In the first of a series celebrating the founding fathers of modern media, Allan Rich shares his story, from setting up independent planning and buying agency The Media Business to becoming CEO and chairman of MediaCom.
In 1958 I left school at l6 years of age, knowing that I always wanted to be in the advertising industry.
However, as neither my parents nor I had any connections within the industry, I simply wrote to 20 full-service advertising agencies. Sadly I only got one reply, from the then eighth-biggest agency in the UK, Masius Wynne Williams, which was run by two very well-known personalities within the industry – Mike Masius and Jack Wynne Williams.
The opportunity offered to me was pretty normal for those days in that I would start in their dispatch department, which was simply a place from where letters or parcels were taken around to other people within the company. However, as it was the only opportunity on offer, I was more than happy to take up the position immediately.
After six months in this department, one day I was invited to take up a position in the media department – specifically in their television time-buying division, which I very quickly found out was the very first dedicated such service in the UK. So in a strange way I found my way into the media world a little by default, and it could well have been different if the first opportunity given to me had been in the account handling or creative divisions of the agency.
In order to learn about all other aspects and understand the ad industry better, I signed on at the college of Distributive Trades in Charing Cross Road for a five-year course. This consisted of nine individual segments covering all aspects of the industry, ranging from the basics of copywriting through to all the technical difficulties which at that stage the print media world had to cope with, as well as economics and psychology in relation to advertising. So for five nights a week I would go off after work to evening classes with the intention of becoming an MIPA and MAA after passing all the exams, which I completed in 1966.
“In those days, media planning and buying was right down the pecking order”
In those days, media planning and buying was right down the pecking order and it didn’t seem to matter very much how successfully or brilliantly you were negotiating on behalf of clients in order for them to get best value from every pound they spent; marketing directors were almost all single-mindedly concerned only about the creative output. Indeed, in any client presentations – be they existing or new business – the media presentations usually ended up as just two minutes at the end of a two-hour show, or sometimes left off altogether. This is extraordinary when you consider the value placed in today’s world on the importance of all aspects of media planning and buying.
Unlike now, there were 14 independent television contractors, many of which were public companies listed on the London Stock Exchange. In addition, in the print world many of the newspaper groups enjoyed completely full issues – something never heard of today – and indeed some newspapers, like the Sunday and Daily Express, often could not accommodate even the smallest amounts of space unless you committed many weeks in advance as their order books were full.
The power of television
When it came to negotiating in the television industry, the beauty of having so many independent companies (representing, of course, different parts of the country) meant that we could play one off against another, bearing in mind that all of them were trying to retain their fair share of any budget in relation to the size of the population they represented. Within the television buying division at Masius, we became very well known for driving the hardest bargains and therefore getting the best possible deals for all of our clients.
Over the next four to five years I rose within the division, to the extent that I was heading a substantial part of all of our television-buying responsibilities and looking after major clients such as Mars Pet Foods and Colgate-Palmolive. But, perhaps more importantly, the knowledge gained from my college courses enabled me to begin to have closer links with all aspects of our planning and creative divisions and play a much bigger part in the total advertising decisions that we were taking as an agency (although obviously still concentrating on my television-buying responsibilities).
I was very enthusiastic and perhaps my greatest coup came when I learnt that The Beatles were going to appear on Sunday Night at the London Palladium, which was then the most highly rated show of the week, getting enormous audiences. I moved every one of my clients into every break in that show – which was difficult, to say the least, because everybody wanted to be there, but I got there first and was very proud of the fact. I think, at that stage, that was a moment in time which probably confirmed to me both how competitive and, more importantly, how entrepreneurial I really was.
In the middle of 1966 and at the age of 24, I had a phone call from the marketing manager of Colgate-Palmolive, and he simply said, “Allan, you have done a great job for us but I am leaving Colgate and going to help start a brand-new full-service advertising agency. We would like you to be our media director.” However, I was getting married that year, and I will never forget my future wife, Vivienne, saying, “It’s worth a chance, because you can always go back to being a television time buyer.” So in June 1966 I joined six people, five of them from Young & Rubicam, and all of them well-known creative people at the time, such as Norman Berry, Jill Asquith, Paul Hoppe, David Newton and Mario Lippa.
“Our agency quickly became one of the hottest boutiques in the UK and over the next four years created some extraordinary creative and media work”
I should emphasise this was still to be a full-service advertising agency, which we called Davidson, Pierce, Berry and Tuck. Jimmy Davidson was an accountant and Ted Pierce was the brother of John Pierce of CDP fame, and of course Norman Berry had been the creative director at Young & Rubicam. However, the strange feeling was that, unlike all the large clients I had been used to handling, on day one we only had one client. SPC canned fruit was hardly the biggest client in the world, but I was determined to get them into the best possible commercial breaks, even though they were a very small player in the overall media world. I managed it by getting them immediately into the centre breaks of the then highest-rating programmes on the networks, such as The Avengers, and achieved this thanks to the goodwill extended to me by all the contractors.
Our agency quickly became one of the hottest boutiques in the UK and over the next four years created some extraordinary creative and media work, particularly for industrial advertisers who, until then, had simply used trade magazines. What we did was brave and needed a brave client, because we took them out of those magazines and into the then very new weekend colour magazines of the Times and the Telegraph, in essence to treat their target audience (mainly factory managers) as human beings who often needed to relax at weekends like everybody else. This, together with some amazing creative work, was hugely successful. The beauty of it was that I was able to bring the importance of media up to the same level as the creative process and, by so doing, was allowed to be involved in all aspects of the decision-making as opposed to simply being an outsider doing the bidding of the creative work.
Against this background, I was beginning to build a formidable team within the media department, all of whom could benefit from the close interaction between our creative and account-handling divisions. Only limited media research was available in the late 60s, and one of the key methods we used was reading and noting studies which demonstrated that we needed always to have the first spreads or whole pages available in the colour magazines. In terms of television, we used presence research which had been done in the early 60s and demonstrated the importance of centre breaks as opposed to beginning and/or end breaks.
“In 1969 we had a call from the Conservative Party asking us to pitch for the 1970 general election marketing campaign”
Four years into the agency’s existence, we had grown from seven people to almost 200 but, because we had a limited number of consumer-related clients, we bought Spottiswood, an agency with a fair amount of Unilever business amongst their clients; bearing in mind that we were substantially full of industrial clients, this enabled us to have a much more balanced portfolio. Amongst these was Brooke Bond Tea, which had famously pioneered the use of chimpanzees with wonderful storylines in the commercials; indeed, this is still one of the most remembered campaigns of all time.
In 1969 we had a call from the Conservative Party asking us to pitch for the 1970 general election marketing campaign. We won, and set about creating exciting creative and media executions in the run-up to the election. I shall never forget having to present to the then shadow cabinet on why they should be advertising in the News of the World and not in the Sunday Express, where the majority of their existing supporters were. They finally got it and understood that, however down-market the News of the World might seem to them, it was full of voters who had never voted for the Conservatives. On the night of the election it was nip-and-tuck all the way, but I remember getting a call at 3am the next day from Norman Berry to say that the Conservatives had won and that Edward Heath would be the new prime minister.
All of this success meant that we had outgrown our existing offices in Marylebone, and we moved to very plush offices next door to Harrods in 1971. Then, early in 1974, one of our largest clients challenged us in relation to our ability to buy as competitively as other traditional media departments in certain major agencies, and that if we didn’t deliver the value we had promised them for their forthcoming campaign, they would discount our normal agency commission accordingly.
Breaking the mould
This was the trigger that set me believing that there was clearly an independent media planning and buying business opportunity outside the full-service arena. So, in June 1974 I suggested to my colleagues at Davidson Pierce that we could offer out our successful media department to those smaller agencies that couldn’t afford or didn’t want a media capability of their own, and also to the many creative boutiques that were now in the marketplace and who had no intention of ever having a media department. Sadly, my colleagues considered my ideas to be too radical, and I gave six months’ notice of my intention to start an independent media planning and buying company on my own.
In February 1975, I founded ‘The Media Business’, a name which best reflected the fact that we were in the business of media; I invited Don Beckett to join me, as he had recently left Lintas, where he had been Media Director (sadly, he was forced to retire a few years later due to ill health). We chose not to use our own names, as this was a relatively new concept of which most traditional clients and their marketing directors would not be aware. At this stage I had little or no money coming out of Davidson Pierce as I hadn’t owned any equity – a mistake that I never made again, by the way. As luck would have it, however, on the day we launched, the Financial Times carried their usual page on the advertising industry and featured my departure from my media directorship with one of the UK’s hottest full-service advertising agencies to set up one of the country’s first truly independent media and buying companies. I had a dream and I was determined to see it become a reality, not knowing that this could eventually become a worldwide concept.
At first we could only afford to hire a desk and a telephone on a weekly basis at the International Press Centre in Shoe Lane (where many of the independent journalists in Fleet Street had their desks), with my wife, Vivienne, as my PA. On the very first day, we had three enquiries due to the FT article. These were two well-known creative boutiques who obviously didn’t have and never wanted a media department of their own, and one relatively small full-service advertising agency. We spent only three weeks there, because by then we had accumulated ten clients, including a part of IPC Magazines, who did their own creative work internally and therefore only required a media planning and buying capability – a huge endorsement for the independent media industry, let alone for us, because they were a major media owner.
“Unfortunately for us, whatever our previous reputations, the industry bodies representing the owners of the various sectors of the media did not recognise our company”
Unfortunately for us, whatever our previous reputations, the industry bodies representing the owners of the various sectors of the media (press, television etc.) did not recognise our company. This meant we could not receive commission (normally 15% on expenditure) or credit terms (25 days with TV and 30 days with print). The industry bodies’ rationale was that they only recognised full-service agencies who offered media planning/buying and creative as a bundled service, whereas we were not going to supply the creative work. We therefore had to find another way of placing the media for our clients, otherwise we would need to pay in advance with our own money. This was because the full-service agencies acted as principals in law, and so were responsible to the media owners for payment even if their clients delayed payment – or, indeed, went bankrupt.
We had one full-service agency as a client for whom we charged a fee to plan and negotiate the media for their clients. To overcome all these hurdles, we approached them suggesting that we reduce our fee for handling their media activity if they agreed to act as principals on our behalf for all our other clients. This was quite radical, but they said yes.
Now we had clients, credit and commission. This allowed us to plan and buy media for our clients by charging a fee of 2% of expenditure. The other 13% from the agency commission we rebated to them to use as they wished, either to buy creative services or for any other form of marketing activity. An important element of this arrangement was that we would not take on any clients we couldn’t fully indemnify against default. We had very little finance at this stage and indeed everything we were doing was self-financed, so we couldn’t take any risks of default from any of the clients. I am very proud of the fact that throughout my career we have never borrowed a dime and have self-financed all required capital investments as we could afford to do it.
Whilst this arrangement was in place, we needed to convince all media owners that they should recognise our right to earn media commission and allow us to apportion it in any way that I liked. This battle took over two years and many meetings with all the various media bodies before finally convincing them that, although we were not a full-service agency, we were still entitled to the commission.
“We needed to convince all media owners that they should recognise our right to earn media commission and allow us to apportion it in any way that I liked”
Against this background, it is interesting to note that it took nearly 15 years from when we got acknowledgement from the media owners that we could act as principals in law and retain the full 15% commission for the full-service agencies to take us seriously and begin to set up their own so-called dependent operations. But bear in mind that they were technically simply shifting their existing media departments into separate buildings, with the primary objective still being to look after their sister agencies as a priority over gaining any new truly independent media clients.
After leaving the International Press Centre, we took some modest office space just off Albemarle Street and I began to persuade my former media colleagues at Davidson Pierce to join me. I have to say they couldn’t wait, as they had obviously begun to share the same dream. With more clients coming on board over the next three years to 1978, we had something like 20 staff – and the need yet again to find larger premises. So in l979 we took larger offices just off Tottenham Court Road and over the next 13 years grew the business substantially while still enjoying almost no competition from the large traditional advertising agency media departments. At the same time, we had acquired two new fabulous agency clients – Davis Wilkins and Howell Henry Caldicote Lury – who over the next few years, together with us, produced some outstanding work for many high-profile clients.
Incidentally, during these early years I stumbled across a major ad agency that wanted to get rid of its outdoor media planning and buying division; because we already handled some of that agency’s business, I offered to buy it from them simply by taking all of their staff under our wing, thus saving them all the salaries involved. Of course, in return we now had all of their poster business – which included famous outdoor advertising brands such as Midland Bank, Harp Lager and Lamb’s Navy Rum, all huge spenders on posters around the UK. I decided to set up a separate business within the group called “The Poster Business”; after all, we were in the business of buying posters on behalf of our clients. The useful thing here, though, was that because we set it up as a separate poster-buying bureau (of which there were only four in the UK) we were entitled to enjoy the extra 5% commission for being an official recognised bureau, over and above the normal 15%.
During this period, there were a growing number of other independent media planning and buying companies and it occurred to us all that we should get together and, if possible, encourage two journalists – John Thater and Tim Brooks – who were planning to produce a weekly magazine that could focus exclusively on the world of media; Campaign tended to focus on not only the full-service advertising agencies and what was going on there but also, and more importantly, the creative output that came from them, and paid little or no attention to what was happening in the independent media world. They called the new magazine, which was launched on 8 February 1985, Media Week (and, by the way, we took the first whole-page ad in that issue as the launch coincided with The Media Business’s tenth anniversary). As most readers will know, this continues to this very day, although now only online. It was designed to look exclusively at the whole world of media activity and was a huge success from day one but, most importantly, it highlighted the importance of media planning and buying in general.
Around the same time, a number of our competitors also felt that we should consider setting up an association of media-buying companies as all of us felt we did not wish to be members of the IPA. We agreed to call it the Association of Media Independents (AMI). Together with the development of Media Week, this really gave the whole media community a very much higher profile.
At this stage (around 1990), we had once again outgrown our offices and decided to move to some beautiful new premises just off Park Lane which, only a stone’s throw from Selfridges, was to prove especially attractive to our staff, giving them the ability to use Hyde Park as well as the enormous shopping facilities at that end of Oxford Street.
Up to now everything had only related to our presence in the UK, but more and more our clients were demanding an international capability, certainly a European one. Initially, therefore, we set up our own internal international division, which we called ‘Media Business International’ (MBI), staffed by a small team in London. However, to enhance this, we had to decide whether we would try to buy other media companies that had set up across Europe, or find another way.
We decided to arrange a trading agreement with the Initiative Media Group, who were owned by the American Interpublic Group and had offices in almost every country in the world. The arrangement was to use their good offices whenever we had a requirement from our clients and vice versa (although that was rare as they had their own UK office). Having this arrangement enabled us to extend our offering to clients to virtually every country in Europe without having had the expense of capital and time required to buy companies outright – and particularly, as I have said, everything we were doing was to be self-financed.
Standing out from the crowd
With more and more media competitors – both independent and not – coming into the market, one of the ways I always felt that we could stand out from the crowd (in addition to the quality of our thinking) was to find out, when presenting for new business, the football club that the marketing director or CEO supported, for example; the whole presentation team would then dress in the appropriate football kit. In another example, when presenting for a well-known media account that has a crusader as a front-page emblem, I dressed as a crusader and stormed into the boardroom in armour, carrying a shield and of course my sword. Finally, when presenting to a well-known sweet manufacturer, we made the presentation in a sweet shop that we had taken over for the occasion. All of this may sound a little crazy but, in my view, it was a way of separating us from our competitors; nobody forgot what we had done and, provided the substance of our presentation was at least of equal quality to that of others, perhaps the dressing-up would demonstrate that we had personality and enthusiasm in addition to our strategic planning and buying capabilities.
“All of this may sound a little crazy but, in my view, it was a way of separating us from our competitors; nobody forgot what we had done”
During the early 1990s, one other major development added an enormous and quite unique capability to The Media Business: the establishment of a direct marketing division, headed by a talented young man called David Kyffin. This added a whole new dimension to our ability to help clients relate their advertising expenditure to their return on that investment, and proved to demonstrate in almost all future presentations that we could add a different speak and a different language that the clients’ direct marketing teams could relate to, in addition to our normal strategic planning and buying criteria. Thanks to the establishment of ‘Media Business Direct’, we were able to go after business where often direct marketing was a critical part of the potential client’s marketing budget. We had clients such as the Royal Bank of Scotland, Lombard, Book Club Associates and Direct Line, for whom accurate measurement of return on investment was critical.
Whilst all this was going on, we were developing substantial strategic planning capabilities by recruiting to our team people like Sue Unerman, who today – 25 years on – is still considered by many to be one of the top strategic media planners in the UK. This was very important as, by now, media had taken the high ground, with clients demanding more and more from us in terms of all aspects of marketing as well as strategic media thinking.
After so many years, whilst not seriously challenged by the major agency groups, there were many competitor independent media planning and buying companies, so I felt we were ready for the next important development for The Media Business and all my colleagues (who by now numbered more than 200, many of them having been with me since the late 1970s or early 1980s). We decided as a team that it was time to take the whole group to the London stock market, as the company had by now grown not only in terms of turnover but also, most importantly for the market, profitability. However, the major reason for my wanting to do this was to reward all my colleagues – including the janitor, who, by the way, had been with me over 20 years – by having the opportunity to own shares in our business (which had not been so achievable as a private company).
So, in September 1995, we were accepted onto the main London Stock Exchange; on day one, after the placement of only 35% (so keeping 65% of our stock with all our staff), the shares immediately rose by 25%. We weren’t the first independent media buying company to go public. However, one other reason for going to the market was, in my view, to give further credibility to the media marketplace that we were in; and having a stock-market valuation of course meant that the business reflected a true capitalised value. It is interesting to note that, at that early stage, when presenting to institutions we had to work hard to get them to understand that we were not an advertising agency, but rather a group of people who genuinely had responsibility for controlling substantial media budgets. But eventually they got it and certainly the stock market values of the listed companies continued to rise throughout the following years.
“One other reason for going to the market was to give further credibility to the media marketplace that we were in; and having a stock-market valuation of course meant that the business reflected a true capitalised value”
Giving every one of my colleagues shares simply underlines the importance of keeping great teams of people together and rewarding them accordingly. In my view, great businesses of any kind become great by having a consistent management team who also enjoy a share of the business they are running. But in order for this to happen you need principals to be givers and not just takers, and therefore brave enough to give up (as I did) the majority of one’s shareholding for one’s colleagues so they can reap the benefits of a successful business as well. To bear witness to this, you only have to look at the continuing success of MediaCom UK, where the management team is still made up of many of my original colleagues from The Media Business (but more about that a little later). In essence, when speaking to our clients (many of which were public companies themselves), each of our colleagues could now honestly say that, in addition to being an employee, they were also a co-owner of The Media Business, which in my view gave even more added value to going to the stock market. In addition, at the end of each year we were able to give a copy of our annual accounts to each and every one of our clients, demonstrating to them all both how responsible and how transparent we were.
At this stage I was still very happy with the arrangement we had around the world with Initiative Media and, although we had the capability of raising substantial monies from being on the stock market, I felt there was no need to make any acquisitions.
However, after three years on the main London stock market, in 1998 the next major change took place for The Media Business. By now, a number of the major agency conglomerates had been watching our success on the stock market and, because they had only recently hived off their media divisions, felt they needed to buy an independent media company to help them develop their current businesses. We were approached by three groups, all of whom wanted to have us as partners. In the end we selected Grey Advertising in New York as our best option, as they had separated their media department from the rest of their agencies around the world and called it MediaCom. We agreed to sell our public company to Grey Advertising and to initially create a company called TMB/MediaCom, of which I became chairman and CEO, to allow clients of both companies to get used to the new arrangements. Almost all the existing MediaCom team, which only numbered around 30, joined us at our brand-new offices in North Gower Street, which we had just finished refurbishing (and to which, by the way, we had recently bought the freehold – which proved to be, in later years, an extremely profitable decision). So, in Mediacom, we now had a truly global group specialising in media planning and buying with a clear strategy to make it, firstly, number one in the UK and then, over time, number one in the world.
Putting The Media Business and the original MediaCom together still only made us the sixth-largest media buying company in the UK, and probably the eighth- or ninth-biggest in the world. However, we immediately set ourselves the target of getting to number one in the UK by 2000, which meant we had given ourselves just two years to achieve this extremely tough target. But we did it – and to celebrate we threw an extraordinary party at the Commonwealth Institute for many hundreds of guests. At the same time, the advent of social media opportunities, as well as a plethora of new targeted television channels and sponsorship opportunities, meant that we had to up our game and create new divisions within the group to master the new skills required to be able to continue to inform our clients intelligently.
“I am also proud to say that the very same people that were with me for many of those early years are now running the world”
So there you have it – a simple story, really, starting in the late 1950s, progressing through the fabulous 1960s and 1970s, the adventures of the 1980s, into the public arena of the 1990s, and then, as MediaCom, into the new millennium.
I finally retired from MediaCom in 2003 at the age of 61, having seen the success which continues to this day as my colleagues have taken it to heights that we could never have imagined in those early days. In terms of billings, it has been at the top of all UK media companies for the last 13 years. I am also proud to say that the very same people that were with me for many of those early years are now running the world – including Worldwide Chairman and CEO Steve Allan (who, by the way, started with me when he was 18), Nick Lawson, who has responsibility for the whole of Europe, and, of course, the female quartet of Karen Blackett, Jane Ratcliffe, Claudine Collins and Sue Unerman, running the UK.
One of the major differences that allowed us to be so successful against all this background was, as I said earlier, that we had time – almost 15 years of it – before we were challenged in any serious way by the major agencies. This would be far more difficult in this modern world, where everybody and every business has a lead of only perhaps a few minutes over their competitors simply due to the speed of today’s communication. So in that sense I consider myself lucky that I had the time to do everything I wanted and (I repeat) all without ever borrowing a dime, only developing the business as and when we could afford to do so on a self-financing basis – something that would be almost impossible today.
In addition, and right from the beginning, we created a working environment in which we all worked with each other and not for each other, along with a structure that was managed horizontally rather than top-down, as so many companies still have today.
Although I was supposed to have retired from business, I was approached in 2005 to help launch on the stock market a new marketing and research organization, which we called the Cello Group of Companies. This is now in its 11th year and I have chaired it for the last six successful years. Now, at the age of almost 74 – as long as good health allows – I hope to continue indefinitely, as this industry is in my blood, and the energy and enthusiasm that I have always shown in life and in business will, I hope, never leave me.
I leave you with two thoughts. First, even if you may not have all the necessary creative or media skills, these can be learned. However, the one thing that must be in-built is enormous energy and an abundance of enthusiasm for this wonderful industry of ours. And in addition – never forget that the money you are asked to plan and buy for is not yours, so always treat it with the same respect that you would if it were your own.
Thanks for reading – enjoy your careers.
Copyright of Allan Rich – all rights reserved