Adweek
New Day, New Way for Resurgent UM
After a series of setbacks, the IPG company's refocused efforts are finally paying off
July 20, 2009
NEW YORK After years of drought (some of it self-imposed) and armed with a different new business development formula, Interpublic Group's Universal McCann has won four pitches in the last two months with combined ad spending of $550 million. The shop, which stumbled badly a few years back with a string of major client losses, has implemented a series of changes in management and processes that appear to be reviving the agency's fortunes.
Last week alone the shop won the $100 million Charles Schwab account and successfully defended its $210 million buying account with insurance company Nationwide after a review that kicked off in December 2008.
In May, UM wrested the estimated $200 million BMW media business away from GSD&M Idea City after a review that started in September 2008 and, earlier that month, was awarded the $40 million Dyson media account.
Even discounting Nationwide, which was retained, the shop has already won more net new business this year -- $340 million -- than it did in the previous five years. The year is still young, but so far the shop has not suffered any client losses.
Jacki Kelley, who joined the agency as North American president in late April, credited worldwide CEO Matt Seiler with making a series of moves to better position the shop, including the hiring of Jen Hohman as svp, managing director of new business about nine months ago. An IPG veteran, Hohman was imported from McCann Erickson, where she worked on the U.S. Army account.
The shop, according to Kelley, now picks a separate business development team for each pitch, with many of those team members sticking with the client if UM wins the business -- a strategy increasingly being used by a number of media companies. "We're putting people in front of the client that they will ultimately work with," said Kelley.
Consultants say that's a smart move as it can be frustrating for clients to watch those who made the winning presentation suddenly disappear, leaving them with an agency team they hadn't bargained for.
"When a client is hiring an agency, they're hiring a team," said New York-based search consultant Joanne Davis, founder of her eponymously named company. "It's, 'Who's my one back to pat, who's my one throat to choke?' We tell our clients to make sure they know who the team is going to be" before selecting a shop.
Kelley said the ability to reach out to media oversight unit Mediabrands (formed a year ago) for an assist with specialized services like outdoor (OSI) or newspapers (NSA) as well as several new tools have also helped.
The shop has poured significant resources into a live consumer insight panel with 170,000 participants, and upgraded channel-allocation tools and a process for monitoring what consumers are saying about marketers and their competitors.
Jennifer Hanley, svp of marketing services for Nationwide, who oversaw the company's media review, said UM's analytics and tracking tools were among the reasons the insurer stuck with the company. Also, she said, the shop has worked well with the client's new creative agency of record, independent shop McKinney. "Their chemistry is good and they each understand how the other works," said Hanley.
Other key factors, said Hanley, included account service, agency management, and overall personality and culture. Nationwide, she added, tends not to spend as much as competitors in the category and they "want to make every dollar work hard."
The road to recovery has been a long one for UM. The nadir, perhaps, was 2005 when the shop lost close to $1 billion in accounts, including Lowe's ($315 million) and a portion of the General Motors buying business ($600 million).
When Nick Brien joined the shop as worldwide CEO late in 2005 (replacing Robin Kent, who was ousted earlier in the year), he spent a lot of time putting out fires on major accounts, including Microsoft and Sony, which had become dissatisfied. In 2006, the agency effectively declared a moratorium on new business efforts as it sought to shore up its offering and make sure existing clients were being serviced to their satisfaction.
In 2007, near disaster struck when Johnson & Johnson put its $3 billion global media account in review. UM was the incumbent on the lion's share of the U.S. business and spent most of the year defending it (successfully) and putting in place the extra resources it had promised to retain the account going forward.
When Brien was elevated to CEO at Mediabrands in July of last year, he hired Seiler, former CEO at PHD USA, for the global UM CEO role.
Earlier this year, Seiler put his global team in place.
"A lot of agencies go through peaks and valleys," said Davis. "There's a lead and a lag. A lot of people were saying, 'UM, not doing well.' But they've accomplished a great comeback. It starts with shifting management and talent and making sure you have the right people in the right jobs."
Kelley, who joined UM from Martha Stewart Omnimedia, where she was evp, sales, is in the process of hiring a new team that will be specifically tasked with forging stronger ties with individual media companies.
