The appointment of Mary Gerzema to president, U.S. operations for Interpublic Group's Universal McCann is the first step in a reorganization designed to help the agency rebound from two tough years of client defections and a 2005 billings decline.
Gerzema, who assumed her new position on Feb. 6 after a three-year stint at UM's New York office, said to look for reshuffling of duties and important new appointments in the coming weeks. She will also take steps to improve the agency's analytics capabilities, as well as its communications-planning practice and work with emerging technologies.
Another key priority: keeping the relationship with McCann Worldgroup productive following UM's split from the group's corporate structure and the establishment of its own financial P&L at the beginning of the year. "The relationship with Worldgroup is a huge key to our success," she said. But the separate P&L, combined with the creation of holding company IPG Media, will enable UM to more rapidly develop "the talent, tools and resources that are warranted to compete."
The soon-to-be-announced appointments at UM "will involve some restructuring in the areas of operations and business development and key product disciplines," said Gerzema. She declined to elaborate further, citing the need to finalize plans.
Gerzema is filling a new post at UM, a move that was applauded by insiders as long overdue. With Gerzema overseeing U.S. operations, worldwide CEO Nick Brien, to whom Gerzema reports, will have more time to manage the agency's global network, sources said. Brien took the reins last October, filling a post that had been vacant for six months.
Brien's predecessor, Robin Kent, who oversaw both the U.S. and worldwide operations, was forced out in March 2005. "Robin insisted on running both parts himself and was stretched too thin," said one insider. In the interim, IPG created IPG Media to manage its media operations, which include UM and Initiative and negotiating arm Magna Global. Former MTV COO Mark Rosenthal was hired to run IPG Media as CEO last June.
Account losses hurt UM's performance last year. RECMA estimates that UM's U.S. billings were down 9 percent in 2005 to about $6 billion. Contributing to the drop was the December 2004 loss of the $550 million Nestlé account, the full effects of which weren't felt until last year. Adding to the downturn: General Motors' May 2005 decision to take its buying account away from IPG, including roughly $600 million in local buying activity that was handled by UM's LCI unit.
Gerzema, 42, describes 2005 as a "hunker-down" year at the agency. Throughout the year, the focus was "control what you can, and don't waste time on things out of your control," she said. "Keep the business running and continue to produce a good product for our clients, while everyone knew we were searching for new leadership."
And last year saw two bright spots: The agency won the U.S. Army account in a joint pitch with Worldgroup and other IPG agencies in December. Annual billings are estimated at $200 million. In another joint pitch with Worldgroup earlier in 2005, it won the $300 million global Intel account.
High on the list this year is building a "robust capability" in the communications channel planning area, said Gerzema. Last month, Brien hired Wayne Fletcher away from Carat to serve as UM's global head of communications planning, based in London. Gerzema will work with him to develop the practice for the U.S. Specialists in communications planning "have the ability to turn data into insights that inspire an experience plan versus a media plan," she said.
Analytics, particularly for emerging media, is another key area of focus for the agency, said Gerzema. But developing such systems, designed to measure the results of ad spending, isn't cheap. The goal is to get clients across the agency roster to invest more in the development of such processes.
"One of the biggest barriers to clients getting involved in emerging media are unanswered questions like, 'Does it work? How much does it work?'" said Gerzema. "And perhaps most important, 'Where do I take from my existing budget, because there are no incremental dollars to invest in emerging technologies?'"
Gerzema, who joined UM's New York office in 2003 as group director, became evp, communications planning director in 2004. She was media director and general manager at Fallon New York from 1998 to 2003. Prior to joining UM, she spent eight years at Fallon's Minneapolis headquarters as a media strategist.
Gerzema started her career at Campbell Mithun in Minneapolis, where she met her husband, John Gerzema, chief insights officer at WPP's Young & Rubicam Brands. They both left Campbell Mithun to join Fallon before moving to New York, where they live with their 3-year-old daughter.
Time spent outside the office is pretty much all family time, said Gerzema, but shop talk is off the table at home. "Now it has to be. When we were both at Fallon, we could commiserate." But she credits her years at Fallon with instilling in her the kind of "media-agnostic thinking and strategic rigor" essential to success in today's media agency environment. "The ability to work productively and collaboratively with creative, account planning, interactive teams and so on are all things I appreciate and have been able to put into practice both at Fallon and now at UM."
Collegues describe her as very focused, and her style as collaborative. She's also described as a"great contributor" who gives clients honest feedback. "She doesn't just sit back and let them run all over her," says one co-worker.
Asked to cite the agency's biggest weakness, Gerzema replied, "Our positioning hasn't been clear, and I think we've been underresourced." But that's changing with the new P&L structure and additional support that is coming from IPG Media.
And the biggest strength? "Our clients are our No. 1 strength right now, and the base of people [at the agency] we have is terrific," she said. "We just need to build around that base."