McCann Erickson Worldwide

Published on .

Created by the merger of Erickson Co. and H.K. McCann Co., 1930; in major agency switch, won domestic business of Coca-Cola from D'Arcy Advertising, 1955; restructured into four divisions reporting to a single company, Interpublic Inc. (later renamed Interpublic Group of Cos.), 1960; established McCann-Erickson WorldGroup as an umbrella management company overseeing McCann-Erickson Worldwide Advertising, 1997.

On Oct. 2, 1930, H.K. McCann Co. and Erickson Co. merged to form McCann-Erickson, creating what at the time was the ad industry's largest shop, with combined billings of $15 million. H.K. McCann became president of the New York-based agency; Alfred W. Erickson, chairman.

Despite its already large size, the agency spent that decade in a growth phase. McCann's most significant account win in the 1930s was the Ford dealer ad business. Within a six-month period, the agency added 27 of Ford's 32 branch territories across the U.S., which involved setting up a network of interlinked offices. (The Ford account grew to $2.7 million in billings by 1939 or 12% of the agency's U.S. total of $21.7 million.)

Another factor in the agency's growth in the 1930s was the development of radio as a major ad medium. Dorothy Barstow emerged as one of McCann's early radio producers, helping to introduce "Real Folks," the 1929 radio show for Chesebrough's Vaseline hair tonic, as well as "Death Valley Days," sponsored by Pacific Coast Borax Co.'s 20 Mule Team Borax.

Outdoor and films

Radio was only one ad medium expanding in the 1930s. On-screen advertising in movies began in that decade, with McCann-Erickson's animated campaign "Quick, Henry, the Flit" for Stanco Inc.'s Flit insecticide, another early advertiser. Outdoor advertising—in particular billboards for Standard Oil—also earned McCann renown. In mid-1932, McCann-Erickson established a separate outdoor advertising department. The following year, it set up a sales promotion unit.

McCann also expanded outside the U.S., following client Standard Oil into South America to open offices in Argentina and Brazil, a move that helped the agency develop a vast international network. McCann also opened agencies in Europe to service Standard Oil, and those offices went on to win new business.

By 1936, the year Mr. Erickson died, the "Standard Directory of Advertising Agencies" listed 17 McCann offices in the U.S., Canada, England, France, Germany, Argentina and Brazil. Clients that year included Bon Ami Co., Borg-Warner Corp., Chesebrough Manufacturing Co., Ford Motor Co., Fanny Farmer Candy Shops, Mack Trucks and National Biscuit Co.

By 1937, the agency had 827 employees. Two years later, despite losses in its overseas agencies, it posted $483,000 in operating profits.

In 1939, Marion J. Harper Jr. was transferred from McCann's mailroom to the research department, where he made his reputation developing a research study that became a "guideline on how ads could attract more attention and readership." He went on to create the idea of agency holding companies.

Between 1940 and 1944, McCann opened offices in Atlanta, Dallas, Minneapolis and Boston. While World War II stalled growth in Europe, the agency's Latin American network continued to move forward. McCann opened agencies in seven Latin American countries between 1942 and 1946. By 1949, the Latin American region's nine agencies were billing $5.5 million, $2 million more than McCann's European operations. Total worldwide billings that year were $60 million, 17% of which came from outside the U.S.

Harper's influence

The research study Mr. Harper had undertaken led to "The McCann-Erickson Continuing Study of Reader Interest in Magazine Advertising." This study was overwhelmingly accepted by McCann offices both in the U.S. and overseas, and by 1942, Mr. Harper was named head of copy research. In 1946, he was named VP-research director of McCann.

In 1948, Mr. Harper took over the daily running of McCann as president (at age 32), and Mr. McCann moved to chairman; at the time, the agency had billings of $54 million and ranked No. 5 among all agencies.

In 1954, McCann decided to buy Marschalk & Pratt as part of a consolidation strategy. But instead of folding the Cleveland agency into McCann, Mr. Harper felt it would be wise to keep Marschalk a separate agency, with its own name and client list. He believed Marschalk could handle small clients on a more profitable basis than the larger McCann and possibly—and most controversially—could even handle some competitive accounts.

McCann's emphasis on coordination of global marketing strategies reaped tremendous rewards for the agency in the 1950s, when it parlayed an overseas relationship with the Coca-Cola Co. into a domestic one. In October 1955, McCann was appointed agency of record for Coca-Cola's $15 million account, which had been with D'Arcy Advertising Co. for almost 50 years. As the longtime incumbent, D'Arcy had been thought to be too well entrenched to be challenged.

Coca-Cola was interested in McCann research showing that consumers wanted "refreshment" and the suggestion that the soft-drink marketer think of itself as being in the refreshment, not merely the soft-drink, business. The agency also agreed to integrate Coca-Cola's international ad efforts with its domestic campaigns. An early TV spot featured the singing McGuire Sisters pausing to enjoy a Coke. The theme was "Be really refreshed, pause for Coca-Cola."

By 1956, McCann had 24 offices in 15 countries and employed 1,300 people outside the U.S. McCann quickly adopted TV, and by 1957, 85% of McCann's clients' money in broadcast was placed in TV. Also by 1956, nine of the agency's top 20 international clients used McCann both in the U.S. and overseas.

In February 1958, Mr. Harper again stunned the ad industry when McCann resigned the $26 million Chrysler automotive account to take on the $24 million Buick account from General Motors Corp.

Birth of Interpublic

In 1960, Mr. Harper restructured McCann into four operating units, each reporting to a new holding company that eventually was named Interpublic Group of Cos. Each of the four, McCann-Erickson Advertising (U.S.), McCann-Erickson Corp. (international), McCann-Marschalk and Communications Affiliates (a collection of diversified communications agencies), was to be run independently but be interconnected.

McCann-Erickson Advertising, then with $170 million in billings, was positioned as a "pure" advertising agency, concerning itself with creative advertising functions. Named as chairman was Robert E. Healy, who had joined McCann in 1952.

One of the most noted campaigns in the 1960s was McCann's campaign for Standard Oil, featuring the newly minted Esso tiger and the slogan "Put a tiger in your tank." The campaign was first launched in 1964 in the U.S. and quickly expanded internationally. In 1966, the Sales & Marketing Executives Association gave Standard Oil a special award for making the Esso tiger an international symbol.

The agency credited its ability to train its executives to operate on a global stage as crucial to furthering its clients' advertising strategies. Interpublic continued its rapid expansion, buying agencies that became part of McCann-Erickson proper as well as adding full-service agencies that competed with McCann internationally. Between 1958 and mid-1965, Interpublic made 38 acquisitions.

McCann-Erickson's international expansion was a key part of that growth. Agencies were added in Mexico, Central America, the Caribbean, Sweden and Spain. In 1961, McCann itself signed a joint venture with Hakuhodo, then the No. 2 agency in Japan.

Interwoven with the fortunes of its parent company, McCann-Erickson rode out some rocky events in 1967, when Interpublic's $9 million bank debt threatened to pull the agency into insolvency. The Interpublic board finally ousted Mr. Harper in November 1967 and named Mr. Healy CEO, then chairman in February 1968 when Mr. Harper left.

Mr. Healy put in place a restructuring program, arranged for $10.2 million in revolving credit and, with the help of clients willing to advance media commissions, restored the agency's cash flow. By 1968, it had regained its financial footing; billings in 1969 were $719.1 million.

From 1967 to 1972, international billings increased 114%, but in fall 1973, the domestic and international branches of McCann-Erickson were reintegrated into a single worldwide agency with its own consolidated management, a recognition that clients increasingly were thinking of their advertising strategies on a global basis.

"Things Go Better With Coke"

In late 1963, McCann launched the "Things Go Better With Coke" campaign, designed from the outset with the idea that whenever an ad for Coca-Cola appeared, it would bear a strong "family resemblance" to every other ad for Coca-Cola. The strategy was to give the soft drink a familiar image and sound no matter where it appeared.

By 1969, with the launch of the "It's the Real Thing" campaign, that approach had been refined to one of integrated marketing across all media advertising and promotional materials. In 1971, McCann created another memorable TV commercial for Coca-Cola as part of the "It's the Real Thing" campaign: "I'd Like to Teach the World to Sing."

In 1979, McCann again scored creatively for Coca-Cola with the "Have a Coke and a Smile" spot featuring football star "Mean" Joe Greene and a young fan. In the spot, an injured Mr. Greene tosses his jersey to a young fan who offered his Coke to his hero. The spot was the recipient of many awards, and McCann offices in other countries adapted the concept in spots that featured local sports stars.

In January 1981, Willard C. Mackey became worldwide CEO of McCann, which added several networkwide accounts such as the $20 million Texas Instruments and the $100 million R.J. Reynolds Tobacco Co. accounts. Goodyear consolidated all its overseas advertising with the agency in 1984. By the end of 1988, when John J. Dooner Jr. became president of McCann-Erickson North America, the McCann-Erickson, New York, agency had grown to billings of $675 million.

In the early 1980s, McCann's domestic network took off while international billings remained flat. That cycle reversed itself in the latter part of the decade, as international billings again took over the rapid-growth slot and the U.S. economy slowed. By 1985, McCann's U.S. billings had grown to $834 million; international billings were flat at $1.47 billion, accounting for almost two-thirds of McCann's total billings.

Between 1986 and 1991, McCann nearly doubled its worldwide billings from $2.8 billion in 1986 to more than $5.4 billion in 1991. Even in the tough business climate of 1992, McCann's worldwide billings rose another 14.8% to $6.2 billion. By 1993, McCann pulled in $6.7 billion in billings; only Dentsu, the Japanese advertising conglomerate, was larger.

In July 1995, Mr. Dooner was named CEO of McCann-Erickson Worldwide, which two years later renamed itself McCann Erickson WorldGroup. He succeeded Philip Geier as chairman-CEO of Interpublic in January 2001.

In late February 2003, the board of McCann parent Interpublic fired McCann Chairman-CEO James Heekin, replacing him with John Dooner Jr., who had been chairman-CEO of Interpublic. Early in the year, McCann lost the North American Coke Classic account; that November, Coca-Cola Co. ended its 20-year relationship with Universal McCann and moved media planning and buying Publicis Groupe’s Starcom.

In 2004, the holding company’s name was simplified to McCann Worldgroup and the agency’s name lost its hyphen, becoming McCann Erickson Worldwide.

For 2003, McCann-Erickson Worldwide had worldwide revenue of $1.22 billion, up 3.7% over 2002. In the U.S., it had revenue of $300.4 million, about the same as in the previous year.

Most Popular
In this article: