Touts A New Agency Business Model For A New Era
CHICAGO–Facing his impending retirement as chief executive officer of True North Communications, Bruce Mason says he has accomplished what he wanted to do. Those goals, he said, included more than the acquisition of Bozell, Jacobs, Kenyon & Eckhardt and extrication from what he termed the “dysfunctional partnership” with Publicis.
The legacy Mason leaves to whomever TN’s board of directors names to succeed him is a plan to redefine how a global advertising agency is structured.
His successor will inherit a global operation, but one that remains outsized and outmuscled. The BJK&E deal and the addition of Bozell Worldwide, Temerlin McClain and other holdings moved TN up two notches to the No. 6 ranking among global agency holding companies. But TN’s 1997 revenues of $1.2 billion were still less than one-third the total of any of the top three: Omnicom Group, WPP Group and the Interpublic Group of Cos.
The challenge will be to keep TN from falling farther behind, and Mason believes its best chance lies in adopting a technology-based “breakaway business model.”
“You have to be big [to compete globally], and we are, but big’s not going to be enough,” Mason said. “In this business, as it’s developing, you have to have a competitive point of difference, and big isn’t it.
I think we understand that to be just like IPG or Omnicom is not going to be enough for us. … We needed to establish a competitive point of difference rooted in technology.”
In the works, Mason said, is a “new and different kind of business model” for Foote, Cone & Belding and Bozell, replacing “the old model, where a full-service flag is planted everywhere an agency services a client.”
That structure, which he said will likely be rolled out within the next two years, “will have very much to do with technology, very much to do with electronic commerce and database marketing.”
Given too little attention when TN’s holding company structure was put in place in 1995, Mason said, was its TN Technologies unit, which he said was pioneering digital media applications. TN acquired a majority stake in interactive agency Modem Media, which last year was combined with Bozell’s Poppe Tyson unit as Modem Media.
“We were ahead in investing in [interactive media], and I think we have capabilities in that area that maybe some of the other holding companies don’t,” Mason said. “That was the mission.”
While declining to offer a detailed discussion of the planned model, Mason said it would allow TN’s global agency brands to “manage the relationships of global clients anywhere in the world from any venue and do it with real-time data.”
TN is working against a ticking clock in its drive to assert its position as a global agency force, Mason said. “I believe what’s going to emerge in the next two to three years is an oligopoly of six to eight holding companies, publicly held, that are going to be the majority owners of all the global agency brands and of the key players in the other disciplines [such as interactive, direct marketing and public relations]. It’s inexorable,” he said.
That consolidation is already taking place, of course, which is why TN moved quickly in the past two years to shed its ties to Publicis, join with BJK&E and make acquisitions such as the 1997 buyout of the Wilkens International European agency network, Mason said.
Mason’s successor, whose job it will be to secure a place in that oligopoly, was not named last week. The widespread expectation has been that the chairmanship will next go to Chuck Peebler, who moved from the position of BJK&E chief executive officer to president of TN and chairman and chief executive of TN’s Diversified Companies division. FCB chairman and chief executive Brendan Ryan may have the strongest position on the FCB side of the holding company.
Executives outside TN’s ranks are being considered, too, which Mason said is “something the board has an obligation to do, so when they pick a successor, they’re confident they’ve picked the right candidate.”
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