• by Joe Mandese  @mp_joemandese, January 7, 2004

What makes a Media Agency of the Year? Frankly, as the staff of MEDIA Magazine began planning its first award for that honor, we weren't sure exactly what the criteria should be. New business wins? Client retention? Overall billings growth? Client sales growth? Great media deals? Breakthrough planning and research? Best of class management systems? Overall industry esteem? In short, all of the above. And much, more.

While those tangible achievements are clearly important, we also considered a host of intangibles like creativity, innovation, and leadership - things that aren't always easily quantifiable, but which awards like this often place great emphasis on. In the end, it seemed to us that a Media Agency of the Year is a lot like great art: you know it when you see it, but sometimes you have difficulty explaining it.

While all that may be fine for the media party chatter circuit, it wasn't sufficient for establishing an award that would honor the industry's best. So we went to the experts and created an advisory panel of independent industry leaders to help us in the judging process. People who were not directly aligned with media shops, but who have intimate expert knowledge of the agencies, their clients, and the industry at large. They gave us some valuable upfront input and in the end helped us make our final selections.

Early on, one suggested a good idea might be to simply ask the candidates themselves what they considered to be the key criteria for choosing a Media Agency of the Year. And that's exactly what we did. Their responses ranged from succinct to elaborate. Some offered telling insights about how media shops think of - or at least position - themselves. Others were little more than platitudes. The substantive responses came when we asked the agencies to flush out those thoughts by answering a follow up question: "Based on these criteria, explain why your agency deserves to be Media Agency of the year for 2003." Their answers, which were among the key factors we used to make our selections, are explored in the sections that follow. For the most part, we found it comforting to learn that there were some consistent patterns of "growth" and "innovation" running throughout the submissions. On the other hand, some of the judges said that based on the responses, it was difficult to see how some of the agencies were differentiating themselves.

"The Media Agency of the Year must be the 'gold standard' for the business in a given year," argued MindShare, a shop that, in fact, came very close to receiving that honor. "Its successes must be demonstrated through multiple achievements across the widest range of benchmarks, including: its innovation and creativity in reaching consumers on behalf of the brands entrusted to its care; its ability to generate return on investments for clients; its aptitude for winning new business, while at the same time maintaining current client relationships; and the ability to foster an environment that attracts talented people and that also affords current employees the opportunity to grow and excel."

And the Winner: Starcom MediaVestGroup, by Paul J. Gough
You don't have to talk to anyone from Starcom MediaVest Group for too long to realize that it's an agency that leads on competency and innovation in the here and now and is intensely focused on the future. Those hallmarks show through in everything it does.

Or, as one executive suggests, innovation is part of Starcom MediaVest Group's DNA.

It's no surprise that the media industry is changing rapidly. The chief executive officer of a rival agency recently remarked that media has changed more in the past 36 months than it has in the preceding 36 years. MEDIA believes that, too, and it's why we've selected SMG as the media agency of the year.

By any measure, 2003 was an awesome year for SMG, which is owned by French holding company Publicis Groupe SA. SMG snagged one of the year's most hotly contested accounts, the $350 million consolidation of planning and buying at Coca-Cola Co. SMG won more than 100 accounts during the year, including DirecTV, Gateway, and Cadbury. By a yardstick that has become popular among agencies - organic growth - SMG picked up additional business in the year from existing clients like Kraft, Procter & Gamble, and General Motors, where the company holds coveted agency-of-record designation. SMG has found success with a host of smaller units, from the interactive work of Starcom IP to the multiculturalism of Tapestry, from the direct marketing specialties of Halogen to the directory experience of SMG Directory Marketing, and many others.

But SMG also laid the groundwork for the future. It extended consumer context planning, which targets the optimal channel and/or context for delivering a brand's messages, to total 13 employees in key areas around the network. The company started SMG Play, an agency that connects marketers to the video gaming industry. It used a mock marathon for Kellogg to promote Nutri-Grain bars. And Starcom devoted resources to creating a market for broadband, building a system that sells the emerging technology much like the TV upfront market.

Starcom MediaVest is "closest to the agency of the future," says Erwin Ephron, a consultant and one of the judges for this year's awards.

Impressive for a company that only came into existence in 1999, the product of a merger between Leo Burnett and D'Arcy, McManus & Masius. It grew when Publicis Groupe bought Bcom3, and in 2002 it had worldwide billings of $18.4 billion. In that time, SMG has not only survived its corporate changes, but has thrived as a place with passionate, talented people, vast expertise in planning and buying, a willingness to take risks on the future, and a client-centered focus.

"We're an organization that does not like to stand still. We recognize that the industry in which we live is one of regular change, and I think now the only difference is the speed of change, which is nothing short of neckbreaking," says Jack Klues, chairman and chief executive officer of Starcom MediaVest Group. "That has required us as an organization to redouble our efforts to continually try to be ahead and think ahead of the next big thing."

Renetta McCann, chief executive officer of Starcom North America, says SMG has a corporate mindset that bends toward innovation without getting so far out that it neglects its clients' present needs.

"Our focus is on the future, it's about what is the window that we're going to be operating in the next three to five years. What are the implications for our clients? How is the media landscape going to change?" McCann says. "What the last 10 years have taught is that it won't remain static."

Starcom MediaVest prides itself on looking into the future, and not just for the sake of change. It's all about clients and their needs, for today's media plan and buy, and for next year and beyond. At SMG, that focus expresses itself in three words: "Fueling brand power." SMG says its focus - consumer insights, innovation in contacts, and creating value - permeates every part of the agency's thought and effort.

"It's very easy to talk about what you're going to do, to talk about the next big idea. It's harder to deliver. We want our company to be people who say what they're going to do and then deliver," says Laura Desmond, chief executive officer of MediaVest.

It's those qualities that Kraft, which recently renewed its AOR arrangement with MediaVest, appreciates.

"MediaVest demonstrates their commitment to Kraft every day. Our relationship continues to evolve, with focus on expanding our media contact points, building on innovation, and dealing with the realities of the marketplace. And always MediaVest has come to the plate to tackle each new challenge," says Dan Miceli, Kraft's vice president of media services.

Coca-Cola, which just recently awarded its whole media business to SMG has been impressed by the agency.

"We did a competition with some of the best agencies in the business, and what came through real strong for SMG was an incredible suite of optimization tools that help us to be very smart in distributing the investments for the brand," says David Raines, vice president of integrated communications at Coca-Cola. "It's a real capability in the people and the processes that they have, smart people who are helping us think through a very complex media environment."

Raines says Coca-Cola thinks that SMG is the leading agency in consumer context planning, or CCP, as it's called. CCP looks at the media world through the eyes of the consumer, moving beyond reach and frequency and other industry metrics toward the true aim: Finding out what impact advertising messages have in consumers' minds and behavior. "It's not just counting eyeballs, and it's not just counting ears. It's getting inside the brain and measuring to what end, so you revalue those exposures. Then you can recalibrate a CPM based on impact ... why did that [message] work, and how," explains Jana O'Brien, executive vice president and director of strategic research at GM Planworks, the SMG unit that pioneered consumer context planning in 2000. The model has now spread across other key parts of the SMG network, including MediaVest's Coca-Cola, Kraft, and P&G accounts.

"We are determined to build brand experience through engagement, not just exposure," says Nick Brien, president of SMG Diversified Services. "The CCPs have a fundamental appreciation for how to engage, emotionally and relationally, and we need their experience." Diversified Services encompasses sports sponsorship and event marketing, multicultural, direct response, and SMG Play, among others. Brien says that his division achieved double-digit growth in the past year because of SMG's commitment to offer clients innovative and strategic solutions that engage consumers and boost brands.

"If we're talking about engaging rather than exposure, and as an organization are committed to delivering brand experiences, then clearly we have to extend beyond our traditional offerings of media," Brien says. "Innovating within traditional media remains a critical competitive advantage for our clients' brands. Increasingly, because of a changing marketing environment, brand experience is being built in non-traditional ways."

The desire to go beyond the traditional led Klues to decide in 2002 that he wanted to build a base in the broadband market, where many believe the future is headed. SMG carried out the plan, in a system reminiscent of the TV upfront, which the company now calls Broadband Embrace. And embrace SMG did, placing more than $5 million in video advertising buys on Yahoo!, MSN, and FeedRoom, among others. Among all of SMG's initiatives in 2003, its early and lucrative moves in broadband might have the most long-lasting implications for the company.

"We believe that broadband will be a defining - is already a defining - watershed in how media will be consumed and manipulated by consumers," says Rishad Tobaccowala, president of SMG IP, who led SMG's broadband strategy. That's led to a lot of learning for SMG, along with securing deals for content and technology that will become ever more critical in the coming months and years.

"When people get broadband, they start consuming much more Internet-based media, between 20 and 50 percent more in the first year," says Tobaccowala. "In broadband homes, the Internet is second only to television and it far outstrips most other media. The other thing that it does, it changes the way that you consume the Internet... Because of the always-on connection, it becomes a part of your everyday life."

Getting ahead of the curve is what got SMG into a test of ad-supported video on demand with Cox in San Diego, the work that SMG Play has been and will be doing, and the extensive research that the company did with digital video recording service TiVo. The future of video is the main focus of a full-time team in Chicago called emerging contacts, or TV 2.0, led by Tim Hanlon.

"Those are things that are very important," Tobaccowala says. "My job at the company is to make sure that we surprise the future, rather than the future surprise us."

As O'Brien puts it, "We see innovation as the lifeblood of the brands in the future." Innovation is one of the many things that consultant Ephron admires about SMG. He says that while many agencies are run by buyers, SMG is run by a planner that isn't afraid to look beyond the domination of television. He says that SMG is innovative, great at multiple channels, has the best interface between planning and research, and takes risks.

Its multiple-channel strategy is built on a mix of equals, with no single agency or unit dominant.

"They're not subservient. All the people are strong, which is really how you get integrated communications and planning," Ephron says. "I often feel the agency is known by its people. I think they have strong people."

SMG McCann agrees. "There is an ebb and flow between the units. Part of Diversified Services' success depends on a Starcom or a MediaVest doing well, and vice versa," McCann said. "We recognize that interconnectedness and we really work very hard to try to support each other."

Klues says that in the coming year, SMG will continue to press for intelligent strategic innovation and experiment in new media territories.

"One of the reasons why we are so successful is because we're actively embracing the future," Tobaccowala says. "The faster the future comes, the more differentiated we will be. We are seizing tomorrow."

Media Agencies of the Year...Almost: Mindshare and OMD, by Joe Mandese
In some ways, 2003 was a year that might have warranted a Media Agencies of the Year Award. In the end, MEDIA Magazine had to narrow it down to a single winner. And as much as we wouldn't want to take anything away from Starcom MediaVest Group, the final selection was an extremely close one, with two other shops, MindShare and OMD, nearly besting SMG, and several other agencies making compelling arguments and demonstrating many of the qualities we would have expected from the best-in-class. In fact, it would have been easy to justify giving any one of our finalists an award.

During an especially trying year, as many agencies, marketers, and media companies were still struggling to regain a footing, each of these agencies demonstrated growth and innovation in myriad ways. And while the industry appeared transfixed by a few high-profile pitches such as Coca-Cola Co.'s hard-fought media review (won by SMG) and McDonald's consolidation at OMD, there was tons of behind-the-scenes business-building among our finalists and their clients. As spunky and service-oriented Cincinnati-based Empower MediaMarketing noted, "At the end of the day, though, the thing that matters most is building business for clients. Performance and service result in high levels of client satisfaction, which brings new clients and retention of existing accounts."

And since it is not always easy to know the first part of that equation - the growth in a client's business - the industry often relies on the latter, new business and client retention, as a surrogate measure that an agency must be doing something right. All of our finalists did well in that regard, relative to their own scale, but a few excelled, especially MindShare and OMD. And if MEDIA Magazine were awarding gold, silver, and bronze medals, we'd have to say those two agencies just missed a gold and were tied for silver.

In fact, after near unanimity for SMG, the voting among our advisory panel and the MEDIA editorial team was fairly split between MindShare and OMD. "MindShare is clearly No. 1," championed Mike Lotito, managing partner of Media IQ and one of our judges. "MindShare's wins were real and they really didn't lose anything," said the onetime agency media director, adding, "You can't argue with $1 billion in growth, three years in a row."

While its growth was less publicized than some of the other account wins in its class, MindShare picked up new business from clients such as Burger King, Nextel, Cisco Systems, DuPont, Yahoo!, FoxSports.com, and the Chemical Council, totaling $1 billion in incremental billings during 2003, the third consecutive year that it broke the billion-dollar mark. What's also important is that nearly two thirds (60 percent) of MindShare's new business growth came from relationships that had nothing to do with other WPP agencies. In fact, in the two instances that a WPP agency lost a significant advertising account that MindShare also handled media for, MindShare retained the media. Lastly, not one significant MindShare client put its account up for review in 2003.

"MindShare did a great job," noted Steve Fajen, head of the media services practices at Morgan Anderson Consultants and another member of MEDIA Magazine's advisory panel. The problem, he said, was that they didn't provide a lot of detail to show how their great service and planning and buying innovation contributed to their billings growth. "They stepped back and provided a big picture, but they didn't provide enough detail to demonstrate how they really set themselves apart."

Others agreed that MindShare is clearly a media services juggernaut, but that without knowing explicitly what the ingredients of that growth were, it would be difficult to say they were truly best-of-class. That's not to say that MindShare didn't demonstrate innovation in 2003. While many media shops focused their TV buying strategies on product integration efforts, MindShare entered into what was touted as a first-of-its-kind programming partnership with ABC. The deal calls for the agency and the network to jointly develop and produce new TV series that will air on ABC. And in a daring new business model, MindShare said it would assume some of the risk of developing these series by sharing in their development costs. In exchange, the agency participates in the upside of any back-end profits generated by the programs.

"If successful, this deal may prove to be a template that helps deliver compelling, cost-efficient programming to our viewers," said Alex Wallau, president of the ABC Television Network.

In fact, MindShare does appear to excel in the national TV buying business, but in the end, some of the judges felt that might also be the agency's Achilles' heel. "All the right pieces, but no vision. Still, in essence, a TV agency," said Erwin Ephron, a partner of Ephron, Papazian & Ephron and another member of MEDIA's advisory panel.

MEDIA Magazine's judges were even more split on OMD. Clearly, the agency had an outstanding year, capped off by McDonald's decision to consolidate its $1.3 billion global media account at the agency. The win included new business in 39 countries, as well as new assignments in markets such as North America, where OMD already handled the lion's share of McDonald's business. That huge win, in addition to new global media assignments from long-time client General Electric, contributed to more than $1.7 billion in billings growth during 2003.

The problem was that OMD's momentum might have been a little too global in 2003. "I think the global story has to be OMD," said Media IQ's Lotito, "but they didn't generate any buzz on the street here in the U.S."

That's not to say that OMD didn't excel stateside. Like its sister Omnicom brand agencies BBDO, DDB, and TBWA, OMD demonstrated exceptional creativity in 2003, including breakthrough media strategies for McDonald's, Cingular, Absolut, Campbell's, and Pepsi. The agency's media work on Pepsi alone would have qualified it for a Creative Media Agency of the Year Award, including the "Pepsi Smash" series produced by OMD's entertainment division, featuring such marquee talent as Beyonce and Ashanti. The "Pepsi Play for a Billion" consumer promotion was one of the biggest media events of the year, based on PR attention alone.

But it was some of the agency's behind-the-scenes innovations that brought OMD very close to being our 2003 Media Agency of the Year - things that may seem far less glamorous than MindShare's program partnership with ABC, or OMD's "Pepsi Splash" or "Pay for a Billion" events. For example, the agency created the "Guide to Business-to-Business Media" to help client GE navigate the incredibly complex world of technical and business publications, which are often very important to some of the company's industrial divisions. The guide compresses information covering 205 different categories of specialized business publications (compared to the agency's estimate of only 51 consumer magazine categories) in an easily accessible planning tool for 100 different GE business units. The guide, which includes research comparing the advertising effectiveness of various trade publications, also is designed to make the process of buying B-to-B fun and exciting. Now that's creativity.

"That was something gutsy for them to do," said Morgan Anderson's Fajen, noting that it is the type of credential agencies normally use to showcase themselves.

Despite their remarkable achievements, the best-of-class of 2003 did not match the even higher mark set by Media Agency of the Year SMG. But they came pretty darn close.