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Scholz & Friends flourished by staying one step ahead of the game. When it lost a chunk of Mars' pet food business, it threw its energy behind another of its biggest clients, the tobacco brand Reemstma, aiding that company's expansion by setting up branch offices in several European capitals. Following the fall of the Berlin Wall, Scholz was the first agency into the former East Germany, opening an office first in Dresden, then in central Berlin. In 2000 it merged with the TV production company UVE, giving the agency the ability to create branded TV shows for clients. And in 2003 it bought itself out of its network owner – then the Cordiant Group – with the aid of a private equity company.

Scholz even managed to wrench opportunity from the jaws of the recession that decimated the German advertising industry. By 2005, following its management buyout from Cordiant, it was effectively the biggest independent network in Europe, with 900 staff and turnover in the region of 80 million euros. It had also won clients including Ideal Standard, Siemens, Masterfoods, Nike and AOL – not to mention the job of promoting the 2006 World Cup.

‘We have the recession to thank for our success,' joint chief executive Sebastian Turner told
Campaign
. ‘If we hadn't found ourselves in a situation two years ago where we didn't show a profit, we wouldn't have had the courage to drastically overhaul the company' (‘German creativity blooms as recession persists', 22 April 2005).

The revamp knocked down the walls between marketing disciplines. Instead of treating, say, TV advertising and direct marketing as separate issues with compartmentalized budgets, integrated teams would apply their expertise to each campaign from the beginning. The idea was to create a fully integrated network, although the agency used the term ‘orchestra of ideas'. It's the kind of thinking that is becoming increasingly common as agencies adapt to the digital environment (see
Chapter 20
, The agency of the future).

Nevertheless, one of Scholz's most famous campaigns is a long-running series of print ads for the newspaper
Frankfurter Allgemeine Zeitung
(FAZ). Well-known personalities are photographed in dramatic
settings, their faces hidden behind the broadsheet newspaper, in which they are clearly engrossed. The tagline reads, ‘There's always a clever mind behind it.'

While Scholz & Friends has managed to remain coolly aloof, two of Germany's best-known creative agencies, Springer & Jacoby and Jung von Matt, had a vaguely incestuous relationship.

But let's not get ahead of ourselves. The wild card in the history of German advertising is the Swiss-based agency network GGK (which later linked up with the Lowe Group). The original agency was founded in 1959 by the highly respected graphic designer Karl Gerstner, along with Paul Gredinger and Markus Kutter. GGK established several European branches – and in the 1970s its German office was considered the country's most creative agency. It was at GGK that Reinhard Springer and Konstantin Jacoby met.

Reinhard Springer left to open his own agency in 1979, at the dawn of the country's commercial television service, with copywriter Konstantin Jacoby joining him a little while later. Some say Springer & Jacoby invented modern German advertising. Together they mastered what was effectively a new medium, injecting a universal humour into their work while at the same time providing a disciplined, professional working environment.

Leading German creative Jean-Remy von Matt, who joined the agency in 1986, recalls, ‘There were many strict rules. The agency's founders were the protagonists of a tough, rigorous approach.' Self-respect was encouraged. ‘Reinhard Springer, for example, never waited longer than 10 minutes for a meeting – even if it was his first contact with a big prospective client.'

Although the agency operated on a modest scale for some years, it leapt into the big time in 1989 when Mercedes awarded its account to the agency. With this highly prestigious win under its belt, S&J gained more clients and secured the top slot in the country's creative league table.

The advertising industry, you will have noticed, resembles a slide of amoeba under a microscope, with elements constantly breaking off and reforming. The German advertising scene is no different. And so in 1991 Jean-Remy von Matt and his colleague Holger Jung left Springer & Jacoby to set up their own agency, Jung von Matt.

Jean-Remy von Matt entered the advertising business in 1975 as a copywriter in Düsseldorf, ‘which at the time was a boomtown of creativity'.
His first task was to create a print ad for a company that made shower screens: ‘I wrote the headline and the copy – and because the male model for the photo was sick, I did that job too.'

He later went to Ogilvy & Mather in Frankfurt, and then to a hot shop in Munich. Finally, after another five years of hard work at Springer & Jacoby, he – like his business partner Holger Jung – was ready to take a risk. Acquiring a former corset factory as their headquarters, they installed a 14-foot-high Trojan horse in the foyer. The horse reminded staff and clients that ‘good advertising… has an attractive exterior, resembles a gift and delights the heart. But inside, the hard-hitting core is consistently aimed at a specific target' (‘Germany's creative hot shops',
Campaign
, 17 April 1998).

Jung von Matt grew quickly. ‘We started with seven people,' says Jean-Remy, ‘ten years later we had 500 – so our biggest challenge in the early years was to find enough talent to fulfil our ambitions, as well the expectations of the market. Today we have a staff of 650 in four countries – with hopefully more to come in Eastern Europe.'

One of the agency's flagship accounts was BMW. In a memorable TV spot, a good-looking guy gets into an open-top BMW Z3 sports car and roars off down a country road. He pops a cassette into the player and a song begins: ‘Oh Lord, won't you buy me a Mercedes Benz…' In an obvious jibe at the auto maker's competitor (and its advertising agency?) the driver pops the tape out of the machine and chucks it over his shoulder.

This was a fine sentiment until the summer of 2006, when Mercedes announced that it was taking its account away from Springer & Jacoby and giving it to Jung von Matt. After much soul-searching, Jung von Matt had been forced to resign the BMW account. It started work as the lead agency for Mercedes in January 2007.

After being buffeted by the recession, Springer & Jacoby found itself back in the role of creative outsider, under pressure to prove itself again. The agency pledged to reconfigure itself for the new era of digital marketing. It remained, as one German executive stressed, ‘a school and a reference for the German advertising community'. But past glories were evidently not enough to assure its future: in April 2010, shortly after its 30th birthday, the agency filed for bankruptcy, having failed to survive the departure of Mercedes.

However, as an article in
Advertising Age
pointed out, its spirit lived on; not only in Jung von Matt, but also in Kemper Trautmann – another
respected independent agency co-founded by an S&J alumnus – and in Germany's growing number of creative hot shops (‘Iconic German agency Springer & Jacoby closes', 15 April 2010).

Constantin Kaloff, a former creative director of S & J, summed up: ‘Springer & Jacoby was the mother of all creative agencies in Germany, the architect of our creative landscape.'

10

Media spins off

‘Let us spend your money'

T
he ‘full service' advertising agency ceased to exist some time ago. By 2000 there was barely an advertising agency left that still had its own media department. The business of selecting and buying media space had practically become a separate industry – comparable with research, direct marketing, or event management. And there lies the rub: in a world of converging media, it has become almost impossible to separate these disciplines. Clients are now demanding multimedia campaigns that combine the firepower of TV, digital, outdoor, sponsored events and a host of other points of contact with consumers, with one underpinning creative strategy. This requires highly skilled media planning. Crucially, it requires a tight partnership between the creative and media teams. It might help if they were in the same building.

This development has left the advertising agencies rather shamefaced. Having spun off their media departments into highly profitable self-contained units, they may now have to figure out a way of getting them back. Some say that the links between the ‘creative' and ‘media' agencies are strong enough to address clients' needs. Others are less convinced. At a forum organized by the British creative advertising journal
Shots
in March 2006, one executive said, ‘Separating media from creative was the worst mistake the industry ever made.'

We'll return to this argument at the end of the chapter. But for now the key question is: how did we come to this pretty pass? For the answer, we must first return to Paris.

The
24
-carat idea of Gilbert Gross

Gilbert Gross was born on 3 April 1931, the son of shopkeepers. As a young man he worked for a tiny advertising agency at the top of
rue Lafayette, the long straight avenue that runs between the Gare du Nord and the Opéra Garnier. For the time being, there was little to indicate that he would create a new branch of the advertising profession.

‘It was tough, but not as tough as it had been just before my arrival,' says Gross – who now is an imposing, bronzed, silver-haired gentleman in his mid-seventies. ‘As you know, we made our money by accepting a commission of 15 per cent from the media every time we placed a client's ad with them. At that time, the government had just overturned a rule that said if you took a client from another advertising agency, they continued to receive the commission for
two years
. This had completely blocked the market to new entrants.'

Despite the scrapping of this terrifying regulation in the mid-1950s, Gross was forced to go from door-to-door along the rue Lafayette, soliciting for business. ‘I remember my first client was a shoe store called Aux de Lions, a minuscule small ads account. The next client was a tailor… basically, it was a struggle.'

Eventually, Gross won the creative account for a brand of coffee owned by Perrier. He was told that while he would be paid a fee for his creative work on a freelance basis, the media placement would be handled by Havas. ‘There were a series of meetings at which I met a certain Monsieur Clément, who was responsible for the media placement. During our conversations, I realized that he was able to negotiate the media space for a much lower price than the client might have imagined. I also noticed that he drove a very nice car. It still took me a while to work out what was going on, though.'

Gross became friendly with Clément, who invited him along to a lunch with the advertising sales director of a large regional newspaper. ‘It was like being in the bazaar at Marrakech,' he chuckles. ‘I'd always accepted that the rates for advertising space were fixed… but no, not at all! It was, “If I buy two pages what kind of deal can you do for me?” and so on. All this while sipping wine and eating fine food in a very jovial atmosphere: I began to realize I was in the wrong job.'

Inspired by this experience, Gilbert approached the beer brand Champigneulles and offered to place its media at reduced rates. ‘The boss, René Hinzelin, was a friend of mine. He didn't think my idea would work but he gave me a chance. After all, if I came to you and said “If I can get you a cheaper electricity bill, can I take my fee out of the difference?” you'd probably agree. You've got nothing to lose! And so
I went to a newspaper and began to use the same arguments as Clément: “If I buy two pages and guarantee a lot more in the future, can you do me a deal?” It worked like a charm.'

And so a new metier – the independent media buyer – was born. Shortly afterwards, the BSN group (now Danone) acquired Champigneulles along with another beer brand, Kronenbourg. ‘I thought that was it; my short run as an independent media buyer was over. But they called me in for a meeting and said, “We've noticed you've been able to negotiate some very advantageous rates. How would you like to take care of media for the whole group?” Suddenly, I had the biggest media account in France.'

Shortly afterwards, Gross won the French media-buying account for Coca-Cola. Soon the combined media clout of his accounts enabled him to buy blocks of space a year in advance and resell them piecemeal to clients, guaranteeing a fixed income for his media contacts. It was this media buying operation that became Carat (
Centrale d'Achat, Radio, Affichage, Television
) in 1966. In order to offer an extended service to international clients, Gross began to set up offices in Europe and beyond.

All went well until the introduction in 1993 of the Loi Sapin (‘The Sapin Law'), designed to create ‘transparency' in the French marketplace. It effectively fixed media rates and cut the media agency out of the transaction between advertisers and media supports. Gross uses a neat metaphor: ‘It meant that instead of going to the market and buying vegetables in bulk, then selling them to customers and pocketing some of the money we saved them, we were reduced to telling them whether carrots or cauliflowers were better for their health. We became consultants rather than traders.' (The law exists only in France – elsewhere, media independents are free to act as both traders
and
consultants.)

Although Gross admits that the Loi Sapin ‘cost us a lot', Carat eventually flourished in its new consultancy role. The advantage it offered to clients became qualitative rather than quantitative: thanks to its media expertise, it could advise brands on exactly where and when they should be seen in order to achieve maximum impact for their campaigns. This expertise would be paid for on an entirely above-board fee basis.

Carat is part of the British communications group Aegis, which bought a stake in the company in 1990 and became a full owner in the years following the introduction of the Loi Sapin. Carat's headquarters were then shifted to London. Entirely free from agency ties, it is the
world's largest independent media consultancy. A host of other media specialists were spun out of full-service advertising agencies. The motivation for creating them was partly practical, but largely financial.

From barter to Zenith

Independent media buying in the United States essentially grew out of barter arrangements. You might provide some studio equipment to a small TV company. In return, rather than paying cash, they would give you TV advertising slots. Then you'd have to sell them on.

One barterer-turned-buyer was Norman King, founder of a company called US Media. In 1970, he prophetically told the Association of National Advertisers that their ‘giant agencies' were not buying media efficiently. ‘For years, now, your agency has been spending millions of dollars and nobody's been really watching them,' he said. ‘My suggestion is, let us spend [the money] and let your agency watch us' (‘The day the prices fell',
Inside Media
, 1 January 1992). Unfortunately, a year later, US Media went out of business.

At around the same time, Dennis Holt started Western International Media in Los Angeles. A far more solid concern, over the years this swelled into a media-buying behemoth with blue-chip clients such as Disney. In 1994 Holt sold it to the communications group Interpublic, which re-named it Initiative Media.

In London, in 1972, a young man named Chris Ingram was made responsible for merging the media departments of seven agencies belonging to the KMP group. He suddenly found himself running a standalone division of 50 or so people, which was cunningly christened The Media Department. ‘This was the birth of the agency-owned media specialist,' he says. But during the 1973 recession, Ingram feared that the media function would be merged back into the main agency, so he left to start his own media planning and buying shop, CIA (Chris Ingram Associates).

Another important landmark came in 1985 when Ray Morgan, who headed Mercury Media at Benton & Bowles, left with most of his staff and clients to set up a standalone media operation, Ray Morgan & Partners. Three years later it was acquired by the Saatchis, who wanted it to handle media for their growing collection of agencies. The operation was re-branded Zenith. This opened the floodgates for the tide of
re-named agency media operations that emerged throughout the 1990s: MediaCom, MindShare, Starcom… the list was long and bewildering.

The birth of the media independent was partly driven by industry consolidation (see next chapter) which meant that single agencies were subsumed by larger communications groups. A standalone operation could buy media on behalf of all the agencies in the group, giving it enormous negotiating clout with media owners. At the same time, it could pitch for clients whose creative work was not held by any of its associated creative agencies. It could also bolt on a whole range of consultancy services for which it could charge additional fees. The overall result: more income for the parent group.

Turning back the clock

Although the creative agencies clearly feel uncomfortable talking about it, there is a lingering suspicion that letting go of the media planning function may have been an error. An early hint of this came in 2000 with the formation of Naked, a new breed of independent agency designed to help clients coordinate the scattered disciplines (see
Chapter 20
, The agency of the future). More recently, a number of agencies have launched initiatives designed to bring the media and creative functions closer together. BBH called this new discipline ‘engagement planning'. TBWA preferred the term ‘connections planning'.

But there is certainly no consensus that a return to full service is an attractive idea. Media specialists argue that in the full service era, clients were too often persuaded that the best way to raise their profile was via television advertising – which coincidentally meant bigger bucks and a greater chance of creative awards for the agency. The media planners' oft-touted philosophy of ‘media neutrality' means that if a cheap but targeted blog is more appropriate to the client's needs, then that's what they should pay for.

Jack Klues, who created Leo Burnett's spin-off media operation, Starcom, insists that unbundling actually took place at the behest of the clients. ‘Clients push for change. We try to keep pace with them, or even interpret what they want and get ahead of them, but at the end of the day the advertising landscape is moulded by them. I'd be disappointed if anyone thought that the media businesses were formed to serve the
egos of people like Chris Ingram or myself. This turned out to be the best way of doing our job – but we're not trying to do it at anyone's expense. Some of my friends in the creative agencies say, “You guys are trying to take over the world!” ' He laughs. ‘Well, maybe that will happen – but it's not my agenda.'

Kevin Roberts, the straight-talking worldwide boss of Saatchi & Saatchi, dismisses the very notion of a return to the old days: ‘It's the burning question that everybody's asking – but it's the wrong bloody question. Old notions of media are no longer relevant. In my view there is no such thing as media any more: all we've got are consumers and connections. What clients need is a group of consumer experts from all over our world, sitting around the same table, before the brief has even been set. In fact, briefs are useless because the clients usually don't even know what they want. So give me a group of people who can
feel
what the consumer needs. Do those people all need to come from the same company? Of course not.'

In any case, there's no going back. It's impossible, not to mention pointless, to compare the original single-celled advertising agencies with today's highly complex marketing giants.