It was in June that media conglomerate Interpublic combined its Draft and Foote Cone & Belding (FCB) units around the world to create a channel-neutral agency model DraftFCB. Heading DraftFCB as its president-COO is Laurence Boschetto, previously president-COO of Draft.
Hardly has Boschetto had time to gather his breath on the ramifications of the new entity has come an even more radical announcement. Which is that Interpublic is reorganizing its media operations with Initiative becoming aligned within DraftFCB and Universal McCann coming under McCann Worldgroup.
The reorganisation came just ahead of news that the newly integrated DraftFCB has been awarded the account of retail behemoth Walmart worth an estimated $570 million. That the monster win came on top of new business that DraftFCB had won from Citigroup, Merrill Lynch and Atari has been more than a validation for Boschetto and the team at DraftFCB.
In conversation with Indiantelevision.com, Boschetto, who over the last three weeks “has been on the road to every single region introducing them to the new model”, throws some light on just what’s happening at DraftFCB, as too the vision thing with IPG.
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Is it fair to say that IPG’s reorganization of its media operations represents the most significant example of support for those against the unbundling of media that we have witnessed over the last 20 years or so? And extending that posit, can we then argue that making media and creative interdependent is the best way forward? Over the last decade we stripped everything out of an agency, we have taken strategic planning, we stripped away media and now they have basically become interchangeable parts, the ‘value has been devalued.’ So what we are doing right now is we look at the client, we look at the demands and pressures that they have, we look at the environment that their end user works in and we say ‘how do we change the game.’
This might look like the old model but it’s packaged in the new model formulation, an offering of complete integration of products and services but not doing it syllogistically under the model.
What we are saying is that there is one management team, there’s one P&L and the palette consists of all the different skill sets, so the clients don’t have to manage all those relationships and the agency can come back with a business solution orientation based on the real business issues rather than the disciplines that they are confident in.
Today we often hear clients say, ‘I want channel agnosticism and discipline neutrality.’ Yet there isn’t really any channel agnosticism. We didn’t build organizations in the industry that way, we have people that are proficient in strategic planning, in branding, in advertising, in PR and in retail. Now they are asking for renaissance marketing communications people, that’s what this whole model is about, it’s about building another class of business builders in the marketing communication field. |
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The new media strategy represents the third major organizational change Interpublic has instituted this year. What is the broad direction that IPG is taking with all this? When you take a look at the advertising industry, you cannot ignore client structuring and their constituent parts because this tends to have a ‘domino effect’. The environment that the customer lives in has radically changed, technology has changed they way that they live and breathe, how they interact and connect with each other, this has created one basic phenomena ‘immediacy’.
Technology has changed the way we work and engage. This has put tremendous pressure on the CMOs, as they also live in an environment and at a time when their CEOs are demanding performance in their books. It is estimated that every CMO has a life expectancy of roughly 24 months. However, if they have to produce they will have to figure out how to navigate through a company, what the alliances are, who their end user is and quarter after quarter their performance based on real business metrics will determine what their life expectancy will be. |
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If you say that a CMO has an average 24 month life cycle, what happens if he continues to deliver what the client demands? As defined, stage I is to develop a way of operating to deliver that media and channel neutrality and agnosticism and that’s by bringing together not just one person to lead the business but all the discipline leaders at a round table, to form a team for the client. Now, if one client is more strategic in nature then they may have a strategic person in the key position, while someone else who is more data driven might have the data person heading it, but the way we think through the issues are holistic. The goal is that over time we are not expecting that someone who is highly proficient in strategic planning and database modeling to be interchangeable. But the person who heads up strategy must be able to think more holistically, so that when they come to a business situation they determine what’s right for the client. |
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But will these individuals continue to function within their respective units? The goal is to make sure that the purity and the authority of every discipline still resides in an agency so that we never lose that foothold. In the process of giving clients that ‘channel agnosticism’, the days of only the account person holding that relationship, we are saying that before we get there we need to have a team consisting of media, strategic planning, account services and a creative database all sitting at the table and having an equal voice in determining how to solve a business issue. |
We have two sets of market share data in front of us. One is the average channel share data spread over the period of 12 February to 29 July and this almost covers the first and second quarters of the 2006 calendar year. As per the data, Zee Cinema is leading the line up with a channel share of 35 per cent, closely followed by Max at 32 per cent. Star Gold come in third with 25 per cent, followed by newcomer Filmy with 7 per cent. The B4U Movies‘ picture is a dismal one with just 1 per cent of viewing audiences.
Moving in to the Q3 period of July to September, Zee Cinema has further increased its average market share – from 35 per cent to 36.7 per cent. Max, however, shows a slip, shedding about 2 per cent to stand at 30.2 per cent during this period. Star Gold also tells a similar story with the channel‘s average share down to 22.4 per cent. Filmy, on the other hand, has improved its position from 7 per cent to an impressive 9.5 per cent, while B4U Movies has also shown some positive traction to reach 1.3 per cent share.
