Media Agengy Report: Q&A - MindShare's Irwin Gotlieb

Irwin Gotlieb has spent almost 30 years in media, a consummate deal maker and savvy insider almost from the beginning. His resume has always been impressive, but in the '90s, it took on a sense of historic importance. In 1993, the soft-spoken, elegant 50-year-old founded TeleVest, D'Arcy Masius Benton & Bowles unbundled media operation. In 1999, he was the driving force behind the launch of MediaVest Worldwide, combining TeleVest with the media operations of its parent company, the MacManus Group. A little more than six months later, he created a buzz in the industry when he joined WPP Group as chairman/CEO of MindShare Worldwide. One of his first tasks is to combine the media operations of WPP's Ogilvy & Mather and J. Walter Thompson to create the North American version of Mind-Share, the WPP media brand that competes so strongly overseas. But for all the power of his position, Gotlieb is not about brute force. He clearly loves precision. A passion for bike riding and a deep interest in photography point to a fascination with finely tuned constructs. He will need both in great measure to get MindShare up and running in North America. The creation of world-dominating media agency giants has been front-page news of late--but so has their difficulties in establishing a U.S. component. Adweek's media editor, Jack Feuer, recently visited Gotlieb at his office in Ogilvy & Mather's midtown Manhattan building to talk about the dynamics of agency mergers, why MindShare is doing it the right way and how people are sensitive to change. Here's what he had to say: Adweek: Many reasons are given for the new prominence of media agencies. What's your take? Gotlieb: There are a lot of elements in the advertising process that tend to focus more on the quantitative than the analytical, and those are areas that are best suited to the media specialist. That's what we do for a living. Twenty-five years ago, you had [only] three networks in the United States. Twenty-five years ago, just about every other country in the world had government-controlled television media. So your choices were very simple. We had free trade [in America] but few choices to make. Our counterparts around the world had even simpler tasks. They would beg for media and the government would allocate it to them in many cases. Many countries had single channels. As the media landscape has evolved, the complexity of the task has increased to the point where you need people with certain skills. Those skills are also very applicable to all sorts of other processes in the entire chain, [such as] how you maximize return on your advertising investment. Adweek: Did these various factors also contribute to globalization of media functions? Gotlieb: No, there are lots of dynamics that occurred simultaneously that forced these changes. The need for media specialization comes in part from complexity but the move for media globalization comes from a whole other dynamic. We need to globalize because our clients are globalizing and our media partners, the guys we trade with, are globalizing, too. A lot of U.S. global clients are shutting down individual countries' profit-and-loss operations. The guy in France doesn't run France anymore. Adweek: So you had to build these things. Gotlieb: There is a third dynamic. To run a media company, you need research. You need to buy data, you need to have a research kit built, you have to buy tools, you have to have computers, you've got to have multiple skill sets, and those can only be paid for through some level of scale. In terms of best practices, we bring as much stuff from Europe and Asia into the U.S. as we take from the U.S. and ship out. Adweek: One major conceptual difference among the global media models is the system that is buying only, or buying and tactical planning. Then there are the models that incorporate strategic planning as well. Your point of view? Gotlieb: I don't think this is a point of view, I think it is a fact: The market's already made that decision. Full service, fully integrated media organizations are going to dominate the future. I don't see anybody setting up a media specialist firm that is buying only anymore. Adweek: What lessons have you taken away from the examples of other media agencies that have been built before now? Gotlieb: There is some learning you can extract just from common sense, and that is the fewer pieces you are trying to mesh together, the simpler the task. Within the WPP context, we have two primary networks: J. Walter Thompson and Ogilvy & Mather. If we had three agencies, it would be at least 50 percent more complex. The second issue is there are a lot of players out there that tried to do it with pieces they don't own a majority interest in. When you are dealing with an affiliate, you don't have the same degree of control. The third issue is cultural. Ad agencies have broadly divergent cultures. We have more consistent cultures within media organizations because we are quantitative practitioners. We are less into philosophy and more into analytics. We are more about deal making and less about creative discussion. Adweek: But you still have the human issues, do you not? Gotlieb: Yes. That's not culture, that's dealing with people ... the cultures of our two agencies are different, one would expect that. The cultures of their media organizations are not. I have two organizations that know each other very well, that already have become comfortable living with each other and have a pretty smooth communication process. Since I have been here, there have been a number of things that were very easy to do that got done almost immediately, and some of these things weren't even my idea. The J. Walter research organization and the O&M research organization got together and we eliminated that duplication. Why should both do programming? Why should both track ratings? Stuff like that. Let me put it this way: They have been dating for a couple of years. All I have to do is get them married. Adweek: What about the physical reality of making this work? You said you are going to follow the MindShare model overseas, and there will be a distinct U.S. MindShare group, people who are MindShare employees. While some may be housed at one or both of the two shops, there will also be separate MindShare space. Gotlieb: The vast majority of MindShare employees will be housed within MindShare offices. Adweek: What is your time frame to get MindShare up and running here in the U.S.? Gotlieb: Canada is going to be done by February and New York well before the end of [2000]. My problem in New York is that from the time we choose space it will take six months before infrastructure wiring and construction can be done--and that's on an accelerated time frame. Adweek: What have been the biggest issues that the people at either agency have brought up with you? Gotlieb: The core issues relate to people's sensitivity about change in general. I don't want to minimize this. There are many people who find change to be fundamentally troubling and discomforting and those issues have to be addressed with some degree of sensitivity. You can't survive if you preclude change. That doesn't mean everybody is always going to be OK with it. Adweek: What do you see as your big challenges? Gotlieb: I think the primary issues we face are those associated with logistical complexity. We have a lot of business units and an enormous amount of what we have to do here is the financial de-merger of two organizations and then a merger into one. That isn't simple, and it has to be done from an accounting standpoint, a real estate standpoint, a computer system standpoint. Adweek: To what end? What does the media agency of the new century look like? Gotlieb: We are expected to be entrepreneurial in the management of our client's money. We have to be entrepreneurial on our own behalf as well. One of the things in our mission statement deals with how you define what you do, and to what extent you go out on the edge and build skills that go beyond what everybody else is doing. We are on the cusp of changes in the media landscape that are more significant than anything that's happened since the advent of television, maybe including the advent of television. It's the whole issue of convergence, of interactivity being broadened beyond just the computer. It is the requirement that we become accountable on the basis of cost for response, cost per sale. It will completely change the disciplines that we practice, the skill sets that we bring to the client. And it is going to change the economic model on which our business is based. That's what is going to propel a business like MindShare forward, because we are going to be in the middle of all that change.

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Media Agengy Report: Q&A - MindShare's Irwin Gotlieb

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