MindShare: New Business Catapults WPP Shop to Top

In January 2006, morale at MindShare was dangerously low. The WPP media agency was still smarting from Procter & Gamble’s devastating decision three months earlier to yank its Gillette business. Ad spend on the account was $800 million worldwide, with $560 million of it placed in North America. As MindShare was also the media agency for competitor Unilever, its executives realized it would be difficult if not impossible to retain the men’s grooming business after its October 2005 acquisition by P&G. Still, an account loss of that size—it generated some $20 million in revenue in the U.S. alone—is always painful.

And more painful moments appeared to be in the offing. MindShare had been put on notice that it would ring in 2006 by engaging in a shootout for the consolidated Sprint Wireless and Nextel U.S. media business, which combined spent some $920 million, according to TNS Media Intelligence. MindShare had handled Nextel, which in August 2005 was acquired by Sprint. The latter was by far the bigger spender, by a ratio of almost 3-to-1, and MindShare would go up against Publicis’ Starcom, a formidable rival that handled Sprint’s media chores.

As the agency for the company that had been acquired, the odds were stacked against MindShare, suggesting that another chunk of revenue could soon be headed out the door.

But things turned around fast. Sprint launched two separate reviews, one for traditional media and one for digital, the latter with estimated spending of $25 million. Both were launched at the start of January and the digital review was decided by the end of that month.

The victor was MindShare Interaction in New York, a new entity that only opened its doors Jan. 1. Sprint was the digital shop’s first big win, beating out Organic—the Nextel incumbent—and Starcom. Things were looking up.

About five weeks later in early March, Sprint awarded its consolidated media account to MindShare’s New York office. In between the two Sprint wins, there was other good news: In February, MindShare’s Chicago office reeled in the $200 million Wrigley’s account following a review. That was the first big win for Scott Neslund, who was hired in 2005 to run the Chicago office and charged with attracting new clients and boosting revenues at the Midwest outpost. His efforts were rewarded handsomely two weeks ago when he was promoted to president and CEO of MindShare North America.

“Coming off the loss of Gillette, the Sprint and Wrigley wins in combination were incredibly rewarding both from a psychological perspective as well as for the financial implications for the company,” said Marc Goldstein, who ran MindShare North America as president and CEO before being promoted two weeks ago to CEO of North America for MindShare parent GroupM, the WPP division that oversees the holding company’s media assets. “It really was satisfying on multiple levels.”

Additional wins followed, including Kmart ($200 million), which acquired MindShare client Sears and then decided to consolidate its media account with the agency without a review in April.

All told, MindShare raked in $1.3 billion in new business in 2006, the best record among U.S. shops. That, combined with solid growth from existing clients, gave the agency an 11 percent revenue gain to an estimated $295 million. Equally impressive is MindShare’s retention rate: the agency only experienced one small loss: the $30 million Delta account.

One key driver of organic growth last year was the expansion of the shop’s communications planning practice, now “fully embraced” by one-third of MindShare’s client roster, said Ernie Simon, president of strategic planning at the shop.

The 7-year-old agency also ratcheted up its offering in the branded-entertainment space under David Lang, director of programming, MindShare Entertainment, whose team created one of the most talked about projects in the sector last year: a Webisode sitcom series called “Calming Nights” with Felicity Huffman that helped launch line extensions for Unilever’s Dove brand.

For its new business acumen, double-digit revenue growth, achievements in branded entertainment and efforts to expand both its communications planning and digital practices, MindShare has been named Adweek’s 2006 U.S. Media Agency of the Year.

And it was the Sprint win that set the tone for the record year that was to come.

Initially, the telecom giant was looking to conduct a review to cut costs when it started to reassess its media planning and buying practices, said Anita Newton, vp of marketing, Sprint. As she delved deeper into the process, her priorities changed. “After we got into it, it became much more about the strategic ideas, which are a lot more valuable than any savings we could have derived from the monthly retainer,” she said.

“We were not unhappy with our incumbent agency,” Newton said of Starcom. “But MindShare not only brought strategic thinking, they understood our business objectives and were able to translate that into real media value at a level that was greater than what we were getting. We didn’t know that we weren’t getting good things.”

Simon recalls the pitch: “We told them they were in third place [behind Cingular and Verizon], being massively outspent and needed to find ways to fill that gap and make their dollars stretch further.” The wireless marketing battle, particularly as it is waged on TV, is a fierce one, Simon said. And in some cases, he argued, Sprint was “pouring money down the drain” by buying ads on shows such as American Idol or Law and Order, where competitors were spending more or had unique sponsorships in place. “The solution was to find places that they could own,” he said.

Sprint took that advice. The agency and client created integrated mobile sponsorships linked with programs such as The Amazing Race on CBS, Deal or No Deal on NBC and 24 on Fox. With 24, MindShare cut a deal with the net to have an original preview of the following week’s episode available via Sprint phones every Tuesday. Also, Sprint phones are prominently featured in the broadcast program, complete with “call-outs,” verbal cues leading into commercials that remind viewers they’ve just seen a Sprint mobile application at work and where to go for more information on it.

“One of the things we pitched during the process was to take what had been working for the client and start applying them to different areas,” said Jason Maltby, president, co-executive director, national broadcast at MindShare. The standout case study was the Nextel Cup, a series of Nascar races that the telecom company has been sponsoring since 2004. The sponsorship integrates broadcast commercials with ancillary content on the Web and mobile, where consumers can get more information about the racing circuit and see interviews with drivers and commentators.

“When you come away from the race, nobody has any doubt who the sponsor is, which is an achievement in and of itself, given how many years Winston [cigarettes] was associated with the sponsorship previously,” said Maltby. “Our goal was to bring that ownership feel to other programs.”

For the client and agency, the Sprint work has reinforced the importance of integrating digital and traditional media platforms. Margaret Clerkin, managing director, MindShare Interaction, notes that the digital team has a seat at the table during every MindShare pitch whether digital is up for grabs or not, to reinforce the idea of “fully integrated 360-degree offerings.”

In the case of Sprint, it didn’t hurt the traditional media team’s presentation to have MindShare Interaction pitch separately and win first. It may have even helped. “It’s all about an integrated strategy and it just makes it a lot easier to get stuff done,” says Sprint’s Newton.

The pitch for Wrigley was less about media basics and more about understanding the different brand personalities and how to best reach their core consumers, said Neslund, who oversaw the pitch. “We anticipated that the pitch would come down to strategic planning skills,” he said, “and we conducted a lot of proprietary research” for the three brands the agency was charged with writing plans for in its presentation.

One of those brands was Altoids, a breath mint whose core consumer base tends to skew young and think of themselves as somewhat iconoclastic. “The client had been using a lot of traditional TV and print, and we took a step back and said that digital media needs to be at the core of this plan and here’s why,” Neslund explained.

Paul Chibe, vp, U.S. marketing for the client, said, “Since they assumed the business in early 2006, they’ve demonstrated an insightful, disciplined and integrated approach to our media planning and execution.” MindShare, he said, came out on top in all the key metrics that Wrigley cares about, including “people, tools, value, process and experience.”