If you’ve ever had that dream in which you’re running down a long corridor toward a door that never seems to get any closer, you probably have a pretty good sense of what it felt like to be Creamer Dickson Basford in the 90s, running in place while its competitors pulled further and further away. Despite the energizing effect of a new management team, CDB needed a catalytic event to get it back into the race, and found it this year when (previously neglectful) parent Havas acquired New York-based marketing communications boutique Kratz & Jensen, merged it with CDB and a couple of smaller firms to form Magnet, and declared itself a player in the PR business. Magnet still doesn’t have the critical mass ($22 million in U.S. fees) to compete on a daily basis with other top tier firms, but its growth last year was a very robust 40 percent. New business came from big names clients such as Andersen Consulting, IBM, Oxford Health Plans, PPG, and Westinghouse. In short, Magnet has demonstrated it can beat the big agencies when it gets called in on pitches; now all it needs to do is get called in more. Meanwhile, its partnership with other Havas agencies—Jordan McGrath Case, Tatham, Cohn & Wells—ought to provide a wealth of opportunities, if Magnet can market itself effectively inside Havas.
Magnet has 160 people in its New York headquarters, where the staffs of the former Creamer Dickson Basford and Kratz & Jensen came together to create a formidable presence, but it’s other offices are either minor players in major markets (Chicago, San Francisco, Los Angeles) or among the leaders in minor markets (Pittsburgh and Irvine). The acquisition of CSP in California gives Magnet some presence there, but clearly additional deals are needed if the firm is going to present itself as a serious national player.
The good news is that Magnet is owned by Havas Advertising, the fourth largest communications company in the world, with offices in 72 countries and impressive European PR capabilities, including Biss Lancaster and The Grayling Group in the U.K. and the Euro-RSCG network in continental Europe. The bad news is that the Havas public relations operations are a Gordian knot of tangled relationships, impenetrable even to most outsiders, and incomprehensible by clients. There are too many brands, some of which compete while others—theoretically at least—work together, despite the fact that there’s no global PR leadership structure: most of the PR groups report to advertising executives, some on a country-by-country basis.
Magnet’s business is concentrated in four key areas: business-to-business marketing was a strength of the old Creamer Dickson Basford; consumer marketing was the focus of the former Kratz & Jensen; technology was a sector where both firms were expanding (and where another, smaller partner, Capstone Colmmunications, specialized); and financial communications is a business that has been a priority since the merger. Efforts in these markets are supported by an impressive creative services department, a research group (Information and Insights) headed by former Burson-Marsteller research chief Lloyd Kirban; and a focused media relations practice that handles top-tier news outlets. The firm is also developing expertise in health and beauty, Hispanic marketing, and travel and tourism.
The merger of CDB and Kratz & Jensen meant an influx of new talent, headed by agency principals David Kratz (known for his consumer marketing savvy) and Paul Jensen (an emerging star in the technology sector). The acquisition of CSP in southern California brought in Chris Perez, a veteran of several large agencies who had been running his own business. Other key additions include Kevin Allen formerly of Publicis, as head of the national technology practice; investor relations specialist Mark Danes from Shandwick; Michael Lipman as director of media relations; and Penny Wilfong. They are supported by a team of bright, young people, but obviously more senior strength is needed if Magnet is to compete consistently with larger agencies.
When Darryl Salerno took the helm at CDB three years ago, he immediately declared building a values-based culture to be his first priority. His ambitious plan to turn CDB—where morale was at an all-time low—into an employer of choice caused some raised eyebrows, but no one can say he wasn’t serious. Over the past two years the agency has become a fun place to work, balancing work-life issues better than most of its competitors, with an expanded professional development program, sabbaticals, flexible hours, massages, and even a “bring your parents to work day” that enables younger employees to explain to their mothers and fathers what it is they actually do for a living. And when CDB merged with K&J, leadership selected “best of breed” human resources policies from both—CDB’s sabbatical program, Kratz & Jensen’s vacation policy—to make sure employees gained benefits
In some respects, Magnet has a lot of catching up to do before it can claim to be taking a leadership role. Until relatively recently, CDB was an old-style pitch-and-place publicity shop, with a relatively shallow reserve of intellectual capital to draw on. The Information & Insights Group, which offers strategic research, focus groups, and reputation monitoring services, is led by industry veteran Lloyd Kirban, who pioneered PR evaluation at Burson-Marsteller. The agency is also attempting to integrated creative marketing solutions—special event planning, promotions, and celebrity endorsement—into its PR programming in a seamless way.
Magnet introduced green ketchup for Heinz, securing massive media coverage on short notice after the story leaked, and handled publicity for Toyota Motorsports, and continued to manage business-to-business marketing efforts to Carrier, a testament to its ability to generate interest in products from the bizarre to the mundane. The firm continued its impressive work for longtime CDB clients such as Bayer and Carrier, and has taken on interesting assignments for clients such as the American Booksellers Association, which represents independent booksellers threatened by Barnes & Noble and other megastores; strong consumer brands such as Coors, Fortunoff, Heinz, and Williams Sonoma; and tech clients including IBM, PartMiner, deja.com, Allegis, and TradeYard.
The Magnet brand is only a year old, but it’s a strong name, and it’s hard to fault Havas for the decision to jettison the Creamer Dickson Basford identity, given that CDB has been in a decade-long freefall. The agency leadership has been focused—wisely—on making sure that its internal audience understands what the brand stands for, but it has a lot of work to do if it is going to make Magnet meaningful to the outside world.
The merger of two midsize agencies has created a slightly larger midsize agency, but it’s hard to see how Magnet is going to compete in the upper echelons of the U.S. marketplace without more critical mass. Most outsiders expect to see Magnet merge with at least one of its sister companies—Middleberg/Euro RSCG—or to see Havas make a major acquisition (it has been linked with True North and others) and then merge Magnet into a more substantial operation. Until it does, Havas’s market position in the U.S. will continue to lag its strength in Europe.