Media Agency of the Year

P&G win icing on the cake for Carat

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Last fall, an event at Aegis Group's company retreat moved Carat Americas CEO David Verklin to tears. His colleague, Bruce Dennler, exec VP-planning, presented him with a memento: a framed menu from a 1998 airplane flight. Scribbled on the menu in Mr. Verklin's handwriting was a diagram of a media services company. The sketch "was the starting point of a vision," says Mr. Dennler, one that he'd often discussed with Mr. Verklin, just after the media executive signed up to build Carat's North American unit.

That vision is a reality today. Carat's recent gathering seemed an appropriate time and place to reminisce about those early days, says Mr. Dennler. The group was riding high; just a couple of months earlier, the world's biggest advertiser, Procter & Gamble Co., awarded communication planning duties on six of its 16 billion-dollar brands to Carat in North America. As important as the additional revenue and business is P&G's validation of that vision. It is also proof that Carat here is successfully transporting its communications planning specialty from Europe, where it got its start.

"Communications planning requires a vision and capabilities," says Mr. Verklin. "Slowly, surely, inexorably and strategically, we've assembled those capabilities."

Rolled up within Carat today are 16 companies, ranging from several interactive agencies to marketing analytics and behavioral research consultancies, a speakers bureau and an event and sponsorship arm, with research and analytics at its core. The most recent purchases include search engine marketing firm iProspect, and Velocity Sports & Entertainment, an independent sports marketing, sponsorship and event company. All operate under the Carat roof, which Mr. Verklin maintains, makes delivering an integrated service easier for Carat than its competitors.

When Mr. Verklin took the reins of Carat's stateside operations in New York, after nine years at Hal Riney & Partners, San Francisco, the company's only assets were Media Buying Service in New York, ICG in Los Angeles and about $600 million in client media dollars. Carat today has billings of $5.33 billion, up 345% from when Mr. Verklin started in 1998. Staff since then has also grown 151% to 1,113 employees.

Many of the company's top executives, including Mr. Dennler, have been with Mr. Verklin and Carat since the beginning, and Carat earns kudos within the industry as a great place to work.


In some ways, Mr. Verklin was an unlikely candidate to take the company into uncharted territory. The big question was a lack of broad, general management experience on his resume. But, recalls headhunter Pat Mastandrea, who recruited Mr. Verklin to the post, "he is so passionate about media. He has such a vision for where it can go and what it can do."

Crispin Davis, now CEO of Reed Elsevier Group and who headed Aegis from 1994 to 1999, courted Mr. Verklin for the Carat job for more than a year. "I thought he could bring the drive and energy we wanted to the Carat business," he says. "He's charismatic. He knew the media world well. I think he is exceptional with clients."

Communications planning, a media-planning-like discipline that strives to understand where and when consumers are most receptive to a message, has been under development at Carat for last two years.

"It's about really trying to understand our consumers and how we reach them," says Donna Campanella, media director-team leader, Pfizer, which has been working with Carat in communications planning for the past year. With the addition of P&G, Carat's talent base is expanding dramatically. Martin Cass, who led Carat's communications planning group in the U.K. for seven years, moved to New York this fall to run the P&G account; Carat also in October hired Doug Ray, formerly director-integrated services at independent DiMassimo Brand Advertising, as communications planning director. To handle the new P&G business, the agency hired 25 people and shifted another 15 internally.

The developing expertise is catching interest from other clients. Alberto-Culver Co., on its roster since the late 1990s, has long relied on Carat for basic media planning and buying.

Alberto, says Dan Stone, VP-corporate communications at the package-good company, is "a pretty basic advertiser," although it's exploring new areas including promotions and entertainment. He asked to meet with Carat about communications planning, too. "I'm curious about it because of P&G, the successes Carat has had and because it is a new service," he says.


Though 2004 was a great year for Carat, the coming 12 months will present stiff challenges. Charlie Rutman, president of Carat USA and a longtime Verklin lieutenant who started at Carat even before his boss, in February resigned to become CEO of Havas' MPG North America. In the same week, Mr. Verklin's boss, Doug Flynn, CEO of Aegis, resigned for the top post at cleaning company Rentokil Initial.

The departures lit a fire under speculation that Aegis again might be in play for a takeover. Aegis denies the rumors. And only time will tell how the departure of Mr. Rutman, a strong negotiator and face for the agency, will affect it during the upcoming TV upfront and future pitches.

But characteristically upbeat, Mr. Verklin declares: "I feel like I've been running a race to get Carat in shape. The next three years will be the most exciting yet."

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