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McCann UK

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McCann Erickson has long served as one of the pillars of the UK advertising industry. The London office forms the hub not just of McCann Erickson Worldwide's European network, but also of Britain's biggest regional advertising network, spanning four cities in the UK and Ireland. Yet despite its undoubted size and power, McCann London's creative output has been patchy in recent years to say the least. That resulted in a major shake-up of the creative department at the end of 2010, but results have been slow to materialise. McCann remains the UK's second-largest agency after AMV BBDO, but the latter's lead has widened steadily.

Clients

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Competitors

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Brands & Activities

The London office forms the hub not just of McCann's European network, but also of Britain's biggest regional advertising network, now spanning no fewer than five cities in the UK and Ireland. In addition to its London presence, McCann has full service integrated agencies in Manchester, Birmingham and Bristol, each operating under the McCann Erickson Communications House banner. The Dublin outpost merged in 2013 with digital agency Blue Cube, to relaunch as McCannBlue. (A Leeds outpost was sold in 2006 to Golley Slater). Though they share the same brand and some clients, the different regional shops mostly operate entirely independently from one another. However, a more formal UK Worldgroup structure was established in 2014 under newly appointed chief executive Mark Lund, the former DLKW co-founder and COI leader.

Having spent several years as the UK's #2 agency, McCann was pushed into third place by JWT in 2004. It regained the #2 position in 2007, although it remains some way behind local leader AMV BBDO. Nielsen (in Campaign) estimated 2016 billings at £390m. Key clients include Aldi (handled out of Manchester), Microsoft, L'Oreal, Vauxhall (mainly out of Birmingham) and Gtech.

Despite its size, McCann's creative output was generally little more than workmanlike for several years. Worldwide CEO Nick Brien set out to change that reputation with a shake-up of McCann London's creative department at the end of 2010, and the appointment of Linus Karlsson as chief creative officer across both the London and New York offices. Yet results were painfully slow to materialise, probably because Karlsson had his work cut out fixing problems at McCann's US flagship. The arrival of two new executive creative directors at McCann London in 2012 was intended to speed up the pace of change a little, but apart from some strong work for Sony Mobile (later lost) there were only limited signs of a creative renaissance. That finally began to change in 2014, and creative output has improved considerably. The extraordinary "Survival Billboard" endurance stunt for Xbox in 2015 was a worthy winner of several awards at Cannes Lions 2016.

McCann also operates several more specialized units such as leading B2B agency McCann Business Communications, and local outposts of WorldGroup partners Momentum, MRM, Universal McCann and Shandwick, which also have regional offices. Separately branded units, such as interactive McCann-i or direct marketer Magic Hat, have for the most part been absorbed into the core brand businesses. However, the group still houses some standalone units. In 2011, it acquired direct & digital shop Meteorite, which merged with the local office of MRM to form MRM Meteorite. Another acquisition that year was digital design agency AllofUs, but that alliance was less successful - the agency bought back its independence in 2015. In 2012, search marketing agency Lakestar Media, with offices in London and Manchester, also joined the group, becoming Lakestar McCann. Until 2013, the group farmed out all its production services requirements to separate company Loveurope. However that relationship was severed following the launch of a global inhouse production network, now Craft Worldwide. A specialised fast turnaround unit was established within the London agency in 2016 under the McCann Demand banner. McCann Connected is the digital team within the Manchester office.

Financials

The main corporate entity for the London advertising agency is McCann Erickson advertising Ltd. Accounts for 2014 showed turnover (gross billings) down by 15% to £40.9m but net revenue up marginally to £26.4m. The company reported a net loss of £3.6m because of an increased management service fee to Interpublic, "a substantial investment in on-boarding of resources" to support new client gains, and also increases in pension contributions and provisions for bad debt. There were 234 staff. The agency said only 30% of revenue was generated in the UK and 52% in Europe.

By contrast, McCann Manchester reported turnover of £124.3m in 2014, and revenue of £24.3m, resulting in net profit of £3.5m. McCann Erickson Central in the Midlands reported turnover of £67.6m for 2014, revenue of £19.6m and net profit of £2.7m.

Background

Founded in 1927, McCann London was the US agency's first international office, set up initially to handle international client Exxon, whose UK arm was the Esso petrol brand. Various subsidiary agencies have come and gone. A second-string agency, Harrison McCann, was split out in 1977 and underwent several name changes (becoming The Harrison Agency, Royds McCann, and latterly HK McCann) before being merged back into the main business in 1994.

McCann had lost much of its sparkle by the end of that decade, having slipped in the rankings out of the UK Top 10. Youthful new CEO Ben Langdon was given the task of restoring lustre in 1996, and launched an aggressive new business drive. In addition, in 1999, McCann's 32 separating operating units in the UK were merged into a single group structure under Langdon's control, and skill-sets were enhanced with acquisitions including the local arm of US high-tech agency Anderson & Lembke, and regional agencies such as The Quay in Manchester and Barkers Communications in Birmingham, among others.

Langdon successfully boosted McCann from the #14 agency when he was appointed to #2 by 2001. He was promoted to a more senior European role later that year, but several clouds were already forming on the horizon. McCann scored a considerable coup in 2002, poaching Saatchi UK CEO Tamara Ingram as Langdon's replacement, but she quit the company a year later and was replaced by her deputy Chris Hunton. Meanwhile, in a completely unrelated matter, a series of accounting control errors were uncovered during the course of 2002 within McCann's European network, headquartered in London. Interpublic auditors discovered that different European group companies working together on shared projects for clients over a period of several years since 1997 had each been recording the full value of those projects in their accounts, rather than only a proportionate sum. Originally pegged at just over $68m, the over-statement was eventually discovered to be around $120m, leading to considerable embarrassment. This led to a full restructuring of McCann's financial management (and eventually to the departure of the CFOs of both McCann Worldgroup and Interpublic).

A year later, Langdon fell out with Interpublic (reportedly over his proposal to rebrand the London agency as McCann Erickson Langdon) and left abruptly. The agency's creative reputation was also under threat. Having already shifted the prestigious Coke Classic account away from McCann-Erickson in the US, Coke took dropped the Paris and London agencies from that flagship account during the second half of 2003, while other important clients also moved or reviewed their business. New European chairman Rupert Howell, drafted in from Chime, attempted to stop the rot with a shake-up of the London office and the recruitment of several high-powered executives, including RKC&R/Y&R's highly regarded creative director Robert Campbell. However, Campbell rocked the boat again at the end of 2005, quitting McCann to join United, a revamped version of Howell's own former agency HHCL. Howell himself left the agency in 2007.

Towards the end of 2010, Linus Karlsson was named as chief creative officer of both McCann London and McCann New York. That appointment resulted in the departure of London executive creative directors Brian Fraser & Simon Learman in early 2011. They were eventually replaced in early 2012 by Rob Doubal and Lol Thomson, poached from Wieden & Kennedy London.

Last full revision 8th November 2017

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