Sears Win Validates MPG, Marks Yet Another Blow For Carat

by , May 24, 2007, 8:00 AM
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Perhaps more than any other recent big media account move, Sears' decision to go with MPG signals a shift in the momentum of some major media shops. For one thing, the account is the first really sizeable win for MPG's North America unit since Charlie Rutman signed on as CEO two years ago, and comes as parent Havas has taken a keener focus on its U.S. operations, effectively relocating its global media management team to New York from Europe.

The move meanwhile is another in a series of blows for Carat North America, Rutman's former shop, and once the poster child for new business among U.S. media agencies, which suddenly can't seem to come up with a major win. In fact, insiders say the real story in the Sears pitch isn't why MPG won it, but why Carat lost it only months after winning then immediately losing Wal-mart's media account.

"It was their's to lose," another agency finalist confided in MediaDailyNews. "You've really got to feel for Carat, because they were the favorite coming into this pitch with all the knowledge they had from Wal-Mart."

Carat executives were not available for comment, but the decision is another heart-breaking loss after a series of failed pitches. In addition to Wal-mart, which Carat won, then lost on a technicality, Carat has lost many of its most prized accounts during the past year, including Pfizer, Hyundai, Rent-A-Center, and CBS, though both Pfizer and Hyundai had more to do with organizational moves by the clients than developments at Carat.

MPG's Sears win, meanwhile, suggests a bit of Madison Avenue role reversal. Coming off a series of important but smaller wins like Dannon and ExxonMobile, it is affirmation that MPG has both the scale and services pitch to win a major piece of business.

"MPG has a proven track record in employing media solutions grounded in insights and facts that will integrate traditional and emerging media strategies seamlessly with the Sears Holdings' creative and marketing Processes," stated Maureen McGuire, executive vice president and chief marketing officer, adding that MPG's "considerable expertise in reaching multicultural audiences" was another key factor.

MPG, in conjunction with its Media Contacts unit, will handle all planning and buying for Sears and Kmart across most offline and online media, including television, radio, magazines, out-of-home, online and emerging media.

The account does not include newspapers and newspaper inserts, which are handled through Sears in-house team, but the account still is estimated to represent more than $400 million in billings for MPG, as well as the all-important planning and strategy portion of the business.

It's also a big loss for WPP Group's MindShare and MEC Interaction units, which are the incumbents on the account. While WPP insiders say the loss will hurt both in terms of total revenues and profitability, they also said the account had waned some from its glory days a few years ago, and the move frees WPP shops to pitch some seemingly unaligned categories that were precluded under Sears, such as fashion, electronics, appliances, and of course, retail.

Another big story in the Sears review was the accounts fourth finalist, Horizon Media Inc., which was a dark horse, but comes out of the pitch looking like a real contender with some of Madison Avenue's biggest media networks. According to one insider, the decision actually came down to MPG and Horizon.

However, the final story is MPG's, and as CEO Rutman puts it, "Winning beats losing every time."

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