McCann-Erickson

McCann-Erickson is one of the nation's largest advertising agencies, with offices and subsidiaries around the world. McCannErickson is itself, however, a private subsidiary of the Interpublic Group of Companies (IPG), one of the world's largest advertising agency systems. The advertising agency functions of IPG are carried out in more than 75 countries. In addition to McCann-Erickson, Lintas Worldwide, Dalley and Associates and the Lowe Group are also part of IPG's holdings. Advertising agency services are offered in 22 other countries through association arrangements with local agencies that IPG has established.

The principal functions of all of IPG's advertising agencies are to plan and create advertising programs for clients, and to place the advertising in various media, including radio, television, magazines and newspapers. The usual advertising agency commission is 15 percent of the billings for advertising space or time, but discounting is a common practice among IPG firms. During 1993, the two largest IPG clients accounted for approximately 10 percent of income from commissions and fees, and foreign operations accounted for 67 percent of income (Donald, 1995, p. 1236S).

In addition to its advertising agency activities, IPG is involved in publishing, market research, sales promotion, public relations, product development and similar services. The EC Television division (ECTV) was established in 1989 and is a leading producer and distributor of locally produce

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ents, which generally means winning them away from other advertising agencies. McCann-Erickson has a track record of being able to keep its key clients, and also of being able to attract new clients, two elements that are key to its success. In late 1994, McCann-Erickson was awarded the media buying contract for the Black & Decker Power Tool Group, a contract which will help the company's stagnant domestic revenues (Goldman, November 30, 1994, p. B8). At the same time, AT&T divided its media buying contracts among three agencies: McCann-Erickson, the Media Edge and Young & Rubicam. The total contract amounted to more than $64 million (Comiteau, 1994, p. 4). In some cases, the agency is given the task of expanding a product into a new market, or to increase a product's market share. This was the case when the company sought to expand the market for Grant's Glenfiddich scotch in 1994. Most of the scotch that is sold in the United States is blended from several malts; Glenfiddich is a single malt scotch which, according to its adherents, gives it a smoother and fuller flavor. Like other premium scotches, it is aged for 12 years. As a result, it is more expensive than traditional blended scotches (such as Chivas Regal) and has

Category: Business - M