Interpublic-owned Universal McCann could do with a bit of the magic dust that seems to be swirling around rival Mediaedge:cia this year.
The pair have enjoyed contrasting fortunes of late. WPP-owned Mediaedge has been riding the crest of a wave, with its capture of the media planning and buying account for Freeview (MW last week). But McCann, critics say, has failed to bounce back from high-profile losses such as L’Oréal in 2005 and food brand RHM earlier this year. They also believe it is hamstrung by the controversy surrounding parent Interpublic Group (IPG).
Behind the Initiative
Industry attention has been focused on IPG stablemate Initiative’s own grim fortunes, but one agency boss thinks that has shielded McCann’s “worse” UK performance, with billings dropping more than 40% from £402m to £229m last year, according to Nielsen.
Meanwhile, Mediaedge says it has won 11 new accounts this year without losing any. The agency is leading its rivals this year with net billings of more than £40m and it has continued to triumph over bigger agencies in the pursuit of high-profile clients such as retailer Next. Its top spot in the billings league is made all the more impressive because the £40m figure does not include BT’s planning account, which was formerly handled in house but was handed to Mediaedge last month.
Mediaedge joint managing director Steve Hatch says the success is down to a mixture of low turnover of key staff, strong leadership, the buying power of Group M – WPP’s consolidated buying operation – and a commitment to non-traditional media.
While some question the distinction of the agency’s market offering, there is little disagreement about the benefits Group M brings. One observer says: “There is not a person in the market who would not want to go to a client with that buying power.”
Group M alone may not win the agency new business but many believe it has helped the agency as much as IPG’s well-documented financial problems have hindered McCann’s UK business.
One source describes McCann as a “moribund” agency while a rival adds: “Universal McCann needs a turbo boost.” He says the agency needs “significant investment” but doubts IPG is in a position to commit large funds.
IPG’s latest financial figures suggest it is beginning to turn the corner, an observation endorsed by the agency’s senior UK management.
And while rumours persist that IPG will create one network by merging Universal with Initiative, the agency is – for the time being at least – operating with a degree of financial and strategic autonomy.
It boasts a handful of recent account wins, including Ofcom and the Carbon Trust, but claims new business is not the agency’s focus.
Chief strategic officer Russell Place says McCann will concentrate on organic business growth from existing clients such as Microsoft, Intel and Telegraph Media Group.
Crossing the divide
He also believes the reshaping of its core planning and buying business earlier this year, when cross-media client teams were created, has given the agency a lift. But one agency executive criticises the move as mere “deckchair shifting on the Titanic”.
Others believe McCann now has the right management structure at global and UK level and that solid investment will reinvigorate the agency.
While Mediaedge will look to build on its recent run, McCann will be hoping to emulate some of its rivals’ success.