In early 2006, the Campbell Soup Co. approached Mediaedge:cia—its U.S. agency—with an unusual but welcome request. The company was considering consolidating its global media planning and buying account. But instead of throwing the account into review and having its roster agencies compete for the business, Campbell asked MEC to draft a plan illustrating how it would manage the business if it were handed to the WPP shop.
The stakes were high. MEC had a chance to double its business with Campbell, which spends an estimated $400 million a year on ads globally and has significant increases planned. But if the shop blew its private presentation, the account would likely go into review. That would have put an estimated $10 million in revenue in jeopardy. In April, MEC presented to client executives at their Camden, N.J. headquarters, and one month later the client informed MEC that it won the global account without a review.
Campbell had worked with other top-tier media shops, including OMD and Carat, but Paul Alexander, vp, global advertising at Campbell, said MEC's impressive work in the U.S. afforded it the first, and only, shot.
And "when MEC shared their thinking on how they would manage the business globally coupled with their U.S. results, we felt confident enough to move forward quickly versus looking at a variety of agencies and options," said Alexander.
Campbell was one of three major clients that consolidated all of its global business with MEC in 2006. The others were Colgate-Palmolive (with an annual worldwide ad budget of $600 million), and Ikea (which spends some $350 million). MEC already had handled most of Colgate's business with the exception of the increasingly important China market, where a $50 million account is considered a massive piece of business. Colgate spends an estimated $165 million there annually, and MEC was awarded media planning and buying duties on the account last July after a review that pitted MEC against the incumbent, Interpublic Group's Universal McCann.
With Ikea, the only major market not handled by MEC was the U.S., where the client spends $85 million in ads annually. The company gave MEC the business last July without a review. Another account MEC reeled in without a lengthy and expensive review was DreamWorks. MEC client Paramount acquired the studio and promptly awarded its $270 million account to the media shop.
For MEC, the success it had wresting control of several key global accounts was evidence that its emphasis on consumers with a strategy it calls "active engagement" was effective, said Charles Courtier, worldwide CEO of MEC. "It says a lot about us as an agency and our relationship with our clients and the work we're doing for them," he said. "You don't grow with a client unless you're doing great work for them and genuinely helping them to grow as well."
Specifically, active engagement refers to MEC's proprietary approach to communication planning, coupled with strong media planning and buying basics and a growing arsenal of diversified services.
Along with Courtier, the British-born executive who has run the shop since its inception, it was Andrew McLean who was charged with convincing major marketers to buy into the new approach and to tailor it to individual client needs.
McLean, who was promoted last year to president, global clients and business development, said that a key MEC strategy has been to "increase the footprint of existing clients." And that strategy paid off handsomely in 2006 as MEC's organic revenue growth topped 16 percent.
That said, wins from existing clients, while significant, are just a part of MEC's success story. The agency also had a string of account wins from new clients including Telecom Italia across Italy, Germany and France ($320 million); Monster.com across Europe, the Middle East and Africa ($120 million); and Red Bull in Mexico ($20 million). Equally noteworthy, MEC didn't let a single significant client get away in 2006.
In the agency business, stability and growth is a formidable combination and one that MEC amply demonstrated in 2006.
For its success in winning major global consolidations while persuading new clients to join the fold, at the same time improving upon and expanding its already strong and diversified offering, Mediaedge:cia has been named Adweek's 2006 Global Media Agency of the Year.
According to Paris-based Recma, MEC was the most competitive global media network by a wide margin, based on a formula that calculates account wins and losses as well as increased spending and new assignments from existing clients.
Indeed, the agency took in an impressive $1.5 billion in new business in 2006, boosting the agency's total billings for the year to almost $19 billion per Recma. Overall, MEC's worldwide revenue grew 15 percent to $565 million.
In a November 2006 report on media agencies, Recma said that MEC was "the only true global network" to improve its competitiveness over the last three years, "taking a clear leadership position in 2006."
The agency even managed to bolster its already strong diversified offerings by adding three key elements in 2006, including the start-up of MEC Retail, which is a unit designed to develop a greater understanding of the retail environment as a communication channel. It also started MEC Bravo to bring communications planning, ROI analytics and other key planning tools to the burgeoning U.S. Hispanic market and ramped up its branded entertainment efforts with the development of MEC Entertainment.
MEC Retail is particularly critical, said Courtier, as some 80 percent of its clients market products through retail outlets. "If we need to be channel neutral, the most powerful channel of communications is the retail channel," said the 45-year-old CEO. "The industry doesn't know enough about this area and we are intent on addressing it. It's going to play a hugely important role going forward."
Internationally, China and Europe were particularly strong markets for MEC in 2006. The Colgate win in China was "life-changing" for the agency, said Courtier, given the market's "strategic importance for the future and as a driver of growth both for our client's business as well as our own."
Overseeing China is Shanghai-based Bertilla Teo, who last year was promoted to CEO of MEC North Asia. As in other parts of the world, media offerings in China are increasingly being shaped by changing consumer behavior, said Teo. "For Colgate we didn't just go with a conventional media approach," she said. "It was all about understanding how their consumers behave in China."
As marketers try to keep pace with changing consumer habits there they require more integrated media approaches. Case in point: When Wrigley wanted to tap into a major government initiative encouraging the general public to mind their manners, MEC came up with a reality TV program that would provide contestants with advice for manner makeovers. Experts on the show included a psychologist, personal groomer, speech therapist and hair stylist. In the program, when each contestant is asked, "Are you ready," they respond by popping a piece a gum into their mouth to indicate that they are ready for their makeover. The TV show for Wrigley (which last year awarded its $60 million Chinese market account to MEC there) is tied to Webisodes, an 800 call-in number for etiquette tips and a mobile link where viewers can vote for their favorite contestant by phone.
In Europe, the biggest win was the $320 million Telecom Italia account. Before selecting MEC back in January 2006, the Italian phone company bought and planned its media in-house, said Mel Varley, who was appointed CEO for the shop's Europe, Middle East and Africa shortly after the win. "They decided they wanted to be more competitive in the fast-changing media world," Varley said of the client. And that meant not just better pricing but better resources to understand more fully how customers are consuming media.
At Monster.com, the client was looking to consolidate across the EMEA region with a review that included OMD, Starcom, Carat and MPG. The key to winning the Monster account said Varley, "was our strength in interaction," referring to the agency's combined digital and direct offering, MEC Interaction. More generally, she said, MEC has demonstrated an ability to integrate plans across traditional and emerging media and consistently across markets.
In Latin America, MEC last year promoted Michael Jones to CEO of the region with a mandate to boost business and to persuade new and existing clients to utilize more of MEC's diversified services.
"The region is increasingly important," said Jones. Part of the challenge, he said, is to strengthen the connection between the region and the rest of the global network: "We're changing the way we work with our clients." The goal is get them to be more consumer-focused and more broadly adapt communications planning, analytics and other offerings. "It's a very traditional TV dominated region," Jones added, "more so than anywhere else in the world," even though consumer media usage habits are changing as they are elsewhere.
Looking ahead, Courtier said the key to MEC's future success would lie in its ability to accurately forecast emerging client needs and to meet those needs with expanded capabilities. Equally important, the agency must maintain a high level of consistency, which he said is "the single biggest challenge for any global agency network."