Commentary
Agency Profile: VML
- by Adam Herman , May 24, 2002
With total online billings of $95 million (over $135 million for all media billing), VML is the largest interactive agency in the Midwest, more than double the size of Starcom IP out of Chicago. VML was founded in 1992, when John Valentine, Scott McCormick, and Craig Ligibel left another Kansas City agency to form their own. Matt Anthony, VML’s CEO, joined the company two years later and has led the agency in a 35 percent average annual growth rate each of the past four years. VML’s success and its unique approach to the business attracted the attention of WPP, one of the world’s largest communications services groups. WPP acquired VML in June of 2001. VML now has 172 employees servicing 44 clients in four cities—KC, New York, Dallas, and White Salmon, WA.
“VML is a different kind of agency,” said Anthony. “We’re a full-service marketing company that provides all the traditional agency functions—from media to creative to web development. But what makes us different is our focus on solving our client’s problems. We’re really more of a strategic marketing think tank. We don’t recommend cookie-cutter programs, we provide solutions that solve the marketing challenge.”
Some of these solutions have come at the expense of the bottom line. “One of the agency’s mantras, ‘We don’t buy media, we acquire minds,’ goes to both the heart of how we plan and our core values,” noted John McGuigan, director of integrated media. “We once walked away from several million dollars in billings by recommending an affiliate marketing program over of a straight media buy, because it served our client Sprint better in the end. We have a principled belief to be honest with ourselves and our clients.” Perhaps it’s a Midwestern cultural difference, but this adherence to a strong set of values has an obvious impact on the clients they work with, the people they hire, and the way they do business.
A Midwesterner, McGuigan fits right in with the rest of the agency. Prior to his arrival three years ago to build VML’s online capabilities, McGuigan spent 20 years in the advertising business specializing in strategic media programs for a variety of national and international marketers. He spent his early career in St. Louis with Advanswers, one of the largest media buying companies in the U.S., and worked as VP, director of media services at HCM Marsteller, Chicago. Most recently, McGuigan was director of media and promotion services at Best Buy, where he managed its $450 million in-house media operation.
McGuigan oversees a department whose staff handles both offline and online media duties for clients such as Bayer, Sprint Business, H&R Block, Burger King, Colgate Palmolive, Payless Shoe Source, Yellow Corp., American Express Incentive Services, and AMC Movie Theaters. “It’s a more holistic way to plan and buy when everyone knows each medium well,” said McGuigan. Of their online media billings, about 30 percent is strictly media planning and buying. The remainder of their online work is search engine placement, affiliate marketing, integrated marketing, and web development.
“Our planners use their offline negotiation talents to buy online,” he says. “I feel these techniques make for a greater value proposition for our clients. Our planners probably spend more time talking about customization than making a buy. They look to make opportunities rather than take something off the shelf. For our H&R Block client, for example, we didn’t just buy ads from Yahoo, but we created a virtual tax center within the Yahoo environment. People could literally do their taxes start to finish without leaving the site.”
VML also runs an offsite Usability Lab to provide primary research for website design and e-commerce solutions and to test that the sites they are developing provide the best user experience possible. “The lab puts consumers and business people in a controlled environment and asks them to navigate through websites,” said McGuigan. “We learn a tremendous amount by watching people use the sites that we would never have uncovered by just listening to them talk about it.”
A good example of VML’s ability to provide unique strategic marketing programs, not just off-the-shelf plans, is the “Where Everything Starts to Click” campaign for Sprint Business. The program’s goals were to increase site traffic to Sprintbiz.com, help increase the number of qualified leads within Sprint’s B2B database, increase online sales as tracked by reviewing prior sales volume versus sales during campaign and increase brand awareness via research analysis at the end of the campaign. Their target was a B2B audience of IT decision makers, business owners, and those who influence the telecommunication purchase process.
They employed a mix of both traditional and nontraditional offline and online media to reach the target audience, including 14’x48’ billboards in high-traffic business areas, 10-second traffic radio sponsorships, Chevys driving around Dallas and Houston wrapped in ads, opt-in emails, newsletter sponsorships, and a variety of online ad units.
Joe Hasselwander, marketing manager at Sprint Business, was impressed with VML’s work. “The ‘Where Everything Starts to Click’ campaign represented a break-through in online marketing and an excellent example of truly integrated media,” he said.
Not surprisingly the campaign achieved all its objectives. Site traffic to Sprintbiz.com increased by 70 percent as measured by a change in site visits from before the campaign launch date. The campaign generated qualified leads at a lower cost per lead than historically achieved with same offers. The campaign produced a significant increase in online sales, and aided-awareness for the brand increased significantly in post-wave analysis.
MediaPost VP of Operations Adam Herman can be reached at adam@mediapost.com.
