Global challenge for Red Cell’s new blood

Is Red Cell suffering death by a thousand cuts? The advertising network has seen changes at the top in the past seven days that could either herald a new dawn or see the network slip back into being a repository for clients from WPP Group’s sister agencies.

Co-chief executive officer Lee Daley is leaving the network after two years in the hot seat, while chief financial officer Kathryn Herrick has been poached to become chief financial officer for FCB in Europe, the Middle East and Africa.

Red Cell’s other co-chief executive and also chairman of New York-based Berlin Cameron/Red Cell, Andy Berlin, now becomes the sole skipper, though WPP is parachuting in Laurence Mellman to help the agency keep a steady course. Mellman has the new title of global chief operating officer of Red Cell; he was chief operating officer of international specialist communications at WPP.

Daley, a former executive vice-president and chief strategic officer at McCann-Erickson Europe, says he is leaving because the job demanded too much travelling and too little opportunity to deal directly with clients and creative strategy.

Observers say Daley is passionate about his job, but his personnel management and motivational skills could be questioned.

Red Cell was launched in January 2001, headed by chief executive Luca Lindner and chief operating officer John Wringe. It positioned itself as a champion for “challenger” brands. It is now made up of 58 offices in 35 markets and WPP has aggressively acquired hot-shot creative agencies to build up the network, including HHCL & Partners, Les Ouvriers du Paradis and Berlin Cameron.

There is no doubt that WPP’s resources and Daley and his team’s drive put a rocket under HHCL – the agency was losing key clients such as Britvic and Egg, but in the past 12 months it has undergone a renaissance, winning BSkyB and Travel Inn among others. Meanwhile, Berlin Cameron snatched the flagship Coca-Cola account in the US with its “Real” concept.

But observers see a number of problems that Red Cell needs to address before it can move forward, the foremost being that it has no sizeable international pieces of business apart from Alfa Romeo, New York Life and Singapore Airlines to help bring the disparate entrepreneurial shops into a harmonised network. TBWA/Europe chairman Paul Bainsfair says: “Even established networks find it difficult convincing clients that they are as homogeneous and well-knitted in their various territories as the clients are.”

Ben Langdon, former regional director at McCann-Erickson Worldwide and a founder of new agency Ben Mark Orlando, agrees that multinational clients are key to gluing a network together and such accounts ensure the “younger generations learn how to work across borders and with people in different countries.” Bainsfair adds: “It’s very important that your network has a unified approach that is consistent when clients come to talk to you.”

Red Cell executives are frustrated that perception lags behind reality regarding the network’s positioning. Daley says he ditched the challenger brand proposition when he was first appointed in 2001, while Berlin adds that there was a lot of overzealous “noise” about challenger brands on the agency’s launch.

Daley says WPP needs “a very strong creative network” and Red Cell’s strategy is to bring together agencies at the “cutting edge” of their local culture to compete with boutique agencies doing international work, such as BBH, Wieden & Kennedy Amsterdam and Mother. Berlin believes it is the quality of work that will attract clients and adds: “We do not see ourselves as a network for small clients but as an exciting alternative for very big clients with difficult and pressing problems.”

However, observers remain doubtful and former Red Cell chief Wringe, now chief executive of the Sandom Group, says the network has become “neither fish nor fowl” and has fallen victim to “the triumph of pragmatism over strategy”. He believes that it is to Red Cell’s detriment that it falls between the stools of the boutique shops and the big established networks – it’s not as agile as a Leagas Delaney nor does it have the benefits of the large established networks.

There is speculation that another strong management hand may be needed in Europe to drive the Red Cell business. One senior agency executive wonders how Berlin, as an American with a creative’s sensibility, can run a network that has two-thirds of its offices in Europe and south-east Asia: “Creative people do not aim to spend time running networks.” Berlin parries this by saying that the majority of the senior Red Cell team is European and Mellman will be based in the UK.

While Wringe believes that Daley has made an “operational success” out of the network, managing to merge acquisitions such as HeadlightVision and parts of Bates Worldwide, he believes that Red Cell needs to be more client-facing and less “introspective”. It should create an “inner network of extraordinarily creative and successful agencies in key commercial centres around the world” that can be sold to clients, he says.

Red Cell has made it on to pitch lists for global and international businesses in the past year – MacDonald’s and Siemens being two examples – and there is speculation it is chasing HSBC, although the bank denies this. Berlin describes Red Cell as “work in progress”, with the foundations laid to pull off substantial wins in the next few years. It’s the strength of those foundations that competitors will be scrutinising closely.