Research No Longer Dominates at Initiative

Beaven Stresses Digital, Multicultural to Help Shop Thrive Amid Industry's 'Massive Transformation'

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NEW YORK ( -- A senior executive at Initiative recently took a look at a poster on the walls of the media agency's reception area and saw an intriguing print ad for Lucia Duque Gold, a new brand of premium rum that Initiative had devised. Turns out the product is fictional; the ad was meant to highlight a product made in "Cane," a drama on CBS. But the executive was so taken by the poster, believing it was real, that he worried the work would anger Coors, another Initiative client.
Richard Beaven
Richard Beaven

The Duque poster signals Initiative's desire to branch out from its mainstay services. Long known for its research capabilities, Initiative, part of Interpublic Group of Cos., has been thought of as any other media-buying firm: a commoditized purchaser of media time and space for marketers including Home Depot and AOL. But with Richard Beaven at the helm of its North American operations, Initiative is trying to dress itself in a few new costumes.

Still needs to ramp up
Mr. Beaven became CEO of Initiative North America in September 2006 in the midst of some difficult times. Interpublic has been trying to reorganize its media operations after suffering through media-business losses from Unilever, Nestle and Coca-Cola. Some of those losses came from Initiative. Wall Street has seen some signs of stabilization, said Alexia Quadrani, an advertising analyst at Bear Stearns, who notes Initiative has stemmed the flow of losses, but still needs to ramp up on winning new business.

Since his arrival, Mr. Beaven has spent time making Initiative, a company built from smaller media agencies, feel more unified. He has also been working to bolster the firm's digital and planning capabilities, the better to retain marketers who are venturing into new ad venues and seeking a higher degree of intelligence and advice when it comes to figuring out where to place their ads.

He spoke with MediaWorks about his plans to become more competitive and how changes in the media landscape create new areas of emphasis for companies like his.

MediaWorks: Wall Street sees Interpublic's media assets as lagging those of its peers. When you got here, what did you think needed improvement and what have you done to follow through on your observations?

Richard Beaven: There were some specific areas I wanted to pretty swiftly build out further. The obvious one is digital. It seems to grow every week in terms of billings and people, and I would say close to 50% of the company is involved in some way, shape or form on a daily basis for their job. But quite frankly, I'd like to see 100% of the company involved in that. ...

Another key example is multicultural. We need to pay more attention to it in relations to our clients' business. One of the things I did earlier this year, I had breakfast in New York, lunch in Miami and dinner in Los Angeles, and on the way back the next day I stopped in a Chicago airport and had a meeting. By that point, we had developed partnerships with Hispanic and African-American agencies. That is all about saying we're not going to create from the inside the capabilities. We are going to tap into either sister companies or independent companies where we can use those resources and really up our game in a very collaborative way.

MediaWorks: When rivals such as Starcom and MindShare seem to be gobbling up the big accounts, how do you drive growth at Initiative? Can you squeeze more out of current accounts, or do you have to be more aggressive on the new-business front?

Mr. Beaven: My simple response to that is that I don't think, fundamentally, that anybody's success is based on how big you are or how big the client is. I think it's fundamentally based on the quality of the work or the insights of the people. Scale is [only] one aspect. ... Our clients are the best source of opportunity we have. I think if you start there, you have can both grow your business and you can get better and stronger client relationships through the work. That has been critically important to us in 2007. As we think about 2008, we would love to build more new-client relationships on top of that, and I think you get to that point eventually, but our course for 2007 has been, "How can we make sure we've got the best client relationship?"

MediaWorks: One of Initiative's more noticeable recent wins has been CBS's and Lionsgate's media business. Initiative has been involved in helping promote CBS's new fall season, and we've seen several innovative ideas, such as putting promotional labels on deli-counter packages and ice etchings in windows in the frozen-food section of the supermarket. Aren't you sort of functioning as CBS's ad agency, and does this set you up to do more of this business for other entertainment clients?

Mr. Beaven: You're right when you say that the interesting thing about CBS and Lionsgate is that we are their agency. There is no other agency, right? And that gives us access to people and relationships that can really help us put up those types of things into the market. It's quite unique. Where we are going in terms of what we are thinking about is that there really is no separation between media and marketing. And I think those businesses personify that. ... We can learn from that and push it out to more of our clients, not just the entertainment clients.

MediaWorks: For years, a media firm's accounts were tied to the creative business being serviced by sibling shops elsewhere within the holding company. These days, that seems less the case. Witness Wal-Mart putting its creative with Interpublic's Martin Agency while assigning its media to Publicis Groupe's MediaVest. Do you view this dynamic as a freeing thing for media firms, allowing you to do more for your clients without worrying about clashes with creative, or is it a detriment, removing a stream of revenue you might have counted on in the past at a time you might really need it?

Mr. Beaven: I think it has been very liberating. ... When you look at the media and the creative interface, media, without any question in my mind, has now an equal seat at the table strategically. ... I think that media has every opportunity now to drive the massive transformation in marketing more than anything else. ...

I think there is a redistribution of work going on. ... The issue is how you collaborate, how you get smart about not duplicating [services].

MediaWorks: As the media gets more complex to navigate, do you think buying gets more commoditized? Does planning take on a more necessary role? Initiative has long been known for its research capabilities -- do you see bolstering planning and research as a priority?

Mr. Beaven: I think that the trading itself, the to and the fro, can be a lot more efficient. ... What I don't think is disappearing is the human component, where you work with like-minded, smart, creative people to bring a strategy to life. ... There are so many choices. You need something to guide that choice. You basically have to find those moments where receptivity is relevant to your brand and your consumer, and something has to define that. It's where the strategy comes in. You'd never run a piece of advertising content without some form of strategy that drives it, so why would you develop media or investment plans that have no strategy? We have to be more strategic, and we have to do that with better consumer and channel understanding and insight.
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