Q&A: Initiative Media Worldwide’s Alec Gerster

Alec Gerster spent virtually his whole career at Grey Advertising and its successor shops. He started as a media planner in 1972 and became Grey’s media director in 1981. Ten years ago, Gerster was named CEO of Grey’s unbundled media brand, MediaCom, and built it into a global network with $11 billion in billings and more than 60 offices around the world. But last spring, the media man called “as good as there is” by one rival accepted what may be his greatest professional challenge.

In April, Gerster, 54, joined Interpublic Group’s Initiative Media Worldwide as CEO. His mission: to turn around a network that, at $20 billion, was still one of the world’s biggest but was struggling to win new business and had recently lost its two top clients, Unilever and Disney. Adweek spoke with Gerster at Initiative’s Wilshire Boulevard headquarters in Los Angeles about his plans for the shop, the state of the media-agency business in general and Initiative’s prospects for the future. —Interviewed by Jack Feuer

ADWEEK: You’ve been on the job six months and are only now beginning to make moves. Why the wait?
GERSTER: A lot of the fundamentals were pretty solid. It’s also a reflection of the fact that we first applied some changes to [internal] approaches and procedures as opposed to people. When it comes to overall changes, I do think they have to be applied with a certain amount of care and thoughtfulness. Don’t forget, just me being there is a reflection of change in the organization.

ADWEEK: Why make this switch after 30 years at Grey?
GERSTER: I found myself moving further away from the media world in which I grew up, and this was a way to recalibrate back to media, with different challenges.

ADWEEK: It must be quite a transition.
GERSTER: Your immediate reaction is to understand what’s common and what’s different and what the dynamics of the place are. There isn’t too much I haven’t seen. So, in some ways, the issues weren’t surprising. How they get dealt with [were], maybe. You can move the chess pieces globally around a little bit easier here.

ADWEEK: You’re the third leader Initiative has had in four years. What is your prescription for bringing the agency forward?
GERSTER: There is very little here that you would point to as being less than competitive. There are some wonderful assets here, and we may or may not have been very good over time in getting that across publicly or in new business the way we should have. It was a very interesting—at times gratifying—process to see what assets we have, and the immediate reaction is, boy, we should be doing better, we can be doing better and we will be very quickly. We may have needed certain people doing different things, and you’ll see those shifts over the next two or three months, but I’m extremely positive about the ability of this company to go out and get, keep and grow new business.

ADWEEK: What kinds of shifts? Like the recent leadership change in Chicago [where former TN Media executive Fred Wray was tapped to run Initiative’s central region]?
GERSTER: Yes, it’s about taking what I have, which is very good, and making it better. That could mean shifting some folks around, maybe geographically; it’s more who is responsible for what, and do they understand those responsibilities. But it’s not about not having it.

ADWEEK: Getting new business. How do you do that?
GERSTER: In research and technology, we have tremendous capabilities. We probably need to get it better into client context—the “What does it mean for me?” issue. Which is not that difficult. This business is about leveraging a network—technologically, intellectually and financially. They were already doing some of that before I got here. The strategic processes we have coming out of Europe are excellent and relevant to what’s going on here in the United States.

ADWEEK: You have won considerable business this year through sister IPG shops, particularly Foote, Cone & Belding. How do you work with your siblings?
GERSTER: I have to focus on the Initiative brand first. How the holding company thing plays out is less of an immediate concern for me. If I benefit [from being FCB’s buying partner], fine. In between is the relationship with my other IPG partner companies, and we’re putting a lot of effort into that because it is an opportunity for us. Not every client wants to come in through the media-agency door.

ADWEEK: How formal are those partnerships?
GERSTER: It’s relatively formal with Foote, Cone. With Deutsch and Lowe and the others, it’s more what they want to do, and to the extent they want to work with us, we will. It’s up to us to demonstrate to them that we advance their proposition.

ADWEEK: How do you work with IPG’s global negotiating unit, Magna?
GERSTER: This is a structure that has existed in this business for decades, just not in the U.S. It’s as simple as bringing what is a typical and accepted structure outside the U.S. here. IPG may have walked across the street ahead of the others in doing this, but everybody’s pretty much walked across the street as well in putting in place these super negotiating units. The interaction between us is fairly deep in terms of research areas. It’s not just about doing the upfront differently. All of us are looking at what can we do, because of the size of the business we have, that should allow you to do business fundamentally differently. The real elegance of this will be using your size and your predictability of spend to be a catalyst to make things happen, and I think we’re just scratching the surface.

ADWEEK: Do you pitch together?
GERSTER: No, Magna is not a line unit in that regard. Do we use their resources in the pitch? Yes. But we’re the line unit. It’s more that we have this resource that brings better value than a client would find someplace else.

ADWEEK: There’s been quite a bit of talk about the state of new business. How is the climate for media-only accounts?
GERSTER: A lot of the mega-assignments have already gone through the [review] process and, for the time being, are off the table—P&G, Unilever, accounts like that. Interestingly, a lot of those accounts, either formally or informally, have to go through some sort of review process 36 months out or something like that. So if there are situations where there is underperformance or corporations say the structure we put in place may or may not be exactly right, you may see some of these big accounts come back into play in some form or shape, maybe toward the end of next year.

ADWEEK: How has competition changed among the media brands of what are now the Big Four holding companies?
GERSTER: I think we’re all mindful of a shared challenge: having prospects focus on how we can make a difference in their business and being paid accordingly. If there is no differentiation between the brands in the marketplace, we’re all going to suck wind. When you sit down and realize you’re arguing over one-tenth of a percentage point on compensation, it boggles the mind at times.

ADWEEK: What are the most pressing issues facing media agencies?
GERSTER: Each agency has its own individual challenges. You’ve got combinations of resources coming in, you have changes of ownership, you’ve got a lot of things going on here. I can’t think of any company that doesn’t have some issue they have to deal with. That aside, the big challenge for all of us is to continue to focus on our role in this communications-channel planning world. You see clients quite interested in it. The question is, who can do it properly?

ADWEEK: How do you define communications-channel planning?
GERSTER: Ah, that’s the point! It can mean doing media planning very creatively to actually managing a marketing portfolio, selecting out everything from product placement to PR to direct response to sampling to channel marketing, whatever. It’s a very, very vague term, and depending upon how it’s applied by the client, it becomes not only a competition between the media service and the agency [but] a matrix competition between is this an agency responsibility or a media responsibility? It’s a resource-challenged area, so then it becomes a question of who can grow into it.

ADWEEK: How would you characterize your management style?
GERSTER: Low-key in terms of manner. Usually intense in terms of seeking the core of any issue or any question.

ADWEEK: Anything else different at Initiative? The coffee, maybe?
GERSTER: Starbucks is Starbucks. I never could get the coffee right at Grey. I can’t at Interpublic, either.