is honing the skills of new business staffers at agencies (think Lowe and Foote, Cone & Belding Worldwide in the U.S. ) that haven't performed. Speaking to investors in early December, Interpublic Chairman-CEO John Dooner said that developing new business "as a core competence" is a priority. Look for management and operational overhauls in 2003. Even at Interpublic's McCann-Erickson Worldwide, a high-performer in winning clients, new accounts will be key, as the Coca-Cola Co. account may finally slip away this year.

likely reviews

Some other accounts that new-business sharks are circling in anticipation of a review include SAB Miller, Home Depot, Cingular, Burger King Corp. and Pfizer. Heineken is also rumored to be a candidate for review, but the client can't follow its longtime creative guru Lee Garfinkel to Omnicom Group's DDB Worldwide because that shop handles rival Anheuser-Busch.

At Publicis Groupe's Leo Burnett USA, President Bob Brennan and Chairman-Chief Creative Officer Cheryl Berman are handling new business at the highest level. "We ... don't delegate much," said Ms. Berman.

It's unclear whether their desire to maintain control is related to new parent Publicis Groupe and its plans for approaching new business. As head of the newest sizable holding company, Publicis Chairman-CEO Maurice Levy has an opportunity to introduce untried tactics in how his agencies come to market and approach clients.

client outsourcing

Expect innovation from some holding companies and marketers in efforts to continue advertising while simultaneously lowering costs. Experimentation may take the form of marketers outsourcing activities and functions previously handled in-house. WPP Group Chief Executive Martin Sorrell, for instance, has said there are currently "three situations in which [client] companies are negotiating the outsourcing of their marketing functions" to WPP Group-owned agencies.

Novelty in compensation programs, rather than in campaign ideas, may be a driving force for account switches. Merrill Lynch & Co. recently surveyed 17 global marketers and found that 88% said they have "had conversations with their agencies regarding fee arrangements... and 60% said that agencies are willing to accept lower prices." One respondent said that "agencies were willing to accept lower compensation for an increased ability to pursue competitive clients."

A trend that surfaced in 2002 that may not last long into 2003 is holding companies selecting teams at a marketer's request to compete for an account, as Bank of America, Aventis and others have done. Said consultant Dan Pearlman of Bob Wolf Partners/TPG, Los Angeles, "clients don't have the kind of control they think they do when they approach a holding company" and ask them to select the team. "How much faith does the client want to put into an entity that has multiple interests to serve as well as some built-in bias?"

contributing: claire atkinson

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