Media Merry-Go-Round: Behind the CEO Shuffles

NEW YORK It’s nothing new to see agency CEOs coming and going each year. But in 2007, most of the activity came on the media agency side, while nearly all of the top 15 traditional ad networks stuck with their CEOs.

Seven of the 14 top media networks appointed new U.S., North American or worldwide CEOs this year (compared with three in 2006). In contrast, only two of the top 15 ad agencies in 2007 made changes at the top (compared with four last year).

The hyperactive media shuffle, according to agency execs and consultants, was spurred not only by organizational imperatives and the dynamic nature of the media landscape but, at least according to one exec, sheer ambition.

“The media business, in my view, has a lot of differences from its creative counterparts relative to why people like being at an agency,” said Brian Brooks, a recruiting consultant who works for agencies including Interpublic Group, and a former chief human resources officer at WPP. “It’s got a whole lot less to do with the emotional aspects of being part of a team of people you love and [is] more about cold, hard, calculating career ambition. People are more susceptible to making a move just because it’s a good career step, rather than saying, ‘Oh, you know, I’m in love with my partners and I could never leave them.'”

Because holding companies own multiple media brands, the creation of mini-media holding companies like WPP media arm GroupM offers another layer of top management. On the creative agency side, for the most part, such structures don’t exist.

And the changing media landscape is forcing media shops to constantly reinvent planning and buying techniques, providing executives with more opportunities.

“The scope of what media agencies are doing has accelerated the need for new skill sets and capabilities,” said Rishad Tobaccowala, chief innovation officer, Publicis Groupe Media and CEO of PGM unit Denuo. “Media companies are growing more dramatically than they ever have and, in some cases, new kinds of talent are needed in the C-suite.”

Added another senior-level agency manager: “The leadership at the media shops has always been driven by practitioners” who must constantly hone their skills, while “creative shops tend to be led by account people, who don’t necessarily have a lot to do with the creation of product.”

This, however, is beginning to change. Creative shops also are now adapting to the fluid landscape. Young & Rubicam, for example, “needs to become more digital,” said Hamish McLennan, the agency’s worldwide CEO.

The WPP network has been searching for a North American CEO since the abrupt exit of Chris Jaques last January. To many, it’s puzzling the search has taken so long. McLennan insists that “interest [in the spot] is not the issue. It’s just selecting the right person.”

New York-based consultant Joanne Davis said, “You could argue that there have been changes” at some creative shops below the U.S. level. She referenced Y&R and Ogilvy & Mather, where Carla Hendra was tapped to jointly run the New York office with Chris Wall in September. “That’s a huge office,” she said, with IBM, American Express and other big clients critical to the agency’s performance.

At the end of the day, said McLennan, it’s all “cyclical. But a lot of businesses in our industry are looking at how they refine and change their models. … If you look at how the media companies have changed … it’s just a very fluid and competitive industry.”

What’s more, noted Brooks, media agencies have expanded horizontally into areas like branded entertainment. As a result, “people inside media are getting opportunities to do things that are tangential, but related to their core business—more opportunities, frankly, than people in creative agencies are getting,” he said.

A case in point, said Brooks, was Steve Grubbs’ shift from the North American CEO slot at PHD in March to head a newly formed Omnicom Media Group sports marketing and entertainment division. Grubbs was replaced at PHD by Matt Seiler, who had been president of PHD USA.

In addition, top media agency executives have options on the media owner side, such as Joe Uva’s move to Univision, said search consultant Davis. Uva had been worldwide CEO of Omnicom’s OMD before making the move to Univision in February. (Omnicom Media Group CEO Daryl Simm is now doing double duty.) “He has experience in so many different sectors of the business. He proved he could run Turner, then OMD and then get scooped up by some other big organization because there are always many suitors for the handful of great talent,” said Davis.

All the change on the media agency side might suggest on its face significant turmoil, with shops making switches to improve performance. Arguably, that was the case with WPP’s MediaCom, which had been struggling for a couple of years and, in August, brought in its top Canadian executive, Doug Checkeris, to replace Dene Callas as U.S. CEO. Callas was shifted to the newly minted post of global director of creative.

And certainly Carat had its ups and downs leading up to the July decision to merge its digital and traditional media shops. In late 2006, it lost Pfizer, which was bought by Johnson & Johnson, and then won and lost Wal-Mart after the marketer’s well-publicized pitch re-do. Although Carat America’s CEO David Verklin went out of his way at the time to praise the leadership of Carat USA president Ray Warren, he was the odd man out after digital head Sarah Fay was appointed U.S. CEO to oversee the merged entity.

But in every case where a switch was made, the media agency CEOs were promoted from within their shops, and in several instances they replaced people on their way up the ladder.

The change at WPP’s MindShare illustrates the point: In February the shop promoted Scott Neslund to North American CEO, replacing Marc Goldstein, who moved up to the new post of North American CEO of GroupM. And Bill Tucker was promoted to CEO of MediaVest USA in May, replacing Laura Desmond, who earlier was elevated to CEO, Starcom Media-Vest Group. At WPP’s MEC, Lee Doyle was promoted to North American CEO in March, freeing up worldwide CEO Charles Courtier to focus more on his global duties.