Mending MediaCom

October 10, 2010 was huge for The Hub. It was launch day for the new children’s cable network, owned jointly by Hasbro and Discovery.

Shortly before the big debut, Brooke Goldstein, head of ad sales at The Hub, arranged for a meeting at the net’s media agency, MediaCom in New York, to go over the marketing strategy, which included spending nearly $20 million on ads to get the word out. The Hub’s CEO Margaret Loesch and top executives attended and agency brass, including chief operating officer Euan Jarvie, were expected to be there. But Jarvie, citing a problem with another client, was a no show and The Hub execs were left with several mid-level buyers and planners to discuss strategy.

“They definitely weren’t feeling the love,” said a source familiar with The Hub team’s demeanor after the meeting.

In the annals of agency flubs, that missed meeting surely wasn’t an end-of-days screw up.
But for an agency that has been in an 18-month tailspin—starting with the June 2009 loss of prestige client LVMH, which was spending nearly $200 million annually on ads, and capped by last month’s departure of pharma giant GlaxoSmithKline, which spends $700 million per year—it wasn’t the most politic move either. Especially considering how important The Hub lunch was to parent Hasbro, one of the agency’s key remaining clients. And Hasbro (and its network) could be next out the door: In December, the toymaker and The Hub put MediaCom on notice that their accounts were going into review.

Asked about the incident, Goldstein at The Hub declined comment. A day later, however, after conferring with MediaCom, she called back to stress that Jarvie had met with The Hub team in follow-up meetings. That said, executives at both MediaCom and its oversight arm GroupM acknowledge that the agency has big problems, not the least of which is client maintenance. But they say they are on the case.

The first step came last week, with the replacement of MediaCom North America CEO Doug Checkeris with agency vet Harvey Goldhersz, who will remain the shop’s global COO. And MediaCom global chief Stephen Allan said structural changes would be made at the agency, including the addition of a U.S. CEO to take some pressure off of Goldhersz.

Allan said another issue in North America is a lack of consistency. And one of Goldhersz’ strengths, he added, is a keen ability to recognize outstanding work and the talent required to do it. He cited Dell and Procter & Gamble—two clients Goldhersz has led at the agency—as examples.

Rob Norman, the North American CEO at GroupM, who is working with Allan to sort out MediaCom’s problems, added that MediaCom account teams had “misread some signals” from clients. “There’s no question that if our people had been 10 percent better and 10 percent smarter [on GSK] our chances of retaining them would have gone up.”

On the flip side, Norman insisted the shop is not a complete disaster: It did manage to win both Revlon and Travelers this year. “What we need to do is get our heads out of the pressure, look at the accounts where we’ve done some exceptional work and find out how to get more of that standard to more clients more of the time,” he said.