Gold: Starcom

Leave it to Starcom to zig when every other media agency is frantically trying to zag. The agency that became a behemoth based on its strategic chops -- a core competency every one of its competitors claims -- is now convinced that "buying is the new black."

That's what Jack Klues, formerly CEO of Starcom MediaVest Group and soon to be top dog at holding company Publicis Groupe's media arm, Publicis Groupe Media, told attendees at MediaPost's Forecast 2006 Conference last September. Klues informed the audience that "without buyers, without their scale, and without their flawless execution and creative deal making, all of our remarkable insights and plans will wither."

Only a shop with rock-solid confidence could make a ringing declaration in defense of brawn when its rivals, the press, clients, and other industry insiders are all screaming about the need for brains. But it can and it does. For Starcom, it's a given that it's smarter than everyone else.

The agency, still the only major media shop without a true New York office, never has and undoubtedly never will forsake its Chicago roots and its Midwestern style. So when it says these things, or acts surprised that anybody even questions its superiority, it does so in such a placid, matter-of-fact way that it's hard to argue. As Dizzy Dean famously observed, "If you can do it, then you ain't braggin'."

A top executive at a competing media agency, perplexed and just a little awed, recently asked a luncheon companion why Starcom was so successful. "Execution," was the instant response. "They don't do anything the rest of you don't do. They just do it better."

Look at other media agency Web sites. Listen to rivals' pitches. It's all a variation on the same theme: the need for change, innovation in a fragmented world, and so on. Not at SMG, whose site declares "we are the fuel that powers brand growth." It doesn't believe it's a siloed marketing competency. It truly believes it acts as a strategic partner nonpareil for its clients.

Starcom earns Media magazine's 2005 Agency of the Year nod from for the same reason that Regina Sharp, vice president of marketing services for Luxottica, gave for awarding the agency its $90 million media buying and planning business in November: "clearly demonstrated leadership."

In fact, it's a family affair. For the past two years, Starcom's parent, SMG, was Media's Agency of the Year. And its interactive unit, Starcom IP, scored interactive Agency of the Year honors twice in the past four years. True, Starcom is only one of several media agency and specialist brands within SMG, a fact that has bedeviled Agency of the Year compilers at several magazines and media-business Web sites. But that in itself is a testament to the strength of the Starcom mystique.

Starcom was the media holding company's first brand. SMG and its predecessors were created by Starcom executives (and their forebears at the media department of Leo Burnett). Despite the remarkable recent success of MediaVest and the General Motors-winning Planworks, SMG's DNA is studded with Starcom concepts, philosophy, and management. SMG CEO Renetta McCann is a Starcom lifer. Klues was there at SMG's birth.

MediaVest, a descendent of the D'Arcy and Publicis side of the SMG ledger, is now run by Laura Desmond, who spent her entire career at Starcom and acknowledges that her philosophy of leadership is steeped in the Chicago shop's style and substance. (It is not a coincidence that MediaVest, moribund for years, shot to prominence as an individual agency powerhouse after Desmond took the helm more than three years ago.) GM Planworks, another Publicis-side SMG operation, also acts and talks like Starcom, because SMG is essentially an elevated form of Starcom-ness.

And one would be hard-pressed to find a major pitch won by SMG units in the past two years in which Starcom executives weren't deeply embedded, no matter what name the team called itself in the pitch. The list of those advertisers, including gm, Procter & Gamble, Coca-Cola, and existing clients like Disney, comprises what is surely the most blue-chip roster in the industry.

In Agency of the Year season, every other shop makes impassioned pleas explaining why it should be singled out as best of breed. Most ask for the honor. Not Starcom. In its submission, it doesn't even acknowledge there's a contest. In the very first sentence of the document, it simply calls itself "Agency of the Year" instead of using its name. Just in case we didn't get the point the first time, two paragraphs later comes the phrase: "the best media agency in the business."

It's hard to quibble with that assessment. Starcom won six new accounts in all last year, adding Gillette, Western Union, WellPoint, Bally Total Fitness, the Center for Disease Control's Verb, and Luxottica. It lost none -- the only U.S. media agency not to lose a single client all year.

And oh, yes, although SMG sibling gm Planworks (which described itself in its Agency of the Year submission as "a model of the future media agency") officially won the $3 billion General Motors review last year, the largest media buying switch in history, Starcom was up to its flow-charts in the victorious pitch. At least 20 percent of the team that is handling the blockbuster gm account -- now the largest advertiser in the U.S., according to Nielsen Monitor-Plus -- came from Starcom.

The shop knows how to calibrate a presentation to perfection, not just by parlaying its reputation for strategic thinking, but also by finding ways to show the client its flair for walking the walk. In one review, a competitor groused that Starcom got the client to participate in "working sessions" -- essentially relationship simulations, which not only highlighted the agency's ability to back up what it says it can do but also laid the groundwork for in-the-trenches links with the prospect.

In 2005, Starcom tore up the new-business scene. And as always, it leveraged its blue-chip roster to great effect, achieving 80 percent of overall revenue growth last year organically, with new assignments from such existing clients as Miller, Allstate, P&G, Applebee's, and Oracle.

The only thing that can stop Starcom for long, it seems, is itself. According to Starcom CEO John Muszynski, here was the most disappointing thing to happen to his team in 2005:

"The number of times we've had to say no to pitches. Any agency as established and respected as Starcom naturally has client partnerships across the bulk of major product categories -- or at least it should expect to. The problem becomes when the agency has formed as many partnerships as we have, as it blocks the opportunity to take on any new categories -- there simply aren't that many categories we haven't broken into."

In 2005, Starcom's success was also built on another of its we're-just-better differentiators: stability. This is not an operation that plays musical chairs in the executive suite, and once again, it smoothly transitioned its executives up and over. Last February, veteran national broadcast maven Muszynski was tapped as Starcom USA CEO, replacing McCann, who had moved up to SMG CEO of the Americas. And in October, when Klues was named chairman of Publicis Groupe Media -- where, again, the Starcom veteran added oversight of another Publicis-side media operation, ZenithOptimedia -- McCann stepped into the role at SMG.

The shop also continued adding former client marketing executives, something of an in-house specialty, even as its rivals scramble to attract creatives of all stripes. Last year, the agency brought on Tracey Scheppach, a former global marketing director for Monsanto, to run its newly formed Video Investment Group, and tapped Wendy MacGregor, former vice president of marketing for Hyatt Hotels, as senior vice president of strategic marketing.

In 2005, Starcom won a global agency of record assignment for Sun Microsystems. Notably, the account included responsibility for global media strategy, investments, and local marketing support, underscoring once again the agency's strengths in strategic thinking and insight-based innovation.

And Starcom continues to innovate -- a capability many claim but few deliver. The shop, already prone to ponder the strategic side of things, was one of the first to integrate the idea of media-agnostic planning when it created its consumer context planning positions, of which there are now several at Starcom, as well as at other SMG units.

Klues and company have loudly and forcefully argued for a "broadband upfront" for years, and in 2005, Starcom put its money where its leader's message was after the gm win, renaming its national broadcast team the Video Integration Group and charging it with evaluating, negotiating, and buying not just all local and national broadcast but also broadband and video-on-demand. In effect, this means looking at the marketplace as "one video universe." And in 2005, Starcom, whose Tapestry unit is the largest multicultural media agency in America, developed the first TV optimizer for multicultural audiences.

Under branded entertainment pioneer Laura Caraccioli-Davis, the Starcom Entertainment team continued to be in the middle of the most intriguing product-placement plays, including an interactive promotion for Sprint Power Vision in conjunction with the hit NBC show "Medium," which aired an episode last November in 3-D.

Starcom's inventive tinkering with its internal structure and processes also caught our interest in 2005, and probably goes a long way to explain the remarkable staff loyalty the agency engenders. Starcom's bonus plan provides employees -- all employees -- funds to purchase advanced technology. That's a pretty significant investment in smartening up the troops. In addition, under a program called TIPSS, rolled out last year, every Starcom staffer, regardless of specialty or client responsibility, will be trained in the basics and practices of online advertising.

Starcom is not without its challenges, of course. At press time, it's fighting to hold on to its $500 million Kellogg U.S. business in a roster-shop shootout with Carat and MindShare. And last year saw a significant and very surprising crack in Starcom solidarity when strategic chief Nick Brien took over Interpublic's Universal McCann. Recruiters are relentless in making runs at Starcom stars, of course, but it is unusual for a big Starcom name like Brien to end up in a high-profile position at a competitor.

Still, Starcom has the pedigree, the performance, and the holding company parent to maintain its advantage. It may win more business in 2006, it may win less. But it will remain at the top, in contention for every big piece of business that comes loose -- conflict permitting, of course.

As far as Starcom is concerned, that's only right.

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