"People want to put us in a box. Advertising agency or media shop? But we're neither," said George Michaelides, managing partner of the 18-person, London-based outfit that bills approximately $150 million. Mr. Michaelides sat in a restaurant in New York's SoHo district, sipping coffee -- not tea. He was accompanied by Rupert Newton, partner and media planner and the man who will run their New York office, which will open for business at the end of October.
The pair were in town last week sealing a real estate deal for an office at the edge of Chinatown, which they will share with another Euro import, Paul Meijer, the Dutch commercial director and former creative director at Young & Rubicam, Amsterdam."Media is a contaminated word," Mr. Michaelides said, explaining his company's unique approach to advertising.
"It's associated with numbers, and buying television spots. For us, media is all about culture," Mr. Newton added. "Anything that communicates is media. The way a person looks. Someone's haircut. That's media."
Michaelides & Bednash is the leader of a movement in the media business that is, like the footballer's buzz cut, all the rage in London at the moment, but virtually unheard of here. They are the pioneers of the media strategy specialist phenomenon. In plain English, they are a standalone shop that specializes in media planning only, not buying. In the U.S. there are media shops that either do both buying and planning, or they do just buying. There are no independent companies here that hone in solely on strategy.
FOUR OTHER SHOPS
In London, there are four other shops that have popped up in the wake of Michaelides' appearance on the scene in 1994. There is Unity, which calls itself a strategic communications agency, and is run by Andy Tilley, formerly of Zenith Media, and Derek Morris, previously with BMP Optimum. There is Naked Communications, which describes itself as an independent creative communications agency and was recently founded by Jon Wilkins, John Harlow and Will Collin, former top executives at Omnicom Group's media agency New PHD. The most recent addition is the Manwaring Partnership, founded by Tony Manwaring, the former chairman of Initiative Media in London, which bills itself as a creative communications solutions agency. And there is Bridgeworks, a shop run by Simon King and Simon Calvert, formerly director of planning and director of communications strategy respectively at Carat. The shop was recently bought by ad agency HHCL & Partners, but exists nonetheless as an autonomous strategic media operation. All of these shops work directly with clients, with agencies, and with media buying companies.
A NEW MODEL
"Ninety percent of the agencies around at the moment have built their factories on an old model," Bridgeworks' Mr. King said. "In a factory you've got a process and whatever job comes up you make your process fit that job, don't you? But what is actually needed these days is a new approach. Each job is different. Each client has different jobs at different times of the year. So the whole thing is a lot more fast-paced these days. And I think what we have created are companies that are able to work with that."
These shops are different not only because they specialize in planning, but because they turn the tables on the traditional marketing process. By merging media planning with strategic planning, they work both at the front end, before the creative work, and at the back end, after the creative work, to develop a brand's message in the marketplace.
They are media creatives, guided by marketing's version of the Heisenberg Principle, which states the very act of observation changes the physics of an object. In other words, Michaelides executives believe a brand's core meaning is defined by the vehicle that delivers its message. In Mr. Michaelides' words: "Brands are created by advertising." He believes advertising itself is the brand, rather than just a way to carry the brand's message.
"It's all about the famous Marshall McLuhan message, the medium is the message," said Stacey Lesser, director of brand planning at Kirshenbaum & Bond, New York. "It's the whole concept of you are what you eat. The environment that you show up in says as much about you as anything else. You are going to form a certain opinion of me, based on where you see me. If I'm at a party, you'll think one thing about me. And if you see me at the opera, you'll think something else. It's the same thing for a brand."
FINDING THE RIGHT CHANNELS
And so, Mr. Michaelides and his colleagues work closely with clients, including advertising agencies themselves, to come up with both a brand strategy and a media buying plan. "Everybody concentrates on creative content as the important thing to put in front of consumers," Mr. King said, "but in fact, creative media channels and getting the right channels is as important if not more important than the content."
Media and strategy convergence is a hot topic in the U.S. media and planning business today. Graham Bednash, also a managing partner of Michaelides & Bednash, spoke to a very receptive audience at the American Association of Advertising Agencies/Account Planning Group's 2000 Account Planning Conference in Miami earlier this year about mixing strategy and media.
And Barry Lowenthal, director of media at Internet media shop HookMedia, Boston, along with Kirshenbaum's Ms. Lesser, conducted a popular convergence session at the conference in which they discussed their own experiences working together on print campaigns for Dom Perignon and Donaldson Lufkin & Jenrette.
"I attended an Account Planning Group session five years ago led by Graham Bednash, and that's what first got me thinking about media and how we should be using it at the agency," said Ms. Lesser. "K&B has always had a creative approach to media. The media department always featured itself as the other creative department. They were always looking for different ways to use media, including the famous Snapple campaign, in which we created a new media: stickering fruit."
She added, "What we do do here is look at the convergence of consumer, brand and media values, with a strong brand planning twist . . . There's too much media clutter these days, so you have to make the absolutely right choice that will capture the consumer. Context is so important."
Mr. Michaelides, however, is quick to differentiate his operation from the rest of the convergence gang. "Our starting point is culture and our philosophy is that anything communicates," Mr. Newton said.
"We come at it from the social context," added Mr. Michaelides.
The U.K. shop doesn't pretend to come at marketing problems from a media perspective, nor strictly from a brand angle. They come completely from the outside. They recognize that first and foremost, brands are part of the social fabric -- which they exploit.
As an example, Mr. Michaelides points to his company's work for the U.K.'s Channel 4, promoting its broadcast of "Sex & the City."
"We didn't really do ads. We put these posters right outside the newspaper [offices] to get them to write about it," Mr. Newton said. The posters simply contained provocative lines taken from the show such as "I can sit around and mope, or I can have sex." And "If you think all men are the same, you are not dating enough." They also created a provocative centerfold promoting HBO's "Sex & the City" for the London daily papers that was nearly indistinguishable from their usual editorial.
For the premiere of "Big Brother" on Channel 4 in the U.K., Michaelides raised jumbo screens on Leicester Square that showed the program to the crowds. "The idea was to focus on the voyeurism," Mr. Newton said. "We made the show participatory," Mr. Michaelides explained. "Instead of offering the usual grubby brown envelope stuff."
They also drove the voyeurism theme by posting arrows pointing to London's closed circuit TV cameras around the city. The arrows read: "You are being watched." They even created a huge billboard-size arrow that brashly pointed to the MI6 offices, the U.K. equivalent of the CIA.
Messrs. Michaelides and Bednash and their team are marketing's vanguard metaphysicians, in effect. They even have a semiotician on the payroll, Media Strategist Al Deakin. Mr. Michaelides, however, bristles at the idea of being taken for a high-minded theoretician. "Actually, we are crossing over into entertainment," he said. "We have a holistic model. Starting at brand planning, we've stepped over the boundary of media planners and into content."
In 1997 they were designated Media Agency of the Year by Haymarket's Campaign and Media Week for landing several blue chip clients, including the BBC, and for raising their billings almost 75%. Media Week described Michaelides as a "one office agency with a staff of 18 and no buying business, but they are sending out very clear signals about how the media business is changing, both for agencies and for media owners." The shop currently has a total of 12 clients, including the Motley Fool, First Direct Banking, The Guardian newspaper, the Value Direct e-commerce site and BBC Worldwide. Michaelides is in negotiations with a possible first U.S. client, but has not signed one as yet.
"They are taking a very innovative and unusual approach to brand understanding and brand planning," said Paul Woolmington, vice chairman of the Media Edge, New York. "They defy categorization at this stage. They are not really a media company. They are not really an account planning consultancy. They are sort of an amalgam of both. I think what they would argue is that they are trying to use this unusual targeting to get at a media neutrality. I wish there was a better word for it, but it's this view of the brand through a special perspective which enables them to be free of conventions. They don't need to look at television or print, or radio as being the answer for everything."
The Media Edge launched their own in-house answer to Michaelides six months ago. It's a media strategy specialist division called TME 360, led by Martin Thomas, director, out of London. Although the unit has not opened in the States officially, one of its first campaigns, for Sony Electronics Corp.'s Sony Walkman headphones, already broke here.
TME 360's Kim Canfield, VP-planning director in New York, conducted a guerrilla communications campaign targeting inner city consumers. The agency moved into neighborhoods in vans so that kids could sample music through headphones. They stopped at basketball courts in Atlanta, Detroit, Los Angeles and New York, and also targeted dance clubs, all based on information gleaned from the kids.
"So it became very organic," Mr. Woolmington said. The group hired a music company to produce a CD with up and coming rap acts, giving away about 35,000 discs, according to Mr. Woolmington. The second phase of the campaign, during the back-to-school period, plastered the Sony brand on book covers, in postcards on college campuses and on dorm room posters. During this street-style assault, Sony's share of the headphone market increased 50%, claimed Mr. Woolmington. The book cover generated 77% recall of the brand among students, he said. "And all of it cost under $1 million."
The U.S., meanwhile, has just recently jumped on the last U.K. export: the media consolidation trend, with billions of dollars in consolidated account planning and buying assignments. But according to many Europeans this is already a dying trend. "Unbundling is already passe in Europe," said Nick McClean, media director at TBWA/Chiat/Day, New York, who formerly hailed from New PHD but currently believes that integration of media back into the creative agency is the coming new wave.
"There is a global trend towards the reintegration of media and communications into the heart of the advertising agency," he said. "That's not to say that buying of media will be brought back, it's just that people are realizing that creative directors, account planners, all of the disciplines of an agency need media and communications expertise. America was once behind the European trend of separating media out, but because of this new trend they might actually find themselves ahead of the game."
In the meantime, will the little upstarts at Michaelides upset the cart in the U.S. advertising market, by pushing a "small is beautiful" agenda?
"The market is so huge here, M&B is not looking to be competitive with the main media companies," Mr. Woolmington said. "So in order for them to be successful here, all they need is one or two substantive pieces of business. All they need is a very small slice, and they've got a business proposition."
"We aren't coming here to tell people how things should be done," said Mr. Newton. "We're just coming here to find people to work with, and have some fun."
"We could do with all of the clever media people in Manhattan," said TBWA's Mr. McClean. "The more the merrier. It all shakes up the industry. And that's not a bad thing."