NEW YORK Fresh off the biggest win in its short history here, communications planning specialist Naked is eyeing a major U.S. expansion for 2008. It intends to open offices in Los Angeles and Chicago to complement its New York outpost, another sign that communications planning is gaining favor here after catching on in Europe a decade ago.
Naked U.S. is an affiliate of the London-based Naked, founded in 2000 and credited as a pioneer within the communications planning discipline. As part of its U.S. expansion, John Harlow, one of the shop's London-based global partners, is relocating to the U.S. (Harlow also happens to be engaged to M.T. Carney, one of the founders of the U.S. operation. They plan to marry at year's end.)
Since opening its doors 20 months ago, the New York shop has grown from its three founders—Carney, Paul Woolmington, who previously ran Media Kitchen, and Neal Davies—to 40 employees. More than a dozen are now dedicated to the Johnson & Johnson communications planning assignment that the shop was awarded last month. That business covers close to a dozen major J&J brands that spend an estimated $500 million in measured media annually, sources said. Neither J&J nor Naked would confirm those figures.
Sources said Naked was awarded the majority of the U.S. communications planning business that J&J assigned following its global media review, including work for Neutrogena, Aveeno, Listerine and its Acuvue brand, among others. J&J took the unusual step of breaking out communications planning as a separate review from a simultaneous $3 billion global media contest. Interpublic Group's Sandbox and WPP's Young & Rubicam were awarded smaller pieces of the client's U.S. communications planning business.
Asked at the time why Naked, a relatively small shop, was awarded such a huge piece of business, J&J CMO and worldwide vp Kimberly Kadlec, declining to confirm specifics, said, "It was based on their track record over the past year," working on several brands at the company on a project basis, including contact lens marketer Visticon and feminine hygiene products OB and CareFree.
Kadlec and Carney have known each other since 2002, when they both worked as senior planners at IPG's Universal McCann.
Carney confirmed that J&J is by far the shop's biggest win yet. And the agency celebrated with gusto: "We sang We Are the Champions by Queen loudly and repeatedly whilst inhaling vats of Champagne," Carney recalled. "Neal [Davies] and I danced on the boardroom table and everyone [at the agency] got money. It was brilliant, I still have a hangover."
Hungover or not, Carney and Naked have a lot of work ahead of them. They claim to have just won another large piece of business and will be adding 10 planning specialists in the next month.
Unlike most startups, the shop earned "well over" $1 million in profits its first year in operation, according to Carney, and is on track to earn more than double that in year two. She predicted the U.S. shop's revenue would surpass $10 million this year.
In addition to J&J, clients include Coke, Nike, American Express, Coty and Lugz. The shop tends to carry two dozen or so projects at any given time, said Carney.
Marco Rimini, worldwide head of communications planning at WPP's MindShare, credited Naked with "raising the importance of strategic thinking within the channel space."
Carney said her team challenges conventional notions about why and how customers use products, and that it's critical for clients to have up-to-the-minute insights about a brand's core target—such as how they think about themselves, interact with peers and use media. In today's world, insights become outdated quickly, she said.
Part of Naked's advantage, she added, was that big agencies owned by publicly traded holding companies can't be completely neutral when drawing up communications plans because they are biased by definition. "Their primary objective is shareholder value, and therefore they have to funnel client resources to communications channels they can charge for. Nothing forces objectivity out of an argument like pounds, shillings and pence, as we say in the U.K.," said Carney, a native of Scotland.
Not surprisingly, Carney's view was vigorously disputed by holding company executives. "What disingenuous tripe," said one.
Rimini pointed out that the whole premise behind WPP is to offer clients one-stop shopping for most if not all communications outlets. "There are precious few things we couldn't help clients execute if they chose to do it through us," said Rimini.
David Verklin, CEO of Carat Americas, noted that his shop handles communications planning chores for Procter & Gamble while Publicis Groupe's Starcom handles its buying and other implementation duties. Biased plans would be "suicidal," said Verklin. "If they don't work, you lose the client."
Regardless of which model holds the advantage, the ascendency of communications planning in the U.S. continues. SABMiller just two weeks ago selected WPP's Mediaedge:cia to advise it on such issues. With growing interest in the practice on the part of clients, it's likely there will be plenty of business to go around for big and small shops alike, said Verklin. "J&J didn't choose Naked to avoid bias," he said. "They chose Naked because Naked is really smart. "