From boardroom drama to political intrigue, MBS pioneer Peter Swain shares his story in the latest installment of ‘The Media Men’, a series of articles showcasing the founding fathers of media agencies.
Setting the stage
If anyone had told me of the improbable journey that I’d begun on my first day in 1965 at Hobson Bates in London, I would have thought they’d got the wrong guy! I was a somewhat shy and unassuming sort.
I was, however, at the right place, at the right time.
A dramatic proliferation of commercial broadcast undertakings around the world was creating demand for experts who knew how to get the best and the most from these enticing new advertising vehicles. It was also the era when room-sized computers expanded beyond academia and government to the business sector.
In my case, these catalysts were to become energised with the addition of several more prosaic elements: a retailer selling cheap plastic brushes to remove lint, an era of political patronage in Canada, the kindness of strangers, and considerable luck.
I had left home at 16 on a scholarship from Rolls-Royce to study aerospace engineering, so two things will be apparent to the reader: my poor judgment in thinking that Britain would feature in the Space Race, and the singular absence of any relevant qualification to end up in media.
It took me a couple of years to recognise my aerospace career misstep, but I had a complete ignorance of what a career in advertising might bring. Nevertheless, it sounded exotic after engineering!
My first experience of the kindness of strangers resulted from my being an unlikely recruit of John Hughes, the intimidating media services director at Hobson Bates, who was determined to set the pace to differentiate the competence of his department from all others.
“As the lowest grunt on the Mars media business, I got all the mundane jobs, one of which was feeding the monstrous computer – the size of an acceptable Winnebago”
The driving force for this was Mars Inc., a big client which was demanding advertising cost efficiency from the new and curiously powerful medium of commercial television.
As the lowest grunt on the Mars media business, I got all the mundane jobs, one of which was feeding the monstrous computer – the size of an acceptable Winnebago.
While I wondered why I was not enjoying the glamour of advertising that I had envisaged, I came into contact with the top dog of the agency’s newly established computer department, one Bernard Shuck. He seemed an affable fellow, so I confided in him that the computer print-out being disgorged by the ream daily from the monster machine was being rudely disparaged as incomprehensible by my confreres in the media department. To my surprise he concurred, and there began a friendship as he completely revamped the output that chuntered out daily from this whirring monster.
As Bernard achieved this minor miracle, I graduated to the poorly paid role of buying high-priced television spots for our clients.
In late 1967, I got a call from one young Chris Ingram, then at the up-and-coming agency KMP. After interviewing with this keenly studious fellow, I leaped at his offer of employment. However, on arrival at KMP, I discovered that its embryonic computer system was even more rudimentary than the early Bates model.
The reaction to my observation was nothing but hearty encouragement from Chris Ingram, Mike Gold, and the agency’s CFO, Richard Sidley. Such endorsement was new to me, and rather daunting. While I was told to go fix the problem, my persistent lack of understanding of computers was something of a handicap.
After floundering around for some time interviewing IBM types who spoke a foreign language, desperation led me to the audacious. I called my friend Bernard Shuck, and asked if I might rent his computer time at night, to service KMP.
Rather than killing the dumb idea of sharing a prized asset with a competitor, I found myself back at Bates to explain my request. Fortunately, Bernard and the other directors thought that amortising a significant overhead had merit. Bates duly spun off its computer department as a new profit centre and ‘Tempo’ was born, with KMP as its first client.
While one thing tends to lead to another, I was nevertheless shocked when, a year or so later, I got a call from Bernard, who suggested that Bates might like to set me up in what would be the UK’s first media-buying business!. Apparently, the UK directors of Bates had learned that Sam Vitt, the former head of the media department at Bates New York, had just resigned to start an independent media-buying company. While others were wringing their hands, the entrepreneurial bosses of Bates in London thought that, as Tempo could handle all the back-room stuff, all they needed to launch a serious competitor to any upstart media service company was the “front of house” media buyer element – aka me!
“How could any agency rebalance its expenses when creative directors and account executives still dominated the payroll? They had a point”
In discussion with Bernard and his backers, two inhibitors quickly dampened the prospect of my launch atop the missile of Britain’s first media specialist. One issue was that Bates did not want to use its own clients to try anything that might become financially counterproductive, and the other was that no one at Bates had any idea what financial model worked for such ventures.
It was made clear to me that the limited agency funds hitherto spent on media departments would be insufficient. It might have been enough in the era of print media, but it was woefully inadequate for the broadcast age. However, how could any agency rebalance its expenses when creative directors and account executives still dominated the payroll? They had a point.
After contemplating these obstacles rather too long, I had only one idea – I fell back on my colleagues at KMP. Thus I was to make a rather implausible case to David Kingsley, with a certain Michael Manton at the next desk, that KMP should unload part or all of its media department to a new venture, owned by Tempo, that I would run. However, the agency’s financial imperative to control the huge majority of income associated with the purchasing of advertising – rather than its creation – meant that this concept was DOA, at least for a while.
By now, I knew that purchasing media was where the money was, and that no agency would want to forego that gravy train if this could be avoided.
Apparently I needed to be independent to succeed, but I had no money, and little confidence that I could go it alone.
So the trail went cold for a while, and in 1970 I moved to Ogilvy & Mather, then one of Britain’s biggest agencies. On my first day in that sterile Victorian décor, I realised how stimulating KMP had been. I couldn’t wait to correct another apparent career mistake, but first another piece of fortune came my way. A major British broadcaster, London Weekend Television (LWT), was on the verge of bankruptcy.
While at KMP I had made friends with Ron Miller, now the effervescent LWT sales manager struggling to keep the station afloat. Ever enterprising, he suggested to me that if I could come up with a sizeable chunk of O&M’s total media spend for the region he would let me pick whatever airtime I wanted on the station. The main flaw in the proposition was that LWT was licensed to operate only on weekends. This logically limited my potential largess. I also had to get a sleepy O&M to do something unprecedented.
Fortunately I worked for a rather cerebral media director, Mike Chapman. He thought the idea grand, and encouraged me not to worry too much about the investment limitation posed by the LWT franchise; but then I had to sell the idea to my fellow media buyers in the agency, whose clients’ money I would be risking.
Being somewhat reluctant to commit both O&M and my career to such a wild scheme, I pushed LWT to breaking point before agreeing to make perhaps the single biggest media purchase in the industry’s history. I committed almost half of O&M’s annual media spend for the region, worth several million pounds, and did indeed get first pick of all LWT airtime. I was 22 years old.
Managing the LWT deal turned into a full-time job for me, while I waited for the wheels to fall off. They never did, but word began to leak of the deal and the reluctant buyer behind it.
Coincidentally, an outrageously ebullient character in the form of Peter Simpson had arrived in London from Canada. He had promised K-tel, the Canadian marketer of a supposedly indispensable lint-removing brush and other gadgets no one thought they needed, that he would commit to a business in London to buy its advertising media. K-tel had little to lose.
“Media was emerging from the umbra of agency creative, and agency media directors were driving Porsches too”
After being rejected by more than a few agency media luminaries, Simpson finally found Paul Green, a brave soul willing to jump into the unknown with a Canadian partner who by now had made himself thoroughly unpopular within the UK media establishment. And so Media Buying Services was launched in Britain in 1970, on the back of K-tel. The timing was perfect. Media was emerging from the umbra of agency creative, and agency media directors were driving Porsches too.
Once K-tel had sold too many plastic brushes to unsuspecting Britons by means of unprecedented saturation levels of TV advertising, they turned to Europe. Paul Green was asked to help do the same mega TV media buying in Germany and France. Somewhat overstating a claim of MBS’s expansion to Europe, Paul packed off Carol Foster, an adventurous media buyer, to place K-tel media in both countries.
While finding O&M stultifying, I had no great wish to get involved with an outfit that was roundly disparaged by the agency community. Nevertheless, after MBS had been going a year or so, and after considerable badgering by Craig Pearman, then sales manager at LWT and a significant kind stranger to me, I agreed to meet with Paul. To my surprise, I was overwhelmed with his inexhaustible enthusiasm and obvious media-buying competence. With some trepidation, I joined MBS in 1971, somewhat assuaged by my backstop of the putative Bates offer.
That Christmas, at the end of a raucous MBS party for sales reps on the Sloop John D – a trendy venue on the Thames – a rather inebriated Simpson told me that I was going back to Canada with him. Ostensibly this was to learn all I could about the commercial radio business in North America, before returning as a purported expert on the newly licensed commercial radio business in Britain. This man was never short of big ideas, but Peter did have an ulterior motive, as I was to discover later.
Curiously, Peter neglected to tell Paul of his plan – a characteristic that he would inflict on me in later years. Not surprisingly, Paul was furious when he found out that he had been raided from the inside! Nevertheless, I was to set foot in my first Canadian snow bank in January 1972.
First footing in Canada
To my chagrin, MBS Canada was located in an industrial plaza on the outskirts of town, and was a whole lot smaller than I had been led to believe. I thought my move might be another huge mistake but, being young and single, I didn’t have much to lose from a self-imposed exile. I did the rounds of bemused radio stations in Canada and the US, learning what I could about their operations. I also found myself putting out fires and bringing some order to a chaotic MBS office.
After three months in Canada, Peter formally gave me the job of running MBS, with a reasonable stake in the company to keep me on board, and with it the promise of an uncertain future.
Coincident with my arrival, one small agency client of MBS had just been awarded the multimillion-dollar Ontario Tourism account, ostensibly as a reward for services rendered in getting a new Tory government elected in Ontario. This proved a stroke of fortune for MBS, and arguably all who sailed with her.
In addition to providing significant income with which to properly fund the fledgling business, I became entrenched in the election campaign committees of various provincial Conservative Party regimes, and at the national level. Whenever and wherever an election was called, my task was to plan and execute the requisite advertising media buys.
One of my earliest clients in Canada was a new kind of movie company, by the name of Pacific International Enterprises. This movie producer specialised in making low-budget family-oriented movies, and then advertising at saturation levels on TV. The intention was to drive TV’s family audience to see a rather innocuous wildlife movie in cinemas whose management had been sent on holiday for a week or two. These entrepreneurs were known as “four-wallers”, because that was all they needed! And very successful they were.
Then came an English firm, Marshall Cavendish, a publisher which also knew the power of TV advertising. This company had the novel idea of advertising the first issue or two of a collection of publications at saturation TV levels. Once a subscriber had a few editions, it was hoped they’d be locked in to buying the complete series.
These masters of saturation TV advertising, such as K-tel, the four-wallers and Cavendish, clearly understood the value of top media buyers, and were willing to pay handsomely for such expertise.
At that early time, two other kind strangers encouraged and supported me. One was John Foss, head of the Association of Canadian Advertisers. In 1974 or thereabouts, he invited me to publicly debate the merits of independent media services with Tony Miller, the well-respected CEO of the largest agency in town and a charismatic and formidable opponent. The hotel auditorium was packed for the showdown, and I was acutely aware that most advertisers present were firmly committed to full-service agencies. I made my case first, to a surprisingly positive audience reaction.
When Tony spoke for the ‘full service’ motion, he was heckled and harassed. Clearly the advertisers present were sending a message to the agency community. The motion in favour of independent services was carried! Although the message was serious, it was all communicated in good humour, and Tony and I became good friends from that day on.
“The TV marketing map of Canada was no longer full of overlapping territorial claims or worrisome geographic holes, like the maps of those real early pioneers”
The second kind stranger of the day was Peter Jones, CEO of the industry’s non-profit audience measurement cooperative. He invited me to join the board when it was still the fiefdom of the top industry players. He subsequently nominated me as chair of a most controversial and financially critical committee. Its purpose was to adjudicate discrete boundaries of TV broadcast coverage beyond the obvious urban areas. This would provide marketers with specific geographic envelopes within which to plan and assess the effects of their TV advertising. Peter Jones placed enormous faith in this young upstart to weave a way through a minefield of politics and practicalities. Extended Market Areas (EMAs) were finally introduced, and the TV marketing map of Canada was no longer full of overlapping territorial claims or worrisome geographic holes, like the maps of those real early pioneers.
Peter would later nominate me to chair a crucial endeavour to introduce passive measurement of broadcast audiences in Canada by means of attaching electronic measurement transmitters to TVs and even radio devices. Despite many false starts, my dedicated committee of broadcasters, advertisers and agency representatives would eventually succeed in bringing far more reliable audience measurement to broadcast advertising in North America.
By now a big client of mine was Sunn Classic Pictures. This was another successful four-wall movie company that, with Schick Razor, was owned by the wildly entrepreneurial Patrick Frawley. Following successes in North America, Frawley saw no reason not to launch in Australia, with a massive TV launch budget potentially available for MBS to capitalise on.
The first catch came when I discovered that MBS had already been established in Australia by an enterprising young British expat who had witnessed the birth of MBS in London. Furthermore, he had become moderately successful, with offices in both Sydney and Melbourne. I had to go and repatriate our brand name, and simultaneously launch a movie.
First, I did the rounds of enthusiastic clients who were effusive about my arrival and promised business that would help ameliorate a perceived problem of high-handed media owners. With the quiet acquiescence of the agency community, the media owners appeared to control the marketplace. To complicate matters, cross-media ownership was very much the norm in Australia at the time.
I was soon to experience considerable intimidation from some within the broadcast community who were resentful of my potentially destabilising intrusion. Nevertheless, I had to launch a movie with a big ad budget. The next roadblock was finding out that the broadcasters association demanded that MBS come up with a $1m bond as security in order to do business. This was not friendly territory. With some trepidation the million-dollar bond was posted, and innate greed suspended broadcaster hostilities for a while.
Turning my attention to the matter of repatriating MBS ownership, it became clear that the enterprising local owner was only too keen to get out of this hostile business environment. This was good news, but I needed a big name on board, with abundant courage to challenge the apparent media owner clique.
“I thought I had my man, particularly when he invited me to explain to his wife why he might chuck in a prestigious and well-paying job at the agency to risk all on a mad crusade”
That recognition led me to Dennis Merchant, the media services director of O&M Australia. After numerous discussions, I thought I had my man, particularly when he invited me to explain to his wife why he might chuck in a prestigious and well-paying job at the agency to risk all on a mad crusade. In the end he demurred, and I reluctantly abandoned our expansion below the equator. MBS Canada was growing at such a pace that it required my full attention.
My antipodean endeavours were nevertheless acknowledged when I was subsequently invited to join a Royal Commission that the government in Canberra was setting up to investigate media owner trade practices. Much as I would have enjoyed the challenge, sanity prevailed; the commuting distance was just too great.
A year or so later, I was perhaps the only one who was not surprised to learn that Dennis and a colleague were to start what was to become the first major independent to stay the pace in Australia. With Merchant’s credentials, a vibrant independent media business blossomed in that country thereafter – while MBS faded away to become an obscure footnote in local history.
Back in Canada, I continued to build our business. Early large clients included Michelin Tire, Playtex, Bic Pen, Clorox, Estée Lauder, Twentieth Century Fox, and several notable government accounts. We also represented giant retailers such as Dominion Stores, Canada’s one-time dominant supermarket chain. Then came Eaton’s, Canada’s largest department-store chain.
With MBS by now well established, there was no relevant role for a controversial maverick such as Simpson. He decamped to California in 1975 to front a struggling MBS office that he had somewhat impetuously agreed to open a year earlier. True to form, he took with him my most valued colleague, Andrew Butcher, to run the business, neglecting to ask me beforehand.
Andrew and Bruce Milner, a charismatic Kiwi who had previously been with JWT in London, set about building a going MBS concern in California based on Sunn Classic and Schick, and a growing roster of local and regional clients. Once again Simpson found himself increasingly irrelevant, and so – as only he could – he talked himself into the movie-making business. As he confided in me, he thought this sector was far more conducive to his ebullient personality. He was right, and went on to enjoy some modest movie-making success.
Notwithstanding Simpson’s foray into movie-making, Paul Green continued to pressure him to establish MBS in New York. The growing success of MBS in Canada and on the West Coast meant that further expansion seemed feasible. Simpson couldn’t resist a dare, no matter how daunting.
“Things were beginning to falter in London. As business in North America grew, Green was increasingly isolated in the UK”
In 1976, we sent Matthew Bryant – a young recruit of mine from the UK – to establish MBS in New York. However, while 1970 had been the right time to launch MBS in Britain, this was not a good time or place to open another office. On one hand, the big agencies and major clients remained enmeshed in all-too-cozy relationships that the dominant TV networks had cultivated with them. On the other hand, by the time MBS was launched, the New York agency establishment had done its best to denigrate the concept. Nevertheless, Matt Bryant would eventually succeed in pushing MBS into the growing ranks of trusted independent services, and began to produce a viable business.
Meanwhile, things were beginning to falter in London. As business in North America grew, Green was increasingly isolated in the UK. Perhaps fearing a coup, Simpson had always done his best to keep the operating management of MBS offices at a distance from each other. Whatever the reason, I believe that Paul’s growing isolation precipitated his increasing disinterest in the business. A sense of mistrust developed and eventually I learned that a frustrated Paul Green had sold his stake in MBS back to Simpson, to fund the launch of a restaurant in a fashionable part of London. Sadly, a very competent, if eccentric, pioneer gradually faded from sight.
As MBS grew on the West Coast, Simpson developed a similar sense of mistrust of Andrew and Bruce. They became increasingly harassed for what seemed to be no apparent reason. Finally exasperated by such badgering, Andrew and Bruce resigned, and set up International Communications Group (ICG) in 1979.
At the heart of Canadian politics
Throughout my early years in Canada, I had remained involved with both provincial and national Tory party election campaign activities. In 1978, this led me to meet Lowell Murray, the federal party’s campaign manager and a significant kind stranger to me. He took me under his wing and made me famous, but not in the way that I had imagined.
For the Tory national convention held in Quebec City that year, I had to orchestrate a substantial AV package to get several thousand delegates hyped about an upcoming election. We were introducing a brand-new Tory leader, the unassuming and un-athletic Joe Clark. Our task was to challenge the charismatic and world-renowned Pierre Trudeau – an unlikely match.
Coming from a small town in Alberta, Joe seemed to base his wardrobe on price rather than style. Before his debut at the national convention, it fell to me to take the new Tory leader to my favourite Toronto menswear stores and replace his wardrobe. For good measure, I also persuaded him to change his rather uninspiring hairstyle.
On the opening night of the convention, while I was nervously hovering over the AV crew, Joe’s chief of staff came along and introduced me to a reporter. Thinking that this must be a friend or tame journalist, I chatted with her for a few minutes.
As I was making my way to the convention centre the next day, I found more and more delegates complimenting me on a great news story that had appeared in the nation’s press. I began to feel increasingly uneasy.
I was due at a meeting with the party leader, so headed straight there with some foreboding. On my arrival Clark tossed a newspaper to me with the tart observation that I had got more press than he! A large banner headline ran “The man behind Joe Clark”! There followed the story of the “Tory whiz-kid” remaking the man. Not my best day!
“I recruited a few ad agencies that I thought would understand our challenge of instilling voter confidence in this largely unknown prime ministerial candidate”
Despite this fateful event, Lowell continued to embrace and encourage me. With his complete trust, I recruited a few ad agencies that I thought would understand our challenge of instilling voter confidence in this largely unknown prime ministerial candidate.
The ensuing federal election in 1979 proved an extraordinary event when we succeeded in getting Joe Clark elected as the first Tory prime minister in Ottawa after a decade of “Trudeaumania”. Despite achieving a minority government, Joe immediately announced that he would govern as if he had a majority ¬– a comment that would later cause me some grief.
As a result of my involvement, Lowell ensured that I was given the mandate by our new PM to review all federal government advertising spending, with all budgets frozen pending my approval. This mandate included vetting all suppliers and awarding contracts to rather stunned ad agencies.
I was also asked to devise a process to consolidate the media purchasing of the multitude of hitherto uncoordinated government ad campaigns. As a result, MBS was authorised to manage and implement the entire government media spend. This vast undertaking was to spend almost three times as much on purchasing advertising media as the next biggest spender in Canada (P&G)!
When announced by the PM, the major advertising trade publication of the day ran a feature article on me capturing the industry’s rude discombobulation with the banner headline “Swain: That’s Who!”
Sadly, my government patron couldn’t distinguish minority from majority, and Trudeau was brought back from retirement to challenge the upstart. Within a year the government fell, and with that my vaunted role was hastily terminated “at the Queen’s pleasure”, as I was informed. I chose not to pursue the invitation to sue HM for breach of contract.
Unravelling this dedicated undertaking with upwards of 30 people and three offices was expensive. Nevertheless, I did my best to retain all employees who came on board for this adventure. Fortunately MBS continued to grow, with the combination of top talent and a buying power argument that now really resonated with advertisers.
While business and public recognition was increasingly coming my way, perhaps my most noteworthy accomplishment was not gaining a huge client, but rejecting the prospect of the largest media account in Canada.
In 1984, Brian Mulroney was elected as a rather more promising new Tory prime minister. With the return to power of a Conservative party it was naturally assumed that the government’s media business would be repatriated to MBS. After all, we were the party’s long-standing supplier of choice and had purchased all media for this and all previous Tory campaigns since my earliest national campaign involvement in 1972. More significantly, I had set up the government’s advertising oversight department during the short tenure of the previous Tory PM. No one had better credentials for this assignment.
“With some foreboding, I reluctantly withdrew from further consideration for the biggest account in Canada, and kept my head down”
However, when a political emissary was dispatched to suggest that I might receive the government contract, I was distressed to learn of proposed strings attached to the offer that I considered unacceptable. With some foreboding, I reluctantly withdrew from further consideration for the biggest account in Canada, and kept my head down.
When news of my curious withdrawal circulated, the national press suspected foul play. Again I found myself the subject of embarrassingly large front-page headlines. An enterprising reporter from the Toronto Star, Canada’s largest-circulation newspaper, had obtained from a well-connected source some surprisingly revealing details of the proposition that I had been asked to accept.
Despite being praised in some quarters as an honourable soul for rejecting the proposed terms of this most significant account, being hounded by the press to expose a potential political scandal was a nerve-wracking experience for me. So were unsubtle and unnecessary hints from my friends in Ottawa to keep my mouth shut. Needless to say, no more well-heeled Tory dinners for me.
Coincidentally, Simpson returned to Canada from now less successful movie-making in California, apparently sensing an opportunity to ingratiate himself with my former Tory friends. Eager to pick up where I had left off, Simpson agreed to relinquish his remaining stake in MBS Canada to me.
Voice of the industry
As a result of such national press attention I found myself on the “go-to” list of journalists across the country. At first I was asked about things political, but was soon being asked to comment on subjects rather far from my sphere of expertise. Inadvertently, I soon became the voice of anything remotely to do with business, and was the frequent TV “talking head” providing supposed context for events of the day. My only real expertise of being reliable to show up became the qualifying criterion.
Despite such publicity and the increasing market dominance of MBS, the ad agency association in Canada continued to disparage the concept of independent media services. Needless to say, we were vociferously prohibited from joining this imperious club. “With members like that …” I remained relieved!
However, this blackballing backfired rather alarmingly a few weeks before a major advertising congress sponsored by this agency association. The main advertising trade magazine in Canada thought a speech that I had given at a recent conference of broadcasters – entitled “Advertising isn’t working” – was worth publishing verbatim.
My intent had been to wake up the broadcast community to be more accountable to a new breed of discriminating advertisers who rightfully needed some assurance that their message was really reaching the appropriate consumer target, at the right frequency.
I suggested that all media owners needed to move beyond the vague promise of reaching an advertiser’s desired target audience by buying vast quantities of media on a mere hunch that a prospect might be lurking among the masses. I maintained that this was primitive fishing, not farming.
“I suggested that advertisers would soon discover more accountable and efficient means to reach their prospects if media owners continued to sit on their hands”
With the fragmentation of audiences that resulted from the proliferation of TV media channels, I suggested that my chance of reaching my target prospect might be getting smaller, while my chance of alienating such fragmented audiences – by repeatedly hammering home the same annoying message – was increasing.
I suggested that, as a consequence of a grossly inefficient advertising process, the advertising industry might be sowing the seeds of its own destruction by teaching its customers to ignore advertising, as consumers endured the overwhelming litter of irrelevant or annoying ads. I further suggested that advertisers would soon discover more accountable and efficient means to reach their prospects if media owners continued to sit on their hands. Advertising wasn’t working!
How was I supposed to know that the imminent and glitzy agency-sponsored congress was brightly titled “Advertising works”?
I had to endure castigation from the agency association’s head, who thought it necessary to harrumph in print that I and others like me were “parasites on the industry”.
While shut out of the agency community, I continued to find myself uniquely welcome within the Association of Canadian Advertisers (ACA), often joining their board meetings, and representing the association’s viewpoint on critical occasions.
The ACA had enthusiastically endorsed my role in introducing electronic measurement technology to broadcast media. Now this group asked me to represent the advertiser sector when Canadian magazines tried to orchestrate trade-barrier legislation to block American magazines coming into Canada. This politically sensitive issue of protecting domestic culture made for a delicate dance, involving protection for some while denying it in sectors where no Canadian publication had yet ventured.
However, perhaps the most pertinent issue on which the ACA asked me to represent them surrounded the topic of financial liability.
I had alerted the ACA to a clause discreetly inserted in the fine print of the broadcaster sales contracts with ad agency buyers. This empowered broadcasters to charge an advertiser for airtime purchased if its agency had defaulted, even if the advertiser had paid the agency. With potential exposure to the risk of having to pay twice reverberating among advertisers, a big-league summit was quickly convened of all the relevant parties.
As if at a bad wedding, some 200 senior executives divided themselves, advertisers and their agents on one side of the aisle and broadcasters on the other.
Asked to speak on behalf of the advertiser community, I asserted that the term “ad agency” was an anachronism from the days when newspaper owners needed an “agent” to produce the ad for the space that they had sold to a prospective advertiser. I noted that agencies provided goods and services and therefore must be considered as suppliers like any other. Surprisingly I had found only one precedent in North American case law – in Miami, Florida – to support my argument that advertisers were not responsible for making good on their failed supplier’s debts.
With lines drawn, the meeting quickly turned into an acrimonious debate, with one broadcaster ferociously lunging at me across the aisle, exclaiming “it’s our money”.
“Broadcasters suggested they should abandon the tenured system of agency commission entirely, and henceforth bill advertisers direct. That got everyone’s attention”
Broadcasters were quick to lambaste agencies for sitting on funds paid to them by their clients but owed to media suppliers. Professing shock at learning of this apparently prevalent agency practice, one major advertiser then advocated an escrow arrangement to ensure broadcasters were paid in a timely manner, and thus eliminate the risk of agency default. Clever fellow! Agency representatives were dumbfounded at the prospect of losing control of this most lucrative of income streams.
With perceived advertiser encouragement, broadcasters then suggested they should abandon the tenured system of agency commission entirely, and henceforth bill advertisers direct. That got everyone’s attention – especially those representing agencies.
Trying to get things back on track, the meeting’s chairman asked the high-priced lawyers in attendance to weigh in on the issue. At length, the legal eagles unhelpfully concluded that if an advertiser’s supplier embraced the word “agency” then it must be considered an agent. The advertiser was therefore indeed responsible for its agent’s behaviour, and liabilities. As if to mitigate the obvious agitation of the advertisers present, the lawyers went on to opine that – by definition – an agent clearly had a fiduciary responsibility not to profit outside of its prescribed financial arrangement with the advertiser.
The broadcasters were delighted, while agency representatives mulled over the apparent legal preclusion from engaging in any financial arrangements that were not fully disclosed to their clients. In this ruling, non-agents – such as independent media buyers – were free and clear to protect advertisers from such dual-liability exposure, and to engage in fiscal arrangements for their own interest that need not be disclosed. Not surprisingly, perhaps, it would appear that this profound opinion has been studiously ignored ever since.
From hare to hound
Perhaps as a result of the publicity surrounding this and other such high-profile events, I began to receive acquisition proposals.
The first was from a group of second-tier agencies that I soon discovered were intent on closing MBS and repatriating our clients.
The first serious enquiry came in the late 1980s from WPP. After some due diligence in Toronto, I met with Martin Sorrell in London. While most affable and enthusiastic, he rather implausibly allowed that he never paid more than eight times earnings for such an acquisition. Nevertheless, he did suggest that he clearly understood that media was where the money was, and professed disappointment that he could not get his agency heads to recognise this reality. However, feeling that I’d just met the fox in the hen house, I decided to get a little more knowledgeable before getting into bed with anyone.
The next serious buy-out enquiry came from Roger Parry, a charming and very astute executive of Aegis Plc, whose operating subsidiary was Carat – already a well-established media service entity. Roger had investigated the North American market thoroughly for Aegis, and concluded that Carat should make its North American debut by acquiring all MBS offices, starting with Canada.
In this courtship, I was invited to tour the Carat offices in Europe. In France I met the Gross brothers, then the financial engine of Carat, and which was coming under fire from disgruntled agencies for market dominance. On my enquiry, Gilbert Gross gave me a proud discourse on the financial benefits offered by certain advertising media vendors. These garnered special trade discounts based on the aggregate volume of spending of all Carat’s clients. While such volume discount deals are indeed endemic to retailing, this was uncommon practice among media owners. In passing, Gilbert also confirmed that a number of major international agencies had formed media cartels in France to benefit from such potential rewards of scale.
Before a deal with Aegis went much further, however, negotiations mysteriously ceased. I assumed some shake-up had taken place within Aegis but was never told any more than that Roger Parry had left.
“I was told in no uncertain terms that my attitude made me unworthy of becoming part of Carat, and he stormed out of the room”
Eventually, the game was on again with Aegis and I was summoned to London to meet David Reich and Peter Scott. In classic British style, I had a pleasant breakfast with Peter in one of the finer hotels in Knightsbridge before business ensued. When Scott joined David Reich and me at Aegis, we again exchanged pleasantries. However, when I demurely suggested that – with all their connections – Aegis must be well prepared to address the looming prospect of French legislation that might impinge on the volume discount entitlements apparently enjoyed by Carat in France, Scott threw what I perceived to be an extraordinary temper tantrum.
I was told in no uncertain terms that my attitude made me unworthy of becoming part of Carat, and he stormed out of the room, leaving a square-mouthed Reich to escort me in silence to the elevator. Without apology or explanation, I flew back to Canada.
The next and most intriguing suitor was Dentsu, the dominant Japanese agency and then the largest agency group in the world. The chairman of the international division of this agency had previously arranged for me to obtain a substantial portion of the Toyota media business in Canada, and we had got to know each other well. While I danced around a rather woolly deal with Dentsu, I became a friend, confidant and admirer of the various Japanese business leaders that I came to encounter through my relationship with Dentsu.
No plausible acquisition offer ensued but, as a consequence of our association, I was subsequently asked to attend a special Dentsu board meeting in London. The focus of the closed-door session was to explore ways that Dentsu might expand from its Asian dominance to become a true global player. This was big-league stuff as board members considered major agency acquisitions.
When my turn to speak arrived, I noted the rise of two phenomena and delicately suggested that the traditional ad agency paradigm might become vulnerable. I noted the freedom that advertisers now enjoyed to employ independent experts to guide them in the expensive and prodigious new world of advertising media choice. I further observed that we were on the cusp of a new digital age of communication wherein I supposed that clients would increasingly gravitate to the more accountable world of Internet-driven media advertising. I also speculated that advertisers might devise more economic means of communication with their customers via the Internet or perhaps by establishing a direct communication chain by means of attaching electronic markers or other such devices to follow the path of their goods or services directly to their customer. There would be no need for expensive ad agencies or inefficient advertising media in this scenario.
I wondered aloud if the sunny days of traditional agency reliance on high-priced creative teams making expensive and lucrative TV ads might be sustainable and, with as much deference as I could muster, suggested that in any event the very deep pockets of Dentsu might not match those of the avaricious WPP.
I cautiously recommended against a big agency name acquisition – to a surprisingly attentive audience. Uncertain whether or not the attention was benevolent, I recommended that the board explore the acquisition of a media service group such as my temperamental friends at Aegis.
“My clandestine Dentsu suitor eventually told me that a prospective deal had been abandoned for the most personal of reasons”
Somewhat to my surprise, my impolite commentary was met with nodding endorsement from the board, and my clever chairman friend was authorised to begin the courtship.
While I was obviously not privy to the encounters that followed, my clandestine Dentsu suitor eventually told me that a prospective deal had been abandoned for the most personal of reasons. He confided that he was embarrassed to learn of the compensation levels enjoyed by Aegis board members. These were exorbitant by Japanese standards. My prospective dealmaker was aghast at the offer to meet an Aegis director at his chateau! I happened to have met this particular director and knew him to be a most courteous and pragmatic Frenchman who might easily have won over my reluctant friend. If only I’d been a chaperone, I might have averted this all-too-human impediment to a deal. While it took a good few years, I was nevertheless intrigued when Dentsu finally consummated a deal to purchase Aegis in 2013.
Following this curious escapade, the fun really began for me in Canada. First I was approached by JWT, and then together with O&M. The proposition was to somehow merge our three media groups. This was followed up with serious meetings in New York, but interest was finally exhausted when all the inherent complexities of competing clients and personnel issues were examined.
Then the really big idea came about. My good friend Tony Miller, CEO of MacLaren McCann, invited me to the first of numerous secret meetings. To my surprise, the CEOs of JWT, O&M and BBDO were also there. I knew all these colleagues well, so our meetings became quite jovial as the proposition of a joint media-buying consortium was being fleshed out. All were on board with creating a buying machine that would control perhaps two-thirds of all agency media spending in Canada. But all were equally vague on how best to achieve this end.
I was a little worried that such a dominant entity would run afoul of government Fair Trade practices, but this was lost in the giddy prospect of pulling off such a game-changing achievement.
Unfortunately, before we could get this monster of monsters off the ground, two of my most ardent co-conspirators were promoted to run their respective US agencies. My remaining cohorts then retreated into their own corporate hierarchies.
Time to get back to the real world!
After enjoying the respect and great friendships born of the ACA, my role as advertiser advocate was kindly acknowledged in 1995 with a Gold Medal, and the accompanying citation for “significant contributions to the Canadian Advertising Industry”. My role in introducing the independent media service sector to Canada was duly included in this citation.
Similarly, I was honoured when I was elected chair of the advisory board of a new School of Retailing established within two prestigious Canadian universities. The major sponsor of this initiative was Eaton’s, my client and the pre-eminent department store chain with a 160-year history in Canada. Unfortunately, despite its heritage, the company abruptly declared bankruptcy a year later. Bad timing. While this possibly provided a core lesson for the business school, the Eaton name, and later my role, was quietly exorcised from academia.
When the first of the agency-owned media service brands launched in Canada in the form of Initiative Media, headed by the well-respected Media Director of MacLaren McCann, I sadly acknowledged that the agency world was coming full circle. After losing exclusive control of the media service component to independent service groups like mine, agencies were now busy repatriating the sector. I wondered if advertisers would once again be the losers.
Unfortunately for us, this new-found competition – invariably unfettered by a profit motive – discounted their services in order to gain business. It was apparent to me that agencies had yet to realise the value of top-notch media service professionals. I also noticed that these supposed new competitors appeared to remain focused on upstream strategic and tactical planning initiatives, while continuing to neglect the pragmatic platform of media purchase cost competitiveness that was the founding premise of independent media services.
“I was keen to explore the concept of advertising exposure optimisation that was possible with the increasing capabilities of computer technology to embrace such valuable audience analytics”
Nevertheless, with such increasing competitive emphasis on both strategic and tactical media analysis, I recognised that I would become vulnerable to the deep pockets of big international agencies. Deep pockets were going to be needed if the competitive battleground was going to shift to mastering the vagaries of new media consumption patterns. This was particularly plausible in North America, with its quantum leap in TV channels to a mind-numbing universe of a thousand or more offerings.
My biggest concern with the proliferation of media vehicles was that of correctly reaching my target audience. I was therefore keen to explore the concept of advertising exposure optimisation that was possible with the increasing capabilities of computer technology to embrace such valuable audience analytics. However, I knew that one day I’d be outspent in this costly analysis by the global agency conglomerates. It was time to sell.
The game is on
I considered my options, and thought my best avenue might be to approach top management-consulting firms, such as McKinsey or Deloitte. Such companies were already developing lucrative consulting businesses, often involving marketing. I figured that they would appreciate the numbers game of media, and readily understand that media advertising was where the money was.
However, before I could test this proposition, Aegis returned with another push for a North American presence. The public company had boldly promised investors that it would be billing some $2bn in North America within two years.
Contrary to my earlier excursions with Aegis, the newly incumbent management elected that MBS in New York should be their first acquisition in North America. While New York offered letterhead cachet, the acquisition in 1996 provided only a modest contribution to the annual billing goal that had been promised to the City.
Aegis then turned to MBS in Canada, with its notably greater billing, offices in Toronto, Montreal and Vancouver, and significant industry recognition. Negotiations proceeded with a rigorous due diligence, chipping away at our perceived value at every opportunity. I didn’t like this seemingly penny-pinching approach, but figured that if a deal was to be done I’d hand them the keys the next day.
However, when the final deal was only a week or two away from completion, I got a call from Grey Advertising in New York expressing interest in an acquisition. As MBS was substantially larger than Grey in Canada, I was not particularly impressed with this notion, or its last-minute timing. Nevertheless, on learning of the urgency, Grey immediately invited me to New York. With growing disaffection toward Aegis, I decided to explore this unlikely option.
I first met with Alec Gerster, the agency’s disarmingly affable head of media services, who I liked immediately. His colleague, Jim King, then proudly demonstrated a media optimisation software package developed within the agency. This seemed to answer my needs in Canada. Next I was to meet Steve Felsher and Ed Meyer, respectively COO and chairman of Grey Worldwide. Both were exceptionally cordial, and their obvious enthusiasm for an acquisition provided a compelling contrast to the insensitive bean-counting of Carat’s approach.
Very soon thereafter, with due diligence limited to noting my phone number, Steve came to Canada with the promise to beat any other offer, on condition that I parked the Aegis deal for a month.
“No quibbles, no hassles – the deal was to be done”
With “bird in hand” top of mind, it was with some trepidation that I asked Aegis for a hiatus. After all, Grey had not given me anything more concrete than a handshake and a verbal promise. Predictably, Aegis’s management were incandescent, suddenly recognising that they might lose a big component of their bold promise to their investors of a quick North American conquest.
Within a few weeks Steve presented Grey’s offer to me, constructed by means of considerable back-channel feedback in the interim from an aggressive M&A consultant that I had retained. The offer contained everything that I had wished for, including price. Most especially, it met my demand that the sale be portrayed as a joint venture. I wanted this to keep my domestic clients happy.
The proffered dowry of adding Grey’s Canadian business to mine – as a potential platform for me to launch Mediacom in North America – was also not lost on me. Aegis was now far from competitive in price, and had nothing to offer in the way of the instant incremental growth inherent in the Grey deal.
No quibbles, no hassles – the deal was to be done.
This obvious goodwill and trust extended to the closing in Toronto, wherein Steve and I were supposed to sign each page of the mountain of documents. After one look at the forest before us, Steve asked if I would be agreeable to signing only once, on the last page. Both sets of lawyers were nonplussed, but Steve and I agreed; had a good lunch; and then came back for a two-minute signing ceremony.
Once the purchase proceedings were completed, Steve volunteered that he had already gained a major return from Grey’s investment in MBS. I was immediately concerned that I had missed some significant financial asset in the sale, but Steve jovially explained that, while the deal had been predicated on tangible assets, potential revenue streams and some vague notion of “goodwill”, he had discovered the unforeseen value of the business philosophy that was inherent in our sophisticated business operating systems and management regimens.
He was impressed with our obsession with maximising financial opportunity and our sensitivity to money management. However, he was most enthusiastic about our clear business growth focus and the personnel performance principles that I had managed to instil throughout our organisation.
He allowed that these principles and practices were far superior to those in any Grey Global entity, and suggested that he would send all prominent Grey management to Canada to learn about our practices. This was not to happen, of course; who would acknowledge such pre-eminence in America’s attic? Nevertheless, this was high praise from someone who I had come to respect greatly.
Doubling down and left alone
With the deal done, I was keen to launch a sister brand not only to house the Grey accounts but also to provide a solution to the increasing limitation on our growth posed by concerns about servicing competing clients. We already had rather too many supposed account conflicts that our competitors were eager to point out! A sister venture would, I hoped, also provide the first North American platform for clients of MediaCom in Europe.
However, there was one significant catch to launching a sibling venture using the MediaCom brand. I was well aware that the dominant billboard media owner in Canada had been using the MediaCom brand name for many years, but no one at Grey thought this a concern. I was advised to name the entity something close to MediaCom, but safe.
Sailing rather close to the wind, I delicately branded the new venture The Media Company, with the second word and first few letters of the last word in MediaCom Europe’s colours! There was much squawking from my billboard friends, but I reckoned that they would think twice before suing one of their biggest customers. That was before I learned that Grey had signed an agreement with the other MediaCom never to use the name in Canada! I waited for the shoe to drop.
“I soon received an anonymous brown paper envelope containing a ransom note made up of cut-out newspaper letters”
I soon received an anonymous brown paper envelope containing a ransom note made up of cut-out newspaper letters. The letter said: “Hand over all your stationery or you will never see your dough again”.
I called Brian McLean, the quick-witted CEO of that other MediaCom. For all my protests that two MediaComs would not be confusing in the market, one of my clients had inadvertently sent a sizeable check, due to our MediaCom, to the wrong address! I conceded defeat, with a chuckle!
Only when the other MediaCom was later sold to a new owner – who unwittingly abandoned the corporate name without recognising its value to us – could we use the Mediacom brand name with impunity.
While I was getting to know my new owners at Grey, Aegis found itself hard pressed to meet its North American promise of billing $2bn in two years. It had lost my addition to the club, and only now seemed ready to consider the former West Coast MBS team now running ICG in California.
If I had a good deal with my new-found friends at Grey, my former colleagues at ICG were astute enough to realise that they could name their price. They did, and a deal was done.
Sadly, this was not to be a happy marriage. Aegis appeared to show scant interest in the sizeable regional businesses that the former owners had as their most profitable clients, but also an apparently excessive interest in expense micro-management of their new acquisition. In any event, lucrative clients soon left and – frustrated with the new management – the former owners were allowed to leave shortly thereafter.
Ironically, as confirmed media-buying junkies, my former colleagues set up business again in 2003 as the Milner Butcher Media Group (MBMG), and welcomed back many of those good clients that may have felt overlooked by Aegis.
In contrast to the experience of my friends on the West Coast, life for me continued more or less as before, with no interference from New York or MediaCom in Europe. Mind you, we were delivering healthy seven-figure profits each year, without any exertion from head office! I had agreed to a five-year non-compete arrangement, and welcomed such an avuncular relationship.
Meanwhile, the UK office of Mediacom was proving an embarrassment as an also-ran media service group. Something had to be done.
Most of the top independents had already sold out to agency groups. Just about the only viable contender left was a business run by Allan Rich, and his rising star, Steve Allan. When the German head of MediaCom appeared diffident about such an acquisition, I was dispatched by Ed Meyer to investigate options.
After checking out the marketplace, I met with Allan Rich and Steve Allan. These two had achieved some significant success as an independent media service provider, and I was impressed with their operation, particularly Allan Rich’s similar views that staff represented the most valuable asset – to be coached and cared for. We found that we had independently come up with similar devices to show our appreciation for those who made us great, including both of us, worlds apart, buying a Valentine’s rose each year for every female employee. That was before HR deemed such practice discriminatory.
Back in New York, I recommended the acquisition, and another good deal was done.
“While trying to keep all these plates in the air, my priority was obviously the rapidly growing market in China”
With this acquisition in place, and with a robust North American beachhead now established for MediaCom in Canada, the expansion of MediaCom beyond Europe appeared increasingly plausible. In Asia, agency heads quickly fell in line and branded their media departments as MediaCom. But to the frustration of these far-flung CEOs, no further action followed from MediaCom, or from Grey. It was an empty promise.
As a sop to agency frustrations in Asia, Alec Gerster eventually asked me to take over a hand-holding role as the titular head of Mediacom in Asia. In exploring supposed MediaCom offices in the region, I found a good number of surprisingly talented and eager media personnel. I was hopeful that inroads could be made if only I could get the attention of MediaCom in Europe and persuade Grey to invest in the region.
While trying to keep all these plates in the air, my priority was obviously the rapidly growing market in China. After months of searching, I found a small but well-connected Chinese group that I thought could be trusted as our necessary local MediaCom partner. This was a matriarchal organisation and had only the bare minimum of decipherable financial information. Nevertheless, Grey was amenable to exploring this acquisition, based on my assurances.
Unfortunately, one of the staff of Grey in Asia – who had done his best to frustrate me throughout my Asian excursion – insisted on coming to the pivotal meeting. His brash style quickly offended my guests and the meeting ended rapidly, with many polite Chinese excuses.
I continued to spend an uncomfortable time perpetuating the masquerade of MediaCom as a real entity in the region. I was all too aware of being perceived as the white knight to aspiring MediaCom personnel in that part of the world. Sadly I knew that the cavalry was not over the next hill. They were still in Frankfurt and New York, with no intention of breaking camp.
A new regime
By now I had got to know Alexander Schmidt-Vogel – the head of MediaCom in Europe – and learned that he was becoming increasingly disenchanted with the apparent reluctance of Grey to entertain any expansion of his authority beyond Europe. I let Ed Meyer know of this and Steve Felsher was dispatched to Germany to avert a potential problem.
Shortly thereafter Alexander was named head of MediaCom Worldwide, while Alec agreed to take a vague supervisory role. The problem appeared expediently solved, until Alexander announced that he should move to New York as a perceived corollary to his title. This did not appear to be part of the plan, and much hand-wringing ensued. To the surprise of many, Alec resigned shortly thereafter and Alexander duly arrived in New York.
With his characteristic self-assurance, the opportunity of momentum, and the evident admiration of Steve Felsher, I hoped that Alexander might at last secure independent financial responsibility for MediaCom. I was convinced that MediaCom could never be a real global business without direct financial responsibility and the freedom to allocate financial resources wherever deemed necessary for global growth. To my disappointment, Alexander elected not to engage in this crucial mission, suggesting that we had not yet proved that we could run a stand-alone business. I found this a curious deduction given Grey’s acquisition of both MBS and The Media Business!
“As an authoritarian leader, I knew that Alexander’s management style was diametrically opposed to mine”
As an authoritarian leader, I knew that Alexander’s management style was diametrically opposed to mine. While I practiced inclusiveness by sharing our goals, decision-making and financial performance with all senior management, any learning from our success in Canada went stubbornly unsolicited. Alexander was already having to contend with the assertiveness of Steve Allan in the UK, and evidently did not want any challenges from a foreign land with which he was unfamiliar. My time was clearly running out.
Time to say goodbye
After a year or so, Alexander and I agreed that I would resign any further involvement in our twin Canadian brands of MBS and MediaCom – on the pretext of my moving to New York in the vague capacity of vice chairman of Mediacom. Ironically, the public announcement of this event coincided with our acquisition of P&G’s business in Canada. After a prolonged courtship, we had finally secured the biggest advertiser in Canada, bar one.
My extraordinary odyssey was over, with a last flourish.
When I left in 2005, the MBS and Mediacom brands were together listed as the largest media specialist company in Canada, with offices in Toronto, Montreal and Vancouver, comprising US$700m in billings, a 17% market share and a staff of almost 300.
I will always be grateful to those who made my journey possible, from obscurity in England to centre stage of a very professional industry in Canada. I am particularly grateful for those kind strangers who gave me their hand along the way.
But most of all, I am grateful to all those on whose shoulders I stood to make this journey happen. I owe my success to my community of most loyal and competent employees who believed in my mantra that “good enough” wasn’t! Only our very best would suffice.
Our obligation to all those clients that hired us was to make them great. We were all partners in this team effort, from receptionist to CEO. With this common goal, mutual respect and diligence to tackle each step at a time, our journey was possible!
Canada is undoubtedly one of the most challenging arenas for any business. It is a massive country with a far-flung population half the size of Britain’s neatly compact citizenry. Its disparate population speaks one of two official languages, or one of many unofficial ones. In addition, Canada receives almost complete duplication of a plethora of both Canadian and American media. Canadians must also contend with some radical weather extremes from time to time!
Canadian business has to work harder and better, just to survive.
Epilogue: The magic formula
When Steve Felsher noted that Grey had already benefited significantly upon their acquisition of MBS, he observed that buying a corporate philosophy and operating regimen could be as valuable as buying tangible assets, but was rarely appreciated. He was referring to the combination of business philosophy and business management practices that I had developed over the preceding years and that were ingrained in all MBS personnel.
Our business philosophy encompassed the somewhat unfashionable attributes of Aspiration, Duty, Respect and Appreciation, and the essential glue of Tenacity.
Aspiration demanded a deep-rooted personal passion to do one’s absolute best at all times, with a concomitant abiding passion for detail. “Good enough” wasn’t in my playbook! We must always strive to exceed the expectations of others and ourselves.
In an expanding marketplace, my philosophy clearly subordinated expense management to revenue growth. I considered that an expense management focus was OK for declining or terminal businesses but far from appropriate in a growing business sector. We clearly aspired to be a top-line dedicated operation.
I had a duty to exemplify our corporate philosophy, to provide clear, consistent and well-communicated direction, and to enunciate personal performance expectations. I also had a leader’s responsibility to protect those on board from competitive threats, and from our own potential errors or omissions. Reciprocally, duty required an obligation from all employees for personal performance and collective protection, and this was particularly required of my potentially very well-paid senior management.
The characteristic of respect demanded an evident trust in subordinates and a keen awareness of the collective contribution of all involved within and across our business teams. It also dictated obsessive diligence in discharging the responsibilities entrusted to us by our clients.
Essential to this philosophy of mutual respect was my acknowledgement that I worked for my teams as much as they did for me. We just had different roles to play. Thus our celebrated receptionists felt that their jobs were just as vital – as “directors of first impressions”!
I believed that appreciation of personal performance in the form of both personal and collective recognition was essential to encourage pride in personal achievement, and to acknowledge individual contributions to our collective achievements. The same tenet of demonstrated appreciation was also applicable to recognize our clients’ continued commitment to us.
The tenacity to stick with these principles through good times and bad was obviously essential to our accomplishment. As a notably disinterested student at school, I had seen peers that seemed much smarter than I appeared to be. I resolved then that I would have to think more and think longer to match the perceived brilliance of others. From those formative beginnings, quiet tenacity would become central to my character, and to my business philosophies. “Never give up” would resonate with me for a lifetime.
“Aspiration had to translate into articulation of specific goals, and striving for excellence meant ongoing reassessment of our words and deeds to perfect our achievement”
Our management practices reflected these philosophies.
Aspiration had to translate into articulation of specific goals, and striving for excellence meant ongoing reassessment of our words and deeds to perfect our achievement. For example, it was a given that we would keep rehearsing and polishing the text of our business presentations until we literally ran out of time to improve further.
Similarly, I championed the notion that decisions were not “set and forget”, but also should be subject to ongoing review. Whilst resolute decision-making is often perceived as a badge of management prowess, I encouraged my executives to revise or amend decisions whenever new factors became apparent. In my book, changing a decision or embellishing previous achievements was a very good thing if time allowed and circumstances warranted.
Interestingly, I found that my female executives were often more adept than their male counterparts at personal and collective improvement by means of ongoing performance assessment. This proved to be true also with respect to teamwork and in recognizing the talents of others. Not surprisingly, my senior management was predominantly female.
Our corporate growth aspiration was expressed in a consistent annual goal to exceed a net revenue gain of 5% and gross profit of 15%. This was only to be deviated from in years of economic recession and/or rampant inflation – or if either revenue or profits were exceeded to a disproportionate degree. We also aimed for at least one dominant client in each business category, and to exceed any competitor’s public-relations share of voice.
I had developed various tools to harness the power of aspiration, including regular all-staff meetings in which our goals and achievements could be emphasised and publicly recognised. We developed keywords to describe our corporate personality, and employees were publicly acknowledged for exhibiting such attributes. For example, if a young person in accounting had shown exceptional diligence in chasing down that last nickel of income, she was lauded on stage. When a young media account person thought of hand-delivering the early editions of all newspapers containing her client’s new ad campaign, beautifully wreathed in MBS ribbon, she was similarly applauded for her thoughtful initiative.
With the duty to communicate the best direction that I could provide, I instituted a ‘Management By Objective’ personnel assessment tool for all middle and upper management. Unlike many organisations that appear to focus on the performance of the less well paid, it seemed to me that performance assessment was warranted in direct proportion to personnel compensation. Thus all of my senior executives had specific quarterly ‘Standards of Performance’ goals relating to their obligation to build our business.
My philosophy was such that I wanted builders rather than passive managers on my team! I lectured that the unfortunate appellation of “manager” suggested a lower-return policing role rather than a high-value construction role. I thought of introducing hard hats to make my point, but decided that this might detract from encouraging a stylish dress sense in those who were asking our clients to authorise us to spend many millions on their behalf!
As builders, I believed that executive achievement could comprise building our revenues with additional business from new or existing clients, or by building our resources with superior personnel recruitment and/or personnel training. Such constructive achievement could also be derived from developing new products and/or improving processing efficiencies. It could also emanate from building our corporate image with personal public relations achievement, or internal endeavours to amplify our corporate culture.
Respect required that I listened to and was prepared to accept the opinions of others. After all, we were a team. Consequently, I needed to encourage collegiality through mutual respect. I knew from first-hand experience that vital employee tenure was as much a function of work environment as it was about compensation.
Such mutual respect required acknowledgement of the needs of all participants, especially the need for education and the tools required to succeed. We were applauded by our competitors for having the best training programs and – thanks to a very competent and progressive IT team – we enjoyed cutting-edge technology wherever needed. I also believed in providing the best working environment for our staff. Our offices were in prestigious locations and designed to exude a subtle elegance of which all employees – and our clients – could be proud.
“I also believed in sharing our hard-earned corporate profits through carefully crafted bonus schemes”
I certainly believed in communicating our ongoing financial performance as tangible evidence of my respect and trust in associates. I also believed in sharing our hard-earned corporate profits through carefully crafted bonus schemes that could potentially double or even triple the not-insignificant base compensation for my top executives.
In addition to regularly reviewed personal compensation, I could also show my appreciation for our collective efforts by encouraging such things as occasional office parties, special events such as chartered boat trips, and a summer BBQ that was initially held in my back garden until it became standing room only!
In appreciation of employee tenure, I introduced a sabbatical program whereby qualifying personnel could take three months’ paid leave after each 10 years of service, or receive an extra three months’ salary in lieu of such absence.
To further demonstrate my appreciation for those that aspired to greatness, I arranged surprise events for top performers at all levels, ranging from balloon rides to chartering the Goodyear blimp, and once even a trip on Concorde for a few very surprised top performers.
All in all, perhaps we were most renowned in our industry for putting on the most lavish of Christmas parties. I appreciated the spontaneous effort of all those present to dress their best for this event. For many, this was like the Prom Night that most had never had. A group photograph came to be a much-prized standard feature, although increasingly challenging to orchestrate as our numbers grew beyond 200 in Toronto! To recognise those less fortunate than us, each business team annually donated corporately matched funds to the charity of their choice.
At the Christmas party preceding the new millennium, all present in each office received $200 in cash. This was a small extra token, but one particularly appreciated by our less well-paid staff.
With philosophy and concomitant business systems well entrenched, all personnel understood aspirations, expectations, achievements and rewards. Everyone on the staff was on the same page.
My greatest reward was when a junior employee excitedly returned from vacation, praising an excellent hotel or some special restaurant with the plaudit that it was a “Peter place”! How neat is that!
For our clients, I signalled my appreciation of their trust in us by regularly hosting special evenings at major cultural events. I also hosted a private dinner every few months for our client CEOs to meet CEOs from major media owners, and also some of my government and political friends. There was no agenda for attendees other than to make friends and useful contacts across industries, within the media and with legislators. I did, however, always arrange these dinners at the best restaurants in town, and sought an entertaining speaker to add some focus to the evening.
To my joy, these dinners became “must attend” occasions for some of the major business influencers in Canada. I was especially honoured when CEOs requested invites for others, and the group grew exponentially. Phillip Crawley, the erudite publisher of The Globe and Mail and regular participant, accorded me the accolade that I was “the only person in advertising who could pull these events off”. It helped that I had no one to tell me that the dinners were far too expensive and of unquantifiable return!
Steve Felsher of Grey Worldwide was right. With a very competent and loyal team, we had a game-changing mechanism that enabled us to dominate our industry with consistent growth and profit. We also enjoyed a unique camaraderie that – astonishingly – has survived to this day, despite the ongoing struggles of a new management determined to impose their own magic formula.