In the latest chapter of ‘The Media Men’, the stories behind today’s media agencies, Jack Klues describes the journey from SMG to VivaKi in four acts.
Act I: From fast follower to market leader
I loved being a part of Leo Burnett, and still do. Others blessed to have been a part of this iconic, Chicago-based ad agency will tell you that, once a Burnetter, you are always a Burnetter.
Leo, the man, built his agency on long-standing Midwestern US values of personal integrity, transparency and client service/loyalty, and valued its people. It was these values he told his employees to protect and nurture.
I like to believe I always tried my best to lead and develop a media specialist agency business that stayed true to these principles.
However, I am getting a bit ahead of myself in telling this story.
Let me begin by sharing what might be a surprising revelation. The creation of one of the most successful media agencies in the industry today was not my idea. I loved Burnett and was a bit afraid of any dramatic change in my professional life of about 20 years at the time of Starcom’s conception.
It was Richard “Dick” Hobbs, worldwide media director at Leo Burnett, who first sensed that we were entering one of advertising’s greatest periods of change. The year was 1994. Dick had good reason to feel change was imminent, and he was not alone. The vast majority of our people working in their respective offices and cubicles felt much the same way. The media landscape was continuing to fragment and become more complicated. Our clients sought even more effectiveness and efficiency from their ad spend. Work was becoming less and less fun.
Dick called upon Bob Brennan and me to start exploring the possibility of reinventing the Leo Burnett media operations around the world. Bob was head of our international media business and was sent to Europe for six months to gather intelligence on what was a relatively new breed of agency competition, the dedicated media-buying agencies. They went by the names of Carat, CIA and Zenith. These specialists were effectively seducing our clients with a simple, yet highly compelling story – a story that challenged clients to move their media buying from their full-service agency and its media department to a dedicated media-buying business with more resources and spending clout.
“This was no fad: the media specialist agency appeared to be here to stay”
Bob returned with his mission accomplished. This new breed of competitor was for real. Worse, some of Burnett’s largest multinational accounts were taking notice and even giving these standalone upstarts buying assignment that used to be our agency birthright! This was no fad: the media specialist agency appeared to be here to stay.
It was my role, as head of US media operations, to interrogate our clients immediately in terms of our service and, specifically, where they saw their own future media planning and buying needs. Media buying scale and our marketplace negotiating expertise were not in question among our US-based clients. The Leo Burnett US media department still represented some of the biggest blue-chip advertisers in any league table. Our reputation for driving a good deal was rock solid because of our size in the US and the remarkable expertise of our recently retired department boss, Willard Hadlock.
The US client need and challenge was different. Our clients were becoming enamored with new planning tools and TV “optimising” technology that could make the tactical buying process more powerful and give advertisers the advantage of knowing people’s viewing behaviour better than any individual seller/owner. My search for the “best in class” of such tools led me outside US borders as well. For me, it was to go to Sydney, Australia, to meet two brothers who were engineering and math wizards. They had built a national commercial television audience optimiser called TARDIIS. I knew we had to have it, and saw in it the same potential that our clients had been hoping for.
The rise of European media-buying “independents” and the growing industry-wide rush to embrace “new technology” were the two driving factors that worried Dick – and now us. We all started thinking seriously about a new service model and organization for the Leo Burnett media department. These problems were keeping the department from attracting and retaining the best people, and standing in the way of investments in powerful new technology. And perhaps most distressing, they were impeding the nimble acquisition and/or allocation of resources necessary to support the very clients we were in the business to serve.
“Our solution was becoming clear: we needed to separate ourselves into a distinct branded specialist media business that included planning as well as buying”
Our media department could not decide its own account terms – or even plan its own pitches. Every decision ultimately got held up by people in the account-management side of the agency who really did not fully appreciate our value within the organisation. To some, we were simply a cost center needed to place broadcast TV and press ads.
Dick, Bob, I and a few other trusted colleagues – like Renetta McCann, Jeannie Euch and Kate Sirkin – were committed to taking action. Our solution was becoming clear: we needed to separate ourselves into a distinct branded specialist media business that included planning as well as buying if we were ever going to be able to integrate our best work on behalf of Leo Burnett clients, as well as chase a few of our own.
What would the Leo Burnett board say? Even Leo himself, who once threatened his employees about if and when somebody might remove his name from the doors of the agency? We were fortunate to find an ally on the Board in the form of Roger Haupt, the CFO. He was well respected by his fellow board members and had a shrewd global understanding and firm belief in the media numbers that underpinned his livelihood. Roger helped us compile all the internal financial data we would require to convince remaining board members that our solution to spin-off was sound.
Roger helped us frame our proposal in the way that was most palatable to the Leo Burnett Board. The company we envisioned would not strive to emulate European media specialists. It would not be a commodity buyer starting its sole claim on the basis of scale. And we needed to separate ourselves from the “mothership” in a respectful manner so as not to alienate other departments and our colleagues. It would, instead, strive to be the world’s preeminent media consulting firm with emphasis on strategic communications planning as opposed to low-cost buying exclusively.
Starcom was born.
The name was chosen as a nod to Leo Burnett and its astral logo. Bob Brennan was the new media company’s first president and I became the founding chairman, whilst Dick – justifiably satisfied and accomplished – decided to retire after 35 years at Leo Burnett.
In short order, Bob and I grabbed the reins of our new company. Leo Burnett and its Board gave us a running start. We had the freedom to invest and pursue the best talent, technology and research.
We were fortunate enough to get Frank Voris to join us as our first (and only) global CFO from Leo Burnett US. His unique combination of financial discipline and operational passion was absolutely essential to our short-term and long-term success.
By 1998, we had started to win every major US media pitch we entered – Miller Brewing, Sara Lee, Walgreens – and still kept incumbent Leo Burnett clients happy with a planning capability more invigorated than all wished for but few thought possible. By 1999, Starcom Worldwide had launched successfully in 75 markets.
“We moved quickly from our beginnings by learning from other media agencies and avoiding making the same mistakes”
By 2000, we had amassed billings in the neighborhood of $6bn, including the new multibillion-dollar General Motors media-planning assignment. We began to collect almost every industry award and recognition, for several of which we were the inaugural recipient. Starcom had made the transformation into an exciting new company with a flavour all its own, and yet with unwavering commitment to brand-building. I guess we really had not fallen all that far from the Leo Burnett “tree” and its beloved, symbolic apples after all.
We moved quickly from our beginnings by learning from other media agencies and avoiding making the same mistakes. However, our evolution and growth could not stop. The ever-changing media landscape demanded looking forward with no time to sit back and applaud ourselves for what we accomplished.
Rishad Tobaccowala was just finishing the creation and launch of Leo Burnett’s first major step toward its own march to digital transformation. Along with the wickedly smart brothers, Adam and Eric Hennigan, Rishad created a digital agency named “Giant Step”. Rishad, always restless to learn and experience the “next thing”, came to my office interested in joining us to lead Starcom’s own digital marketing/media practice, which started as fewer than six staffers under the Starcom IP brand. His unique ability to envision what our future could look like and turn this into reality was a major, if not the single most important, element of our quest to improve our business every year since 2000.
Rishad had been named by Business Week as one of the decade’s top leaders and Time magazine dubbed him one of its top-five marketing innovators. He is in the Advertising Age interactive Hall of Fame and an OMMA All-Star Strategist. He has also been a featured writer and manages two blogs with over 20,000 followers at the last count. Today, Rishad acts as chief strategist for Publicis Groupe. He advises and directs its chairman, Maurice Levy, just as he did for me until my announced retirement in mid-2013. We remain close friends and I will be forever in his debt.
We launched new practices across a wide variety of media services, trying to cover as many “consumer contact” points as possible. By our third year of existence, we had launched the first multicultural media agency, named Tapestry, the first integrated sports marketing agency, called Relay, and a branded entertainment/TV production unit.
Our young agency also needed intense internal and external communications expertise as we forged new business paths, launched new practices and branded functional units, and dealt with so much rapid change. Our “Master Storteller” has been (and continues to be) Cheri Carpenter as Corporate Comms Director/Troubleshooter and forewarner of issues lurking on the horizon. She has proven to be an indispensable part of the leadership team and a source of expertise that should be understood as essential to real business growth.
Act II: The importance of scale and global legitimacy
Clearly, Starcom was a winner almost right out of the gate, especially in the Americas. But what about the rest of the world? It ranked in the middle of the pack in many Asian markets and was barely on the listing in Western Europe.
At the beginning of 2000, the biggest blue-chip client advertisers and target prospects were seeking agency partners who both had the most global market clout and could promise the consistency of service that matched their own organisations’ business appetites.
We needed to get bigger, and fast. Bob, Frank and I encouraged meetings with leading independent competitors who might be interested in some type of win–win agency alliance. One of the most compelling ideas was brought to us by our board ally, and now boss, Roger Haupt. Apparently, Roger and Roy Bostock, CEO of the D’Arcy group, had been meeting privately over the notion of combining the Starcom and Mediavest agency businesses. We were open-minded to the idea, and started preparing for what would certainly be a complicated marriage in order to unleash the huge potential of the combination of two giants.
We worked as a small task force in secret under the code name “Project Gorilla” for most of late 1999 and into 2000. Project Gorilla showed us the potential benefits of combining our business with Mediavest as well as the issues. The biggest problem, which ultimately stopped the project, proved to be the fundamental difference between our operating philosophies. Mediavest had built an impressive buying practice, but allowed communication strategy and planning to be left as part of its creative ad agency parent. On the other hand, Starcom always saw its market differentiation and power by acting as strategic planning leader. Buyers bought the plan and were not encouraged to change plans to fit an attractively priced deal, any more than we would allow a Leo Burnett account man to dictate one unilaterally.
About six months later, however, a more comprehensive discussion surfaced which would have seen the D’Arcy group, the Leo Burnett group and Japanese ad giant Dentsu brought together under a new holding structure called bCom3. The combined media agency group became known as Starcom Mediavest Group, with me acting as its global CEO and chairman, supported by a diversified Board of Directors across each agency and continent.
“Under the Starcom Mediavest Group banner, we became legitimate global media agency players”
It was not always easy to now get these two very fierce competitors to behave and collaborate, but we found a way to respectfully leverage our technology, talent, buying clout and research capabilities without compromising the individual brands and their local leaders’ commitment to client service and confidentiality. Under the Starcom Mediavest Group banner, we became legitimate global media agency players, able to protect hard-won clients as well as to compete successfully for new assignments. SMG added multiple major-market “agency of record” assignments in the US, China, Mexico, the UK, Australia, the Nordics and even Russia, to name a few. Advertisers like Coca-Cola, Procter & Gamble, General Motors, Kraft and Kellogg’s joined us in all these markets and more.
Starcom IP became “SMG Next” (later branded by Rishad as “Denuo”). We needed to prepare ourselves to lead our clients into this new technology-fueled future, as it was during this period (around autumn 2000) that Rishad made a presentation to the SMG global board that he called “Dawn of a New Era – New Mindsets and Approaches to Marketing Communications in the 2000s”. Looking back, it was perhaps the most enlightening and important board meeting that I ever chaired. In the way only Rishad can explain big thoughts, he made it clear to all of us that technology was simultaneously fragmenting media and extending its channels, while allowing unprecedented control by audiences who craved a more personalised experience.
It was about to change everything we had learned as media professionals for the previous 20 years. I understood his message and embraced it.
Continuing to follow this lead, together we launched “Play”, the first company to leverage the power of video games in building connections between consumers and brands. We also created “Reverb”, which we described as a word-of-mouth media practice, well before Facebook, Twitter, Instagram, LinkedIn and other new powerful social media platforms really existed. The last two branded practices introduced at this relatively early point in our history were called “Digits” and “TV 2.0”, as we became aware of the potential communications power of mobile technology and how people would probably be engaging with video messages across multiple, interactive screens by the end of the decade.
It also was at about this time that I introduced another companion agency within the Starcom Mediavest Group family, called Starlink (now branded and marketed under “Spark”). The initial intention was for it to offer our substantial resources and scale to smaller ad agencies across the US who found it either too difficult or too expensive to stay competitive in the age of media agency specialization. This model received limited early traction and I almost shut it down on a number of occasions because it was draining the SMG. Thank God I did not! Starlink/Spark is one of the fastest-growing media agencies today and has found a way to make its history and size work to its advantage in ways I honestly never conceived.
“My boss, Roger Haupt, called me into his office to inform me that Maurice, Mr. Fumio Oshima of Dentsu and he had come to an agreement that Publicis would be acquiring all that was called bCom3″
Probably one of the most satisfying innovations introduced at this time was a new job function in SMG, which I called Brand Contact Specialists. I recruited top talent from Leo Burnett, D’Arcy and other creative agencies where these people were often called account planners. It was the responsibility of these media contact/channel specialists to help SMG planners gain deeper insight of the media use behaviors of people and consumers for our clients’ products, not unlike how their old ad agency bosses asked them to inspire copywriters and art directors of beautifully crafted message content.
Around the turn of 2002–3, I was introduced to Maurice Levy, chairman of Publicis Groupe. My boss, Roger Haupt, called me into his office to inform me that Maurice, Mr. Fumio Oshima of Dentsu and he had come to an agreement that Publicis would be acquiring all that was called bCom3. My own new role would be to manage the collective media agency resources of both SMG and ZenithOptimedia under the Publicis Groupe Media (PGM) name.
This was obviously a terrific opportunity to increase overall scale and resources by finding a way to put these two impressive media networks together, as I had learned from my experience managing Starcom and Mediavest. I had to keep in mind that, if you want to gain anyone’s cooperation, you must first gain trust by communicating with sincere respect, and do so consistently. Steve King, Adrian Sayliss and his Executive Board cautiously invited me to learn about ZenithOptimedia and be a part of their company.
Looking back, PGM would never have succeeded to the extent that it did without their leadership, contributions and willingness to allow this Midwesterner into their inner management sanctum. I will never forget their good-natured nickname for CFO Frank Voris and me: “The boyz from Illinois”.
Steve had already begun to deploy his own vision as to how ZenithOptimedia must evolve from its media-trading roots and tie its new strategic planning focus to measureable results. The new ZenithOptimedia mantra was unique and powerful: “The ROI agency”. It was also a time when Steve’s management group gained inspiration from Jim Collins’s book Good To Great. They became convinced the author’s lesson on eggs, flywheels, hedgehogs, buses and other essentials of business would help transform ZenithOptimedia.
Interestingly, my Paris HQ remit to build PGM seemed to fit nicely with this new ZenithOptimedia initiative. Collins said in his book:
Companies that make the change from good to great have no name for their transformation and absolutely no program. They neither rant nor rave about a crisis – and they do not manufacture one. They don’t motivate people. Their people are self-motivated. There is no evidence of a connection between money and change mastery.
There is no miracle moment [based upon Collins’s research of over 1,400 companies]. Instead, down-to-earth, pragmatic, committed-to-excellence process – a framework – kept each company, its leaders, and its people on track for the long haul.
I may have been familiar with this book’s existence, but it was through watching it applied toward ZenithOptimedia that my own instincts and approach for PGM was codified.
ZenithOptimedia expanded its own product suite to include a state-of-the-art marketing-modeling business called Ninah and a Europe-based digital company called Pole Nord, and acquired Performics, a search-based operation from Google, and an award-winning digital agency from Atlanta named Moxie.
PGM had become the second-largest media agency combination in the world. Maurice invited me to join his six-person Directoire as its only American. It became clear to me rather quickly that Maurice and Publicis Groupe had very high regard for its media operations and it had equally high expectations.
Act III: Accelerating digital transformation
Somewhere during 2006–7, Maurice Levy decided to press the accelerator to evolve the digital marketing tools and resources for the Groupe. While PGM was taking steady, organic steps in this direction, I do not believe Maurice was satisfied with the overall pace of the Groupe compared to what was happening across the changing global media landscape.
Publicis Groupe acquired Digitas for a reported $1bn. Its CEO, David Kenny, had grown this business in terms of skills and resources to become the largest agency of its type in the world. Its people had embraced the new technology and changes in customer behaviour Rishad had predicted to my SMG board just a few years earlier. At the time of my introduction to Digitas, I got the impression that its executive team saw themselves as the future of marketing communications and that all other more traditionally grounded agencies were “dinosaurs” headed for inevitable extinction. Their attitude was understandable: evolve or die!
If Digitas was to be the Groupe’s accelerant for digital marketing change, would they be willing and prepared to guide, share and collaborate with perceived “dinosaurs” like Starcom Mediavest and ZenithOptimedia? Conversely, the two media networks would have to accept they could not make the necessary complete transformation on their own. And clients wanted and needed all these agency resources to work in harmony.
Maurice asked the PGM executive leadership (Rishad, Frank, Jack, Steve and SMG Global CEO Renetta McCann) and David Kenny to work together to develop a new organisational model that would not only keep pace with the industry’s digital revolution but also lead it, bringing along all other agencies of the Groupe to work collaboratively in keeping with Groupe vision and philosophy.
Our success would require us to be able to meaningfully engage with deeply understood and precisely targeted people who had the greatest affinity toward our clients’ brands, and we had to do so within a highly fragmented contact environment dominated by digital. It would require each agency to declare what it knew to be Best in Class, as well as having the humility to see where it needed help from the others. As Rishad was fond of saying during our work sessions, “Solutions of the future cannot fit in containers of the past”.
“The VivaKi branding was an homage to what had propelled us forward, and acted as a testament to our ability to grow, change, evolve and respond to whatever comes next”
After nearly six months of clandestine meetings, we gathered with Maurice in a meeting room within the confines of Heathrow Airport. We unselfishly collaborated and built an entirely new structure around the dual construct of leveraging scale to enhance participating brand agency and overall Groupe skills.
The name VivaKi was derived from two words. Viva means “long live”. We believed this initiative would have a fabulous future, and bring our clients the double advantage of a single-source service model with best-in-class capabilities on a global scale. “Viva” also acted as an acclamation, a salute, full of excitement, and contained a kind of optimistic call to action. Ki (or qi) is frequently translated as the “energy flow” that sustains living beings, as found in many religious belief systems, especially in Asia. Together, the VivaKi branding was an homage to what had propelled us forward, and acted as a testament to our ability to grow, change, evolve and respond to whatever comes next.
At launch, VivaKi focused upon three dimensions of scale behind the skilled agencies of Starcom Mediavest Group, ZenithOptimedia, Denuo and Digitas: people, digital, and fortification of the critical intersection between contact and content. It was to be led by David Kenny and me as joint managing partners.
Fuelling the braintrust of VivaKi was a new function called People and Innovation. Publicis Groupe was founded upon a deep appreciation of and respect for people, especially its employees. This was not unlike my Leo Burnett roots. It was a function created to bring consumer marketing discipline to bear on our own talent. It went beyond compensation and training to encompass people-based programs that would recognise and celebrate the unique talents of individuals. We intended to create an atmosphere of community inside our organization, where talent was liberated to challenge the status quo, chase innovation, learn new skill sets and benefit from more open access to other functional ad communities inside the new organisation.
Another key component of VivaKi was the digital nerve centre (DNC), led by Curt Hecht, later the chief global revenue officer of The Weather Company and now sadly deceased. The DNC remit was to develop and deliver unparalleled expertise with digital and emerging technologies. It was both incubator and activator for new capabilities and tools such as the development of a proprietary business/data management system for multinational, multi-brand clients.
The DNC comprised a performance-marketing arm that aligned our relatively young search, display, video, mobile et al programmatic ad-buying suite that we called “audience on demand” (AOD). It also included new ventures practices, with its inherent tools and venture-capital relationships, aligning with the inventors of tomorrow’s media and exchanging intellectual capital for first-to-market opportunities to reach consumers across emerging platforms.
Last, but hardly least, our global futures brand, Denuo, would continue to operate as a “plug and play” consultancy, connecting with and contributing to Groupe agencies and delivering new thinking to clients. It would perpetually reinvent itself toward meeting the anticipated needs of clients and ourselves.
About one year after launch, Maurice and the Groupe continued its drive to improve the digital capabilities for all through the acquisition from Microsoft of digital agency Razorfish. This brought us another significant global infusion of brilliant digital-marketing experts and powerful, proprietary technology that could fuel VivaKi and ultimately take Publicis Groupe to unchallenged leadership in the newly defined digital media arena and far ahead of other major holding companies.
Act IV: What’s next?
As I was approaching my official retirement date with Publicis Groupe, Maurice asked if I would develop a specific succession plan and model for VivaKi 2.0.
We agreed that the introduction of VivaKi had been a success on many levels. It accelerated our digital transformation in line with his vision as Groupe Chairman. It gave clients access to our entire suite of products and services across both traditional and new media boundaries. And the DNC developed products necessary for our clients and us to survive and thrive in a world of constant change and increased automation fueled by new technologies. It was time to extend VivaKi as a more directly sharable resource to all agency types within Publicis Groupe beyond media and digital.
Succession in terms of leadership was really the easiest part of this, my last project. The leaders of all the founding VivaKi agencies are industry icons in their own right. The functions that would remain central to VivaKi 2.0 would be in the trusted and capable hands of Rishad Tobaccowala and Frank Voris.
“Always remember that everyone is a contributor and no one is bigger than the company for whom we all work”
My management team has delivered exceptional and profitable growth each and every year up to the present day. I have no doubt that this will continue without me. I have found my own way of overcoming my fear of change during these last 15 years of my career, but I remain true to the beliefs and principles with which I was raised at home and at Leo Burnett:
Treat everyone as you want to be treated yourself
– There is no “I” in team
– Forewarned is forearmed
– Respect “the Lonely Man”
And always remember that everyone is a contributor and no one is bigger than the company for whom we all work.
As those French literary heroes the Three Musketeers would say, “All for one, and one for all.”