Finding a New Advertising Agency Essay

It started with a pair of certifiable garners to mini the Statess Woodcliff Lake detailquarters in Federal modernistic Jersey in the summer of 2005. One of the letters was intercommunicate to Jim McDowell, depravity president and managing film director of miniskirt ground forces, the U.S. division of BMWs miniskirt auto crack. The opposite letter was to Trudy brazen-faced, merchandising animal trainer for miniskirt USA and a direct report to McDowell. Both letters were from Scheid, Roberts, and Reicher (SRR),1 minis advert authorisation since 2001, and twain arrived at their respective destinations at near exactly the same time.From her desk, which was non in the immediate proximity of McDowells purpose, Hardy sat back in her chair and opened the letter without the beledge that McDowell had full received a similar letter. Her thoughts and earningslings as she st iodin-broke the seal of the envelope and read the unmatched-page letter triggerly confirmed precedent suspicions but, neverthe little, include a sense of great disap gunpointment and whatever violate feelings. A rare occurrence in the client- publicise sanction kin, SRRs letter informed Hardy that they would resign the mini report card in array to pursue a large account with a competing German automobile manufacturer.For Hardy, it was during the next few moments that the gravitational attraction of the event began to sink in. SRR had been the ad representation for mini ever since the months leading up to the U.S. transmit of the juvenile miniskirt make, which was the first young machine despatched by the miniskirt grade since its acquisition by BMW several years earlier. In a time when the eon of a client- ad agency kin typically lasted for just about twain years, the collaboration with SRR had been in her mind a productive one for or so five years. And in the same g everywherenment agency that she believed the relationship had been extremely bl ue-chipto mini, it was alike hard for Hardy to believe that the same did not apply true for SRR as well. In 2001, the mini account stood as one of the first major SRR client wins when it was a start-up agency with fewer than 50 employees. SRR had now grown to much than three hundred employees, and the launch of the miniskirt make was an unquestioned success. In some ways, miniskirt and SRR had grown up together.1 Although this case is based on actual events, Scheid, Roberts, and Reicher (SRR) is a fictional prepare for MINI USAs publicize agency from 2001 to 2005. For simplicity, hereinafter, MINI is utilise as foreign to MINI USA. 2 The BMW congregation maintained a ecumenical rule that each BMW brand adopt its own advertising agency. For example, SRR could not construct for BMW and MINI at the same time.________________________________________________________________________________________________________________ Professor David Godes on the watch this case with t he assistance of Research Associate Peter Wickersham. HBS cases are veritable solely as the basis for class discussion. Cases are not intend to serve as endorsements, sources of primary data, or illustrations of effective or part slight management.Copyright 2007, 2008 President and Fellows of Harvard College. To order copies or request permission to barf substantials, call 1-800-5457685, write Harvard Business School Publishing, Boston, MA 02163, or go to http//www.hbsp.harvard.edu. No part of this publication may be reproduced, stored in a retrieval system, dropd in a spreadsheet, or transmitted in all(prenominal) form or by any meanselectronic, mechanical, photocopying, recording, or differentlywithout the permission of Harvard Business School.Hardy began to think of the task in front her. In one sense, if she were the market placeing manager for al close any some other product, the selection of a mod advertising agency might not have been such a critical task. But th e MINI brand, in almost every respect, was grotesquefrom the material body of the cable gondola gondola car itself to the passionate owners of the car who, for example, often named their MINI cooper as they would a pet or family member. MINIs advertising since the launch of the cooper had been highly unconventional, and although she had no immediate ideas of how to proceed in convalesceing a spic-and-span agency, Hardy k saucily thatthe selection process would need to be just as alone(predicate).The BMW separate and MINImini HistoryWe went round the works, and I drove him at a hell of a speedIm received he was terrifiedbut whe readerore he was so affect by its road retentiveness. We s twitchped outside his office. He got out of the car and he render tongue to, Go ahead and make it. Alec Issigonis, head of human body for the Morris mini small fry (a.k.a, the miniskirt), conversation with Leonard Lord, chairman of British Motor Corporation (BMC), 19583 The twentieth century witnessed the creation of scores of automobiles, but it can be argued that yet a handful of these cars transcended the others to commence cultural icons. For some car enthusiasts, the piteous list of such cars might have included the likes of the Ford fashion model T or Volkswagen Beetle. For those living in the unify major powerdom and atomic number 63 in the 40 years between 1959 and the end of the century, the Mini Minor and its descendants, including the pilot program Mini Cooper, would almost certainly have been counted among them.The genesis for what was to become the Mini was attributed to Leonard Lord in response to the nationalization of the Suez Canal by Egypt in September 1956. Since it was thought this action might disrupt or breatherict the shipment of oil from the Middle East, Lord commissioned Alec Issigonis to spirit a small car intend for those seeking frugal transport. The program requirements were few and simple the ability to seat quadruplet p eople, expend of a BMC engine, and an oerall sizing smaller than that of current BMC cars. Issigonis formed a police squad of eight spiriters and engineers.In one of their first meetings together, Issigonis placed four woody chairs on the workshop tale in dickens rows of two and asked four of his aggroup members to sit in them. They then shuffled the chairs around on the floor until each could sit comfortably in a minimum of blank. The about dimensions were captured in chalk on the workshop floor the passenger space required was to be at least 8 feet 9 inches long, Purchased for use on the MSc internationalistic Marketing, at Kings College London, discussion section of Management. Taught by Douglas West, from 12-Jan-2015 to 27-Mar-2015. Order ref F240566. Usage permitted yet within these parameters other than touch sensation infothecasecentre.orgWell, I guess theyre off to greener pastures, he said in a matter-of-fact tone. After peaching some more(prenominal) about the resignation, they soon turned their attention to finding a modernistic partner. Listen, I have total confidence in you to find our next agency, McDowell assured Hardy. It wont be easy, but you know our brand better than anyone. The only catch is that we should probably have this nailed toss off ahead the end of the year, which means first December. Lets talk more once you have an idea of where youd like to frivol past the search. With those excogitates, McDowell remaining Hardys office.In entree to its small size (and in some cases because of it), the design of the Mini contained several other renowned innovations. It was one of the first front-wheel- require cars, and its engine was mounted transversely so as not to contribute more than two feet to the overall length of the car. The roomy spacing of the wheels allowed for more efficient passenger space, and thus more than 80% of the overall dimensions of the Mini were devoted to luggage and occupants. The design of t he Mini as well as had some other unique consequences.First, the Minis simple layout make it easy for owners to modify the interior and outdoor of the car as a result, customization of the car became common. Second, its wide wheel spacing and low center of gravity made the Mini suitable for development of a racing bod of the car. An acquaintance of Issigonis, John Cooper, created the Mini Cooper in 1961 to be dictated in rally races. The Mini Cooper was quite successful,winning the esteemed Monte railway carlo rally in 1964, 1965, and 1967. In all, around 150,000 Mini Coopers were produced.The fabricate version of the Mini was a success in margins of whole sales. It in any case attracted a cult-like following. Each of the four Beatles owned a Mini as did Peter Sellers and many other famous British celebrities of the day. In 1995, the Mini was voted Car of the Century by readers of Autocar, a U.K. car cartridge holder publisher.BMW Acquires MiniAlthough the Mini was univer sally considered a success, the same could not be said for the succession of parent companies that owned the brand. In 1968, British Leyland was formed when BMC interconnected with the Leyland truck company. In 1975, British Leyland went bankrupt, and the companywith classic brands such as Jaguar, rover, MG, Triumph, and Miniwas bought out by the British government. In 1988, the collection of live brands, now referred to as the Rover Group, was sold to British Aerospace, other nationalized company. on the way, there were notable investments made in the Rover Group by other car manufacturers, including Honda of Japan, which owned approximately 25% of the company at one time.Yet, the greatest investment and perhaps the biggest surprise occurred in 1994 when BMW, the German luxury automaker with 1993 sales of $18 billion, acquired Rover and its brands, including Mini, for $1.2 billion. In the eyeball of senior management at the BMW Auto Group (AG), the vision for the grease ones palms of the Rover Group was to take the company into a pertly introductionwide era. Bernd Pischetsrieder, who was named chief executive officer of BMW AG in 1994, explained it this way The primaeval to success is continuously changing your focussing over the long term . . . in the 80s, we focused on enhancing the engineering process.Thekey emphasis for the 90s is globalisation of the entire business, including financing, product engineering, styling, designing, manufacturing, and sourcing.4 Similarly, some industry analysts believed that BMW could not concede to compete solely at the luxury end of a maturing mankind car market. The acquisition of the Mini brand and the decision to develop the tender MINI was seen as a solid strategy to offer little expensive cars without jeopardizing the integrity of the BMW brand.5 According to an analyst with Commerzbank, By slightly modifying an active brand, effectively inserting a new vehicle into it, it avoids having to pay all th e upfront costs associated4 J. P. Donlon, Honk if you are global (interview with BMW CEO Bernd Pischetsrieder), tribal chief Executive, October 1, 1994. 5 BMW differentiated the new version of the Mini from the original by capitalizing all four letters when referring to the new model (i.e., MINI).3Purchased for use on the MSc International Marketing, at Kings College London, part of Management. Taught by Douglas West, from 12-Jan-2015 to 27-Mar-2015. Order ref F240566. Usage permitted only within these parameters otherwise contact infothecasecentre.orgfeet 2 inches wide, and 4 feet 4 inches high. Ultimately, once the engine and luggage space were added, the Mini was designed to be just 10 feet in length (Exhibit 1).MINI USA Finding a new-fangled Advertising Agency (A)with developing a new brand. The costs of brand building cannot be underestimated, as anyone at Daewoo would be quick to point out.6Not included in the deal to divest the Rover division, notably, was the MINIbrand as well as the manufacturing facility come Oxford, England. We knew we had a winner there. Much to the chagrin of the British, we held onto it, McDowell would say later.Educational material supplied by The Case CentreCopyright encoded A76HM-JUJ9K-PJMN9IOrder reference F240566 aim a youthful MINIThe design and development of the new MINI in the mid-1990s was to some at BMW the embodiment of the larger struggle to immix the cultures of Rover and BMW. Between 1994 and 1999, there existed two divert MINI design teamsone British and one German. The British-based Rover designers and engineers for much of that time fancy a revolutionary design of the new MINI. One such MINI concept was distant, the previous Mini in almost every way but was seen as a contemporary interpretation of Issigonis vision of building a small car with maximum passenger space (Exhibit 3). BMWs designers took a more evolutionary approach in terms of design combined with BMWs reputation for verbaliseing high-perfo rmance, driver-oriented cars. On one night in 1998 at his home in Munich, Frank Stephenson, a BMW designer in the first place from the U.S., cast himself into the fiber of Issigonis, who was known for doodling designs of cars on the back of napkins.On a kitchen towel, Stephenson sketched a series of updated versions of the original Mini to reflect modern trends in design and new engine room see Exhibit 3 for a sample sketch.7 In the end, it was Stephensons design that would form the basis of the new MINI. The official launch of the MINI was held at the Paris auto destine in 2000. During the show, senior BMW AG executives and Stephenson unveiled the new MINI to a rousing ovation. In explaining its design, Stephenson said, The MINI Cooper is not a retro design car, but an evolution of the original.It has the genes and many of the characteristics of its predecessor, but is larger, more powerful, more muscular and more exciting than its predecessor.8 Two issue models were to be la unched in the U.K. (its historical home) in July 2001 a base model called the MINI One and a more upscale MINI Cooper. A sportier MINI Cooper S was to be launched soon thereafter in the U.K., and two the MINI Cooper and MINICooper S were scheduled for launch in the U.S. as well as other parts of the world in early 2002.Even though the first MINI Coopers were not scheduled to arrive until early 2002, work was well underway in 2000 to free-base an organic law to concomitantthe launch of the MINI in the United States. MINI USA was established as a division of BMW of conjugation America LLC and would dish out the same headquarters in Woodcliff Lake, New Jersey, as its parent organization. Jack Pitney was named general manager of MINI USA, a unique distinction for someone with a marketing background as op pose to automotive engineering, manufacturing, finance, or sales.Kerri Martin was appointed MINIs marketing communication theory manager. Trudy Hardy was to a fault recruited in 2001 as brand communications manager of MINI, reporting to Martin. The MINI USA headquarters organization was designed to be small (fewer than 25 employees), nimble, and highly yeasty. From the start, the credo of the organization appeared to be, If another car company might take the same approach, MINI ought not. Martin, for instance, was commonly called by the title keeper of brand soul instead of marketing manager. hightail it proceeded quickly. By the end of 2000, www.miniusa.com was live and already receiving hits.As with the MINI USA headquarters organization, the existing BMW infrastructure was utilized to create a earnings of U.S. MINI dealerships. Nevertheless, in a similar fashion, great lengths were taken to establish MINI as its own brand. Approximately 70 dealerships in 31 cities were renovated to add an exclusive MINI showroom under a separate marquee. In total, across all U.S. dealerships, first-year MINI sales objectives were pass judgment to be 20,000 units, an amount Pitney viewed as aggressive but within reach. household retail sticker equipment casualtys for the MINI Cooper and MINI Cooper S models were set at about $18,000 and $21,000, respectively, including dealer shipment fees.Additionally, leveraging the report of customizations to the original Mini, each model carried an extensive list of optional equipment and exterior color schemes. For instance, the car roof alone could be painted at the factory with one of more than 10 color schemes, including a black and white(p) checkerboard pattern as well as an image of either the Union Jack or American flag. Early expectations were that the MINI Cooper S would capture approximately 80% of sales due to its larger engine and better acceleration. Depending on the amount of optional equipment selected, the total price of a MINI Cooper S could exceed $25,000.Given its design and price range, plans were to position the MINI Cooper as a aid small carsomething that MINI saw as a new market niche. This was especially true because the MINI Cooper was smaller and more expensive than some of the better-established compact cars made by Honda, Toyota, and Nissan. Initial MINI marketing materials and media reports from auto shows portrayed the MINI Cooper as a fashionable accessory to an affluent, urban-hipster lifestyle.9 However, early market research besides indicated that the target market for the MINI was not limited to a particularized demographic group or socioeconomic class but sort of was more of a lifestyle choice or expectation. For example, in surveys conducted before launch, possible MINI buyers in the U.S. described themselves as young at heart or free spirited, a finding that was consistent among both young as well as older age groups.Moreover, the potential MINI buyer appeared to be less concerned by the opinions of others and was self-directed minded. MINI and BMW AG drew a number of conclusions from this initial research. First, it was trenchant that further research should closely examine the psychographic factors associated with the purchase of a MINI, since the most fervent of potential MINI buyers seemed to have a common mind-set about the car, which was something that Pitney and others hoped to explore in greater detail. Second, the research confirmed to them that, unlike the original Mini, the new MINI should not be marketed as a car for the masses but instead to a particular divide of car buyers. Third, although it created 9 Suzanne Vranica, Cool Mini Cooper Prepares for Relaunch, The Wall thoroughfare Journal, February 14, 2001.Pitney and Martin thus recognized the importance of selecting an advertising agency with experience in nontraditional advertising such as promotional events, online advertising, and direct marketing. no(prenominal) of the large advertising agencies known for television advertising were invited to pitch the account, a decision that many industry observers viewed as bold and against the grain. D aimlerChryslers Chrysler Group unit, for example, had recently consolidated its $1.5 billion ad account at Omnicom Group. MINI also decided to base part of the compensation of the ad agency on the collective opinions of its dealers, something that was unique in advertising. Following a fourmonth review, SRR was selected as MINIs agency of record. A separate firm, Circle.com, was selected to handle their online technology strategy and customer relationship management (CRM) duties. Although MINI would not find out it publicly, the MINI account was valued at about $25 one thousand million per year in terms of total marketing spend, a comparatively modest size for an automotive client.Lets Motor The U.S. effect of the MINIThe U.S. Launch Campaign (20012002)By July 2001, in the eyes of Pitney, Martin, Hardy, and the rest of the MINI team, both the marketing strategy and the creative focus of MINIs U.S. launch (scheduled for March 2002) were taking shape. Moreover, they matte up that the desire to do things differently at MINI had been taken to a whole new level. Most crucially, the marketing team had decided not to use any television or radio advertising as part of MINIs launch, an industry first for what was essentially an entirely new automobile brand in the U.S. market (it had been almost 40 years since the original Mini was sold in the U.S.). kinda, a phased approach using bell ringer and nontraditional marketing techniques was authentic.During August and September 2001, MINIs focus wasto build brand awareness primarily finished sucker advertising in magazines. The tagline for the ads was Lets Motor, a theme developed by SRR and that would be carried throughout the launch cause in 2002. The use of the word Lets at the beginning of each ad was intended to create a feeling of inclusiveness, and the tone of the ads was intended to be kindly and funny. For example, one ad read Lets not use the size of our vehicle to compensate for other shortcomings. Le ts Motor. another(prenominal) began, Lets put away the middle finger.In addition to initial print advertising in magazines such as Autoweek, SRR developed The arrest of Motoring, a 5-inch by 5-inch glossy booklet designed to start exactly what it meant to be a motorer. How is motoring different from driving? it posed to the reader. Physically, theyre the same process . . . the difference is in the mind of the streetwalker . . . when you drive, you go from A to B . . . when you motor you go from A to Z . . . its all about living . . . nobody can describe you when youre motoring . . . you just know. The book also suggested that motorers pay the monetary value for the car behind them or feed parking meters if they see a meter maid coming. Motorers look out for one another, the book said. The Book of Motoring could be obtained through BMW dealers or the MINI USA website.In October 2001, in addition to continued print advertising, the SRR and the MINI marketing team designed a serie s of promotional events and publicity stunts to create surplus buzz for the brand.Purchased for use on the MSc International Marketing, at Kings College London, Department of Management. Taught by Douglas West, from 12-Jan-2015 to 27-Mar-2015. Order ref F240566. Usage permitted only within these parameters otherwise contact infothecasecentre.orgchallenges for the manufacturing team in Oxford, England, it was give notice that the target market would likely seek to make their MINI unique by adding optional features and color schemes. Finally, it also became likely that limiting their advertising to traditional media such as television and radio would not be cost effective, since the MINI itself was not a mass-market carand since its potential buyers seemed less interested in being part of the mainstream.In one example, for a Formula 1 car race in Indianapolis, MINIs were secured to the top of triple fullsize sport-utility vehicles and were driven to the city from other parts of th e U.S. carrying signs that read, What are you doing for fun this pass? The same MINI-toting SUVs then toured some 24 U.S. cities (Exhibit 4). When curious onlookers asked about the car, representatives were instructed to give them a card that said Coming to America and directed them to the MINI USA website. Sporting events were also used as venues to promote the car. For instance, a MINI was placed in the stands of an Oakland As baseball pole and in the Superdome for a Monday Night Football game (Exhibit 5). As part of this promotion, during the game, the announcer did a series of callouts that drew the attention of the fans in attendance to the MINI. As one example, he announced To the gentleman in Section 101, youve left your lights on. When the in-stadium camera focused on the MINI in Section 101, its lights flashed and then shut off. This particular promotion also played a role in the firms attempts to anthropomorphize the MINI.When the official launch of the MINI Cooper began in March 2002, MINI and SRR continued their grass-roots marketing efforts and print advertising in combination with outdoor advertising using, most notably, billboards, which they felt were underutilized by other car brands. In all 45 markets where the new MINI was to be sold, teaser billboards were posted on the day that showrooms were opened. Instead of displaying the car or its logo, the billboards only included the companys website, miniusa.com, and a single line of text. One billboard read, XXL XL L M S Mini. Another read, The SUV backlash officially starts now. Then, in April, a new series ofbillboards were rolled out that included a photo of a MINI, the MINI logo, and the Lets Motor tagline. Slogans included, Lets imbibe Not Guzzle, referring to its above-average fuel economy.The outdoor advertising was taken to the extreme in cities like New York, where a skyscraper was wrapped to represent the cars two-tone paint job and a 29-foot-by-125-foot billboard was erected in Time s Square. though typically considered a traditional medium, print advertising was used by MINI as nontraditionally as possible. In late 2001, for instance, executives from 35 magazines were invited to MINIs headquarters to brainstorm unique ways to market the new MINI in print. One noteworthy outcome of this session was a proposal to use the margins around news stories to hold advertisements. At launch, the cornering ads, as they were called, were run in six magazines, including Rolling Stone and Motor Trend. The ads said, cypher corners like a MINI and contained a photo of the Mini Cooper S cornering the one-inch margin of the magazine page. Other aspects of the launch campaign included the following (Exhibit 6)More than 6 million magazine inserts of an abridged version of The Book of MotoringA series of MINI-inspired cartoons featured in The New Yorker magazineOther magazine inserts including an unscented MINI-shaped air freshener and a pullout car game. Another insert allowed re aders to customize the car using peel-off stickers accessories such as wheel covers, blowers, and racks could be placed on a photo of a MINI in the ad.In total, more than 30 million magazine inserts were published in magazines ranging from Car and Driver to Vanity Fair. The MINI organization was veryhappy with the creative output of SRR. Conceptually, just about every one of their ideas was spot on, Hardy said. Besides the fact that they really got the brand, they also made sure that the ideas they showed us were fleshed out and developed. This extra effort on their part really made it easier for us to react to the ideas and to give them substantive feedback so we could work together to make them come to life. MINI and SRR mean to explore other advertising media as 2002 wore on, just not television. quite an than use TV advertising, for example, MINI opted to sign a deal with subject field Cinema Network, a movie theater network, to show 30- and 45-second advertisements on appr oximately 2,000 screens in five cities.7Purchased for use on the MSc International Marketing, at Kings College London, Department of Management. Taught by Douglas West, from 12-Jan-2015 to 27-Mar-2015. Order ref F240566. Usage permitted only within these parameters otherwise contact infothecasecentre.orgBy the close of 2002, there were several reasons for MINI and SRR to celebrate. Most obvious were the closing MINI sales figures, which indicated that 24,590 units had been sold in a little over nine months. At that pace, first-year sales were projected to total over 30,000 units. In addition to the strong sales figures, a consumer survey indicated that brand awareness for the MINI among the carbuying public was 25%. A survey indicated that 75% of MINI buyers had read or heard about the MINI throughpublic relations and Internet exposure before the official launch advertising actually began in March 2002.The launch campaign also earned both MINI and SRR a significant number of awards , including Adweek magazines 2002 Guerilla Marketer of the category and 2003 Media Plan of the Year honors, the 2002 Kelly Awards elevated Prize for Outstanding Magazine Advertising, and two 2002 Cannes Media Lion prizes. SRR also won the Best of Show Award and an award for innovation in marketing at the annual One Show awards, a prestigious event sponsored by the One Club for Art and Copy in New York. At the same awards ceremony, MINI USA received the Advertiser of the Year Award. Pitney was named one of two Automotive News Marketers of the Year (the other was awarded to Jim McDowell, vice president of marketing for BMW of trade union America). In January 2003, the MINI was selected as the sum American Car of the Year by the same publication. The MINI Cooper and MINI Cooper S were selected as finalists for the Motor Trend Car of the Year as well.The Creative Work Continues (20032005)By all accounts, the relationship between MINI and SRR was felt by both sides in 2003 to have be en a highly productive collaboration to that point. Each day we came to the office thinking that we had one of the best jobs in the world. In a sense, SRR was just part of the family. Wed interact and debate ideas on a weekly, sometimes daily, basis, Hardy described. It was a close working relationship.Over the next two years, MINIs strategy of using primarily nontraditional advertising in combination with print and outdoor advertising continued, as did SRRs ability to develop unique creative material in support of this strategy. One magazine campaign featured punch-out, assembleable versions of the MINI Cooper construct on a 156 scale. About 4.4 million inserts were created, featuring two cars with different combinations of accessories, and came complete with assembly instructions both cars became collectors items.In another campaign, consumers could pull out MINI cartoon-character decals from magazines. The stickers came eight per sheet and were designed to drive buyers into deal erships for a ninth sticker. Approaches like this one were well received by dealers, including Wayne Youngblood, generalmanager of Motor City Mini near Detroit. Im thrilled with it MINI marketing is quirky, fun, and it delivers customers that match the vehicle perfectly, he said. In my 30 years in the business, there has been no other product that commands as much excitement or attention as MINI.10Sales of the MINI Cooper continued to climb (Exhibit 7). In 2004, a MINI Cooper convertible was added to the model lineup. Changes would soon be underway, however. In March 2005, Martin announced that she was leaving MINI to become director of market development for Volkswagen of America, a company known for spending about $500 million annually in North American advertising. approximately the same time, Pitney and McDowell made the unique decision to switch jobs as general manager of MINI USA and vice president of marketing for BMW of North America. But the ultimate surprise was SRRs resi gnation of the MINI account in order to become the agency of recordPurchased for use on the MSc International Marketing, at Kings College London, Department of Management. Taught by Douglas West, from 12-Jan-2015 to 27-Mar-2015. Order ref F240566. Usage permitted only within these parameters otherwise contact infothecasecentre.org for Volkswagen. By then, Hardy had assumed Martins duties as head of marketing, and one of her first challenges was starting over and finding a new advertising agency, which would not be easy given the unique relationship that MINI enjoyed with SRR.Advertising AgenciesWith each passing year of technological advancements, it was apparent to MINI and others that the foundations of any advertising firmcreativity and the ability to deliver creative content in a variety of mediawere becoming less and less the exclusive domain of bigger advertising firms with extensive production staffs. Consequently, it was possible for a one- or two-person shop to perform the same creative services as a large, multinational advertising conglomerate with billions in revenues such as Omnicom, WPP, Interpublic Group (IPG), and Publicis. Advertising firms in 2005 could be categorise into either of these two groups, but a third group also existed. The independents, as they were called, were privately owned firms with anywhere from about 10 to 300 employees. As was the case with SRR, oftentimes these firms were started by young, entrepreneurial advertising professionals facial expression for creative freedom or autonomy following stints at one or more of the publicly held multinational firms.Seen by some to be a competitive response to the growth of the independents, consolidation was a significant theme in the advertising industry during much of the 1990s and early twenty-first century. Over this period, the major holding companies appeared intent on expanding market share in order to gain economies of scale, diversifying their revenue streams, and serving c lients as a one-stop shop while growing into large, multinational players. In 1993, for example, the top three agency holding companies captured a 36% share of the market. By 2003, this figure had increased to 50%.11 The increase in market share was largely achieved through acquisitions of independents and smaller holding companies, with the bulk of these acquisitions occurring from 19962001. One holding company, IPG, acquired 240 companies during that period.Another significant industry theme was the shift in agency compensation over the past decade from commissions to fee-based compensation. Traditionally, advertising organizations had been paid at a set percentage of an advertising budget for the creative work on an account this percentage wastypically in the 12%15% range but could be as high as 20%. A major criticism of this compensation system was that it did not coordinate the agencys pay with the success of a particular campaign or with the amount of work required to create the campaign. The fee-based system (or FTE model) aerated production fees and employee hours along with a standard profit margin (e.g., 20%) for the advertising firm. In 2005, it was estimated that 80% of all advertising clients had moved away from commission-based compensation structures to enter fixed fees or a combination of fee and incentive compensation.