ICG Founders Start Over With Modest Plans

Convinced that media buying has become too top heavy at big agencies, two veteran executives who helped build one of those mega-shops are trying to elbow their way back into the field with a more modest business model.

Bruce Milner and Andrew Butcher, former co-chairmen of Carat USA whose noncompete agreements with that shop expired in November, have opened Milner Butcher Media Group, here, with the hope of corralling small to midsize clients.

“We have no intention of competing head-on with the big players,” said Milner, a native of New Zealand who once worked for J. Walter Thompson’s office there. “We don’t want offices all over the place staffed by hundreds of people. That can be a nightmare.”

The four-person shop has already been assigned $3-5 million in buying responsibilities for a regional group of Chevys restaurants by Hawk Media, a San Francisco-based media-auditing firm.

Milner, 54, and Butcher, 56, said their plan is to build $10-20 million in billings this year and $50-70 million within three years. Milner said that staff additions would be limited to “the most senior, highly paid people in the [media] business.” He said the shop’s success will rest with its ability to negotiate favorable terms for smaller clients using a small but experienced staff who will disclose all terms and pricing information to its clients.

Butcher, a native of England, said the success of Carat and other major media agencies has left a void in the market.

“There is a tremendous need for an agency to handle the smaller media accounts,” Butcher said. “We have been at Carat and we have the highest regard for them and the job they do for their clients. But there are many clients who could benefit from the services of a smaller agency.”

Milner and Butcher met in 1975 and formed the media agency International Communications Group in 1979. The Los Angeles shop, which handled accounts such as Jack in the Box, Ditech.com and Pennzoil, grew to become one of the top media shops in the region.

When Milner and Butcher sold the $450 million agency to Carat in 1997, the deal helped Carat become one of the top media players. Carat’s eight offices and more than 700 employees in the U.S. now handle media spending in excess of $2.1 billion.

The president of Hawk Media, Ken Slater, said he hired MBMG expecting to save his client money. “You don’t want to work with [a media buying agency] that just takes orders,” he said. “You want someone who can negotiate for your clients, but negotiation takes time and experience.”

Slater added that MBMG’s willingness to disclose the complete terms of the deals it makes is a welcome development. “A large part of the process is the evaluation of how a budget is being spent and how well the agency performed for the client. I think these two fellows have the right idea.”

Milner, who noted that the co-chair title at Carat was “more ceremonial than hands-on,” said that when the noncompete clause with Carat expired, he and Butcher did not hesitate to plant their flag on a landscape dominated by giants.

“We have been champing at the bit, and it took awhile for us to extricate our self from the Carat situation. The market conditions are good if you are offering media value,” he said.