NEW YORK (AdAge.com) -- Late last year, Initiative found itself in a position that had become all too familiar. The Interpublic Group of Cos.-owned media agency, just coming out of a few tough years of client losses and a management overhaul, had the opportunity to pluck a massive piece of business, MillerCoors, from Starcom, an elite shop and perennial media agency of the year.
Going into that pitch, Initiative had already won NFL buying assignments for both the Miller and Coors brands, but there was one thing standing between the agency and a big enchilada of an account that would bring in $400 million in billings: Jackie Woodward, who became the top marketer at the combined operation after holding the same spot pre-merger at Miller. A Starcom loyalist, Ms. Woodward would surely prove difficult to sway. But Initiative, together with sibling agency DraftFCB, came up with an unusual concept, a dedicated unit known as MC Media that also includes WPP Group's Kinetic on out-of-home duties.
That Initiative would be able to dislodge a founding Starcom account was just about unthinkable at the time. But the coup was another piece of evidence that Initiative's turnaround has been a success. Last year was not only a monumental one in terms of new-business wins -- nearly $1.5 billion in billings -- but also a time when Initiative engineered some highly innovative print and digital campaigns and introduced a variety of new client offerings. Revenue increased 22% to more than $340 million, due in part to wins such as the $735 million Hyundai/Kia account, $150 million Dr Pepper Snapple Group and $400 million MillerCoors accounts.
Not bad for a shop that was just a few years ago, in the words of one Interpublic executive, "hurting." Back in 2004 and 2005, Initiative was at a low point. It seemed to lack both a clear positioning in the market and a leadership team with the vision to help the agency survive in a rapidly digitizing and viciously competitive media landscape. Those problems led to some client defections and new-business stagnation -- not to mention repeated rumor-mongering that Initiative would be combined with its even-worse-off sibling, Universal McCann.
Things began to change in 2006, when Interpublic hired Richard Beaven from Starcom MediaVest Group to run Initiative's U.S. operations. A smart thinker on both brands and media with extensive package-goods experience, he quickly and rather quietly began to turn things around. Mr. Beaven said the first thing he wanted to do upon taking over was to instill a heightened sense of leadership and a belief among agency personnel that "success could be achieved and that [Initiative] could be the center of the map in terms of the category we are in."
The wins began to come, and Initiative gradually began to shore up its reputation as a bastion of smart marketing thinking. Last year, Mr. Beaven was bumped up to handle the global role succeeding Alec Gerster, and Tim Spengler was named U.S. president.
In his first few months as global head, Mr. Beaven said he sat down with more than 50 people across the agency's U.S. offices and laid "very clear" expectations while listening to what his employees believed to be the agency's strengths and weaknesses. Then, along with other top agency executives, he established a sense of accountability, a core expectation of "consistent delivery" and goals for the agency, which included becoming highly competitive; delivering on "the promise of our name"; and starting to develop a more challenging mind-set.
Like many comeback stories, Initiative's has many components and drivers. For some, such as Nick Brien, CEO of Mediabrands, the Interpublic unit that houses Initiative and Universal McCann, the most significant element of this story starts at the top.
"It's the people and great leadership," Mr. Brien said. "They have inspired, motivated and completely rebuilt the sense of confidence of that talent base to the sense that winning became a cultural reality."
Another Interpublic executive was a bit more blunt about the new leadership team's strengths.
"Richard has a point of view about what the agency should be, which is about a higher order of deliverable," said the executive. "Tim and Richard don't sit up on high pontificating about stuff. They actually lead by example. There has been a very dramatic change, because it was a passive place, and now it's a place where things get laid out and you are held accountable for getting them done."
|DR PEPPER SNAPPLE GROUP|
|Exec VP-managing director (Hyundai and Kia)|
|Exec VP-national broadcast|
|Exec VP-managing director, innovations|
|Initiative supported the successful launch of the Genesis in a down auto market with online and offline efforts.|
|Initiative created the high-profile magazine cover work for the season-three premier of Showtime's "Dexter."|
Expanding Bayer role
Bayer, which has partnered with Initiative for just about a decade, has significantly increased the agency's role over the years. Initiative began handling Bayer's media buying in 2000, when it acquired Botway Group, the company's longtime agency. Initiative was awarded the planning side of the business in 2007 after a review, and as recently as last month Bayer awarded all of its digital business to Initiative, which beat out WPP's Beyond Interactive, the incumbent, in a competitive pitch.
Mollie Lawrence, director of advertising services at Bayer, said the troubled times Initiative endured never affected the work it did for her company. "It's been a consistent philosophy, and even as people have come and gone, the baton has always been passed smoothly," she said. "They have been hand-in-hand with us on our brand management as it relates to every aspect of our business. And as we expand our use of different media platforms, they will be our partners there as well."
Based on the results of the work it's already done for Hyundai/Kia, which Initiative won in January 2008, the agency is laying the groundwork for a Bayer-like long-term relationship. It pulled off a successful launch for the Hyundai Genesis in a battered auto market, using a major TV buy supported by a widget that offered original content featuring the car. Genesis was eventually named North American car of the year. The campaign continued during the Super Bowl, with two pre-kickoff TV spots announcing the honor and an integrated multichannel campaign that included user-generated content, social networking and a massive search campaign that resulted in a 43% improvement in brand favorability, a massive increase in Hyundai search queries and a 200% increase in website traffic.
Jim Sanfilippo, exec VP-chief operating officer, World Marketing Group, the U.S. marketing division of Hyundai/Kia, said Initiative has an excellent grasp on the auto market. "They are current on a daily basis, and we hear from them every day, and that's pretty unusual in this business," Mr. Sanfilippo said. "And they have a very strong digital practice."
That's another big change for Initiative. The agency's digital practice was barely on the map when Michael Hayes, exec VP-managing director of digital, arrived four years ago. "Now we're one of the largest and fastest-growing digital shops in the U.S.," he said.
In the MillerCoors pitch, Ms. Woodward, VP-marketing service at MillerCoors, said Initiative showed a great understanding of the post-merger MillerCoors and what the company needed.
"We were very impressed in the pitch with how they listened to what the new MillerCoors needed from a business perspective," she said. "We are a 30-share company, and we think and act differently, and they got that immediately."
Mr. Spengler said one of the keys behind the agency's innovative thinking and approach was the creation of its 18-member operations committee at the beginning of 2008.
Originally the team consisted of a much smaller group of people, but, Mr. Spengler said, he felt it needed a more diverse set of voices offering opinions on the direction the agency should be taking.
"As we felt we were headed in the right direction, I said I want a broader set of voices and all the people with the responsibility at the table to help us carry it out," Mr. Spengler said.
The committee includes department heads from strategy, digital, print, human resources, finance and public relations.
It wasn't all smooth sailing for Initiative. It lost the $50 million Levi's/Dockers planning and buying accounts, and its 15-year relationship with Home Depot is on the line, as the retailer has put its $600 million media business into review.
The agency also lost one of the key players many believe helped turn things when Alan Cohen, Initiative's former western-region president, left to become the U.S. CEO of OMD.
Mr. Cohen's departure hurt Initiative even more a few months later when client CBS announced it was moving its $135 million media-buying business, which Mr. Cohen oversaw at Initiative, to OMD so he could continue running it.
And at his new agency, Mr. Cohen made his presence felt immediately: He ran the pitch that wrested the Levi's business away from Initiative.