In this second part of his conversation with the Chairman and CEO of Universal McCann, Joseph talks to him about P&L, value and other such thorny issues.

In April 2002, Robin Kent was named chairman and CEO of Universal McCann, the media arm of McCann-Erickson Worldwide. Kent joined Universal McCann in 1996 and was appointed EVP, Regional Director for Europe, Middle East and Africa in January 1997. In addition to his Global Chairman role, Kent acts as Regional Director of UM North America, focusing on elevating the quality of client servicing and new business development in the United States. During his time with UM, Kent has overseen significant investments in strategic tools, including Media In Mind™, a worldwide study that uncovers and correlates media habits and consumer behavior. Kent was named one of AdAge Global's "Top 100 Marketers" (AdAge Global, July 2002) in recognition of his “fresh thinking and initiatives.”

Two weeks ago, part one of my interview with Robin Kent focused on the whole notion of media-neutral channel planning and presenting a glimpse of the next evolution in the ever unbundling media landscape. This week I wrap up this stimulating conversation by exploring some of the other likely scenarios in this exciting space, together with a frank outline of how to add back a degree of value to media’s bare-boned remuneration.

Jaffe: I put a lot of effort in my consulting role now trying to understand and help agencies. I think it’s probably safe to say that the agency business is close to being in the toilet right now. Agency folks are just like a lot of chickens running around with their heads chopped off.

Kent: Are you thinking traditional as in the advertising agency making TV ads?

Jaffe: For the most part. Because that is ultimately what the agency business is still all about. And the real question is, therefore, how will that agency need to evolve?

One evolutionary trend has been the continuation of the unbundling of media, or the formation of the media-only agency – ironically, it seems to have almost injected life back into the business, if that can be said. In the past couple of years, I’ve seen a few media agencies that have really impressed me. One has undoubtedly been you; the other two are Starcom and Carat.

Kent: It’s interesting because Starcom’s position is separate to integrate, which is great. I think it does a fantastic job and is a great competitor. For whatever reason, fortunately, we didn’t have to do that. We had enough strength inside the McCann organization to create our own space without having to go to the extreme of a Mindshare or an Initiative, for example.

Take McCann Erickson, the agency. It’s still doing great work, which you may well call traditional, but even it is finding new ways. So it’s definitely evolving.

But now we’ve found a way to pull all of this (traditional agency, promotions, PR, direct, interactive etc.) together, and lot of the reason why is based on Universal McCann being a horizontal discipline as opposed to vertical. We’re seen by everyone as being drivers of the communication process, but also, if you like, the people who do the execution.

Media people are very good at visualizing plans. So by the time we’ve sat down and briefed the PR companies, and the event marketing companies, and the event marketing companies, and the promotions companies and brought all that together, we know where it all fits. And then it’s our job to hear their arguments about what role they should play within the campaign. And for us then to map that off against all the other ideas we’re hearing.

And I think that going forward, we will become a pivotal point. And as we grow, we will be briefing creatives to your point earlier.

Jaffe: One of my biggest concerns regarding unbundling media (especially from an interactive standpoint) is that it is difficult if not impossible to separate media and creative. So I guess I would have asked you about that, but I think you’ve answered it by saying you’re bringing aboard creatives.

Kent: It’s interesting how this lives. I don’t think it’s right, but I did not speak to an account man in the three years I was at Carat in Europe. I told the client what the media plan was, and if the ad agency had a problem with it, that was their problem. Literally. But that’s got to be the wrong way. The model of being a media independent does not allow you the flexibility and the time to walk the halls and sit with people.

This being said, one of the benefits of being part of McCann WorldGroup is that we can pull on the resource from the group when needed, and that was really evidenced in winning Sony a year ago. For example, we got account planners from McCann, because we didn’t have our own. That’s a lot of money if you’ve got to pay for that out of your own pocket, especially as a media independent.

This is one of the reasons why (so many agencies) talk about being able to do this holistic communication planning, but you never see it.

There’s another issue with the media independent, that in a lot of cases, the relationship is with the media client and not with the main client. In order to make this stuff work and drive it through, you need client relationships at the most senior level. And media people often end up with the media client, who doesn’t necessarily have any control over event budgets or promotional budgets.

Recently on a packaged goods company we’re doing a lot of work on, it was only when we got to the most senior person that actually we were able to make it happen.

Jaffe: Compensation, separate P&Ls – another stumbling block and challenge when it comes to selling media neutrality, but also evolving the media agency. Can you comment on compensation and also, how you’ve gone about from a financial and maybe business incentive standpoint to help it evolve?

Kent: For communication planning, clients realize that it’s an additional cost. They know full and well that nowadays, they buy a team. By and large, it’s fee-based, and the only way you can pay for account planners, or any old people in research, is in your overhead. So as long as clients will accept the overhead level, then that’s fine. That starts to pay for these other resources we bring to bear. But I think that anything that goes above and beyond what would be traditionally set as the norm needs to be charged for. And we charge for that. What you’re buying is ideas, insight – which is hard to put a price on.

Jaffe: I think that’s really what it comes down to ultimately, which is again, advertising being a swear word – I certainly got this from Ad Watch both years, which is, clients want ideas, and big ideas at that. And integrated big ideas.

Kent: Well they don’t necessarily buy them, though. That is a standard stock answer from a client, “Bring me big ideas.” You should see how many big ideas – they would actually go higher than this building – that have died, because the clients either are not brave enough to do them, or they just don’t want to do them. Or they don’t have the power to do them.

But yeah, if you can. Our job is to bring ideas and innovation and that’s what we’ll continue to seek to do.

Jaffe: I’m definitely not a fan of consolidation, conglomeration, bigger is better. I’m not a fan and I’m pretty vocal about it, but in this case – because of, I think, in part, the connection with McCann, but also in terms of the different initiatives you’ve pioneered and implemented and executed -- I’m not seeing “Oh, we can do that. We can also do that. We’ve bought a company that can do that.” Like some of the other holding companies, I’m seeing investment in the right kinds of resources for the right reasons.

Kent: Because the other side of it is, we can do the big gorilla thing, through Magna if need be. The beauty is that we work out the strategies from the ground-up. We only talk to Magna about aggregated dollars. So they’re buying what we want them to buy, or negotiating what we want to negotiate. So that’s where size plays a role. And you need it, because clients are putting more pressure on us to do the job for less, so we need to find ways to be more effective and efficient, and cheaper, and also, the media owners are getting bigger and going direct to clients, and in every single aspect that they can, cut us out of the role. Because Viacom can say, “I’ve got out-of-home, and I’ve got interactive, and I’ve got radio, and I’ve got TV, and I’ve got a theme park – why don’t you give me all your dollars?” And it’s our job to say, “They’ve got all those things, but that’s not what you want.”

Jaffe: I don’t want to say catch-22, but you guys are wrestling with the two-headed serpent -- the more-for-less head, and then on the other side, the ability to be able to charge for your time and Mark’s time. So there’s the, “you get what you pay for”, but you want more for less. It’s a balancing act, isn’t it?

Kent: What’s happening nowadays is clients are starting to see – and again, it comes back to this structure we have in place and the whole communications thing – they’re starting to see that we add a value above and beyond crosses in boxes and buying cheap space. And once they get that, they’re actually prepared to pay for it. Because somewhere within their newly added budgets is money for things. I mean every client should invest a percentage of its spend in research in what it has just bought. But they don’t.

But many of them have got research budgets and many of them spend vast amounts of money on research. Much of it never sees the light of day or much of it’s never necessarily linked to the end result.

Jaffe: Which comes back to ROI and accountability.

Throw down the gauntlet, as it were. Issue a challenge: As an emerging or infant industry, what do we have to do better to help us continue to legitimize our trade?

Kent: We were talking about this the other day, in the sense that perhaps a large percentage of the people in our industry – in the interactive industry – think of themselves as second-class citizens, that they’re not being taken seriously, and that this is a very important medium.

I think you’ve got to become part of the integrated plan or integrated communication process, because we, as communication experts, if you like, we have a whole plethora of choices. We can choose DM for example. We don’t have to choose the Internet. We can choose promotions, we can choose events, and we can choose traditional media. We can choose a whole kind of combination of those. So I think it’s really to become part of the mainstream.

The more things change, the more they stay the same. Try to understand where you fit into the overall picture.

Jaffe: I want to clarify one thing. I hear two things – chip on our shoulder. But you also talked about second-class citizens. Are you saying that it’s time for us to recognize that we’re not second-class citizens?

Kent: You’re not. You’re going to take a bigger percentage of advertising revenue than radio or out-of-home. You have to remember…I sat through countless board meetings where we were told, “You are all a bunch of dinosaurs. You are dead. There is no future for you. The future is in interactive.” And I think that the industry, probably, for a long period of time, has been full of people who actually believe that, and they’ve had a hell of a wake-up call that that’s actually not a reality.

But this was obviously at the height of the dot-com boom and everything was going to be on the Internet, and everybody was going to become fabulously wealthy over it, and if you were bricks and mortar, you were a dinosaur.

I think too many people believed that; too many proliferated that as part of their belief. And probably today, there are still a lot of people in the industry who are still a little bit kind of chippy, that actually they’re not quite as important as they probably thought they should be. I mean, to my mind, they’re very important, but they’re no more important than PR or events, or sponsorship.

There’s a belief that they should be up here, and that they should be leading the whole communication world, and actually, the fact is, they’re not. They’re very, very important, but they’re only part of it. Or only as important as the consumer deems you to be important. And for some people, it’s going to be massive.

Jaffe: Thanks Robin. Final question for you: If Jaffe Juice were a drink, what would it be and why?

Kent: A Jaffe Juice is a long cold drink of flavored water. Why? Because nothing quite like water quenches my thirst!

Jaffe: Aaaaaaaah.