IPG to Create New Role, Mission for Magna Global

NEW YORK Last month, when Bill Cella, CEO of Interpublic Group’s Magna Global, parted ways with the company, many in the media world believed IPG would shutter the eight-year-old unit that helps negotiate TV rates for IPG’s big buying and planning shops, Initiative and Universal McCann. In fact, just the opposite is true. With Cella gone, IPG is intent on expanding Magna’s scope beyond its current primary role of helping the IPG media agencies prepare for the upfront network television marketplace.

Plans for the new Magna—or Magna 2.0 as insiders refer to it—are still being devised. But the search for a new leader is under way, a task that IPG would like to complete by the end of the first quarter, sources said. Those sources also say that, preferably, the winning candidate would have expertise in digital and emerging media platforms as well as traditional media. Executives involved in the revamp are exploring ways to expand Magna’s marketplace intelligence-gathering capabilities to print, digital and radio. They also say the unit may develop a process for testing on a regular basis new ways to go to market, such as auctions and other alternatives to the upfronts.

The task of shaping Magna’s makeover falls to the two shops that will benefit most from its services—UM and Initiative. In fact, for the first time, Magna will report to executives at those two agencies: Richard Beaven, North American CEO, Initiative, and Mary Gerzema, U.S. president, UM.

Previously, Magna reported to various IPG executives, perhaps leading to some of the confusion over the unit’s role. Most recently, Cella reported to the IPG media council, headed by Philippe Krakowsky, evp, strategy and corporate relations at IPG. Prior to that, he reported to Mark Rosenthal, who was CEO of the now defunct IPG Media, which oversaw Initiative and UM in 2005 and 2006 before being folded in October 2006. Earlier, Cella reported to the CEO of IPG itself.

When Magna was first formed in 2001, its main mission was to aggregate the TV spending (then close to $9 billion) of IPG’s biggest media shops, Initiative and UM, in order to gain better pricing in the marketplace. The idea was basically to import a model that had been used in several European markets, including Germany and the U.K., where clout is key when it comes to buying TV time.

(Over the past seven years, Magna has expanded to almost 20 overseas markets, an expansion guided by Magna Worldwide chairman Ira Carlin, who like Cella, is a UM veteran. With overseas expansion plans complete, Carlin quietly left the company late last year, just a short time before Cella. )

But as Gerzema notes, buying clout today is part of the price of entry to doing business for the big media agencies. “We all deliver that,” she said. At the same time, part of Magna’s offering has been to gather marketplace information to help buyers at the agencies better assess market conditions and predict how pricing will play out across different ad categories, dayparts or networks. As the TV market grows crowded with new outlets, and other complications, such as the writers’ strike, are introduced, “the notion of intelligence from a centralized resource to both our brands becomes more compelling,” she said.

Under Cella, its founding CEO, Magna was constantly dealing with the politics that came from working with two major agency networks. Several sources who know him said that was a frustration for Cella. Last week, however, Cella downplayed the notion. “Who doesn’t get frustrated at work from time to time?” he asked. “I had a great run. I think the original vision was fulfilled: research, content and aggregating the client dollars.”

That said, he also thinks the company will benefit from the makeover, particularly figuring out the digital piece. “Sales organizations want to come to one place to sell their traditional and digital assets,” he said.

At the two agencies there have always been huge sensitivities regarding Magna, stemming from the competition and client conflicts between the two shops. UM, for example, has Microsoft as a client, while Initiative has AOL. UM once had home improvement retailer Lowe’s, while Initiative has Home Depot. Both have movie studio clients. Executives at the agencies welcomed the marketplace intelligence that might give them a better read on the TV ad environment, but they wanted to buy their own clients’ ads.

Ultimately, most deals got done by committee—literally, a Magna committee that consisted of Cella; Magna evp Larry Blasius; Tim Spengler, chief activation officer at Initiative; and Spengler’s UM counterpart, Donna Wolfe, among others. At the end of the day, Spengler said, deals got done at the desired prices. “It was always the Magna Council that that handled the final rate negotiations,” he said. “The leverage came from the insight, a good snapshot of the market.”

Going forward, said Spengler, Initiative and UM will jointly determine how to make Magna’s mission “broader in scope and a more robust offering for IPG clients. We’ll address issues like new ways of trading, how best to work with emerging media platforms like Google and how to apply the Magna model to print or cross-platforms and not just national TV.”

Gerzema said that other key executives at Magna would work more closely with their counterparts at UM and Initiative than in the past. For example, she said Steve Sternberg, evp, audience analysis at Magna, would collaborate with Graeme Hutton, svp, director of consumer insights at UM. At Initiative, Sternberg would work with Janice Finkel-Greene, evp, futures and technology, and John Mossawir, svp, consumer insight.

Gerzema also said that Magna’s content unit, Los Angeles-based Magna Entertainment, headed by former BBC executive Bill Hilary, will be looked at closely as part of the makeover, as both shops want to better utilize that asset going forward. “There is a lot of untapped and unexploited value at Magna Entertainment,” said Gerzema. “We need to be a little smarter and more proactive in terms of tapping into [Hilary’s group]. With content development, timing is everything.”