Network proud to stand alone

By DITA DE BONI

An independent agency network that has not been swallowed whole into the thick alphabet soup of WPP, DDB, O&M, JWT or Y&R is an anomaly in the world of fast-merging advertising empires.

One of the most far-reaching private networks of independent advertising agencies -- turning 50 this year -- says the benefits of not becoming just another string of letters needs to be spelled out in full.

That said, ICOM (International Communications Network) claims it corners the market in being IIII (independent, international, integrated and interconnected) and, it seems, fancies itself a certified expert in the art of TLCM (tender loving care of members).

The network's executive director, Gary Burandt, is in New Zealand to visit local affiliate Walkers Advertising and says the story of the network has ``never been told outside the members.''

To be sure, the story seems to lack the bitchy infighting and ladder-climbing so endemic of international agencies. Is it really raising the hitherto unexplored scenario of peaceful cooperation between member advertising agencies?

``Our members have the entrepreneurial spirit of individual agencies but work [within] the discipline and processes of a multinational, and they cooperate fully with one another,'' says Mr Burandt.

ICOM has just marked 50 years of business with a ``cake and singing'' in Hong Kong, signing up new members in Korea and Melbourne to punctuate the celebrations.

The network, which has extended into 50 countries and 90 cities with billings of $US2.9 billion, began as a US chain of agencies supporting the burgeoning McDonald's franchise in 1950.

Now, almost two-thirds of network members lie outside the US. They include New Zealand's 10th largest agency, Walkers Advertising.

Walkers joined the network 11 years ago and is New Zealand's largest independent agency. Head and founder David Walker is a global director of ICOM.

The 74 member agencies that comprise the global ICOM network are owned and operated locally, paying ``dues'' to the Colorado-based head office, which is staffed by Mr Burandt and one assistant.

The network is, at a global level, a non-profit organisation and does not pay tax. With low overheads, members' dues pay towards global public relations efforts, travel, membership of international advertising bodies and interactive development, which is becoming an increasingly important facet of the business.

``The difference [with ICOM] is that the members are far more like-minded, because we have our own money in each business,'' says Mr Walker.

``The majority of the chief executives of each branch were born and bred in the agency's hometown. All the agencies involved have been in multinational set-ups but can realise their potential better in the independent network .''

Mr Burandt says there is a strict criteria for each member business, and usually only one agency in each region is accepted. Walkers will be the only participant from New Zealand, he says.

``Each chief executive is a strong entrepreneur, who is well connected, who grew up in the region and who is well respected by [his or her] peers, and we look carefully at clients, balance sheets and other operational issues before we admit a firm.

``And each chief executive has a share in the over all business, unlike most public companies where the holding company owns all the equity.''

Creatively the agencies can take on the number and range of clients they want; there are no competitive restrictions between offices and ``no politics,'' the two principals emphatically maintain.

``No one wants each other's job and no one wants my job,'' says Mr Burandt. ``There is a high level of cooperation and, in fact, if an agency does not cooperate with a member agency's request [for information or help] it can be asked to leave the network.''

It appears ICOM's most cherished creative work was the creation of its ``Hangar 18 project'' -- a kind of ``network within a network'' consisting of nine development agencies providing internet development assistance to the other 65 network agencies.

The Hangar team, which includes Walkers, works on e-related creative and marketing tools and as a separate business unit ranks among the world's top 10 internet advertising agencies. Mr Burandt believes billings from Hangar would amount to around $US50 million if they were tallied separately.

``Half the agencies working with Hangar are our own and half are clients of other agencies that choose to place their e-work with us,'' he says. Hangar has developed websites for a variety of American Football League teams and Swiss Tourism.

Walkers, servicing companies like Fletcher Property, Hansells, Baycorp and the New Zealand Listener in conventional advertising campaigns, has just been asked to provide internet campaign work for Honda Marine and Honda Power out of Melbourne.

``The internet may be becoming more and more global, but research shows that sites don't work unless they are regionalised,'' says Mr Walker.

``We work with agencies around the Asia-Pacific region to make sure the internet strategies work; and to gain an insight into the local market, we're working with locals.''

Both men are veterans of multinational advertising firms, and dismissive of the approach to global placement of large agencies like Saatchi: ``We aren't asking some British guy who has been moved into Thailand about the local market, or some South African heading up the Phillipines operation,'' says Mr Walker.

``We are cooperating with people who know the region and the nuances of each market -- and in Asia-Pacific, that is vital because it is a very complex market.''

Will ICOM ever become a public company? ``Some late nights over a beer some of the chief executives get excited about the prospect, but it won't happen,'' says Mr Burandt.

Mr Walker chips in: ``Our members have year-on-year growth, so there is always an opportunity for them to merge with a multinational.

``But that's not what we are about. It won't happen as a network. Our major members are long-standing, rock-solid agencies that are in to maximising their potential through ICOM's independent but supportive structure.''


Mr Walker says the idea that advertising is going the way of large corporations and centralising to specific cities or locations is not an industry-wide trend.

``It's cyclical,'' he says. ``The financial savings [in centralising] are attractive to clients but soon you have significant complaints because the best people in each region are not looking at the business.

Mr Burandt says: ``These global alignments of agencies are driven by the economics of restructuring but there are many examples of large corporations that allow their people in each region to work with the agencies they think are the best.

``The large Japanese corporations, like Honda, for example, do not have their advertising accounts global aligned. Neither does Mercedes-Benz.''

Any problems that do arise with the network can be attributed to picking the wrong member agencies, he says. ``That's really the only mistake we can make -- when you don't pick a member with the right spirit of cooperation.''

ICOM finds itself recruiting younger agencies now, because older, more established agencies are ``at the top of everyone's shopping basket.''

``The multinationals are trying to buy them and some of them have founders or chief executives that are looking to sell off and be paid out for their years of hard work.''

Will ICOM ever become a public company? ``Some late nights over a beer some of the chief executives get excited about the prospect, but it won't happen,'' says Mr Burandt.

Mr Walker chips in: ``Our members have year-on-year growth, so there is always an opportunity for them to merge with a multinational.

``But that's not what we are about. It won't happen as a network. Our major members are long-standing, rock-solid agencies that are in to maximising their potential through ICOM's independent but supportive structure.''