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Curtain rises for Rapp’s third act

If there were any proof needed that people of all ages are embracing new media, then look no further than Stan Rapp. The spry octogenarian’s plans to build a new agency based on using new media to forge more measurable connections with customers were announced last week, with a nifty name, Engauge, and heavyweight backers in the shape of private equity firm Halyard Capital.

Two acquired agencies, Direct Impact and Ten United, form the backbone of the new shop and the plan is to snatch up many more, to add scale and wider disciplinary offerings. Halyard has deep pockets and a thirst for new media; Rapp has a habit of making companies very big indeed.

Rapp is a classic example of the build-and-buy school of business development. His first iteration as agency boss was as co-founder of Rapp Collins. As that company grew from its 1965 launch, so did Rapp’s reputation; accounts of his wild parties at the DMA conferences were relayed to me by more than one attendee. After impressive growth, the agency sold to Omnicom, and Rapp turned to the lecture circuit before his second go-round, having been lured to Interpublic Group to help turn McCann Direct into MRM.

While Rapp did admirable justice to this challenge – the agency went from a relatively small New York-based DM firm with a few offices in major cities overseas into a global agency leader in interactive and direct marketing – IPG has since strained under the weight of a heavily acquisitive period, and its group-wide woes due to this have been a secret to no one.

Rapp’s goal now is to create a company that grows steadily through the ingestion of acquired firms, keeping no brand separate from Engauge. The firm already has 300 employees and about $40 million in revenue. That’s pocket change compared to Rapp Collins’ estimated $300 million-odd, but of sufficient scale to attract both clients and talent.

Of course, at 82 and with a penchant for the jet set, Rapp’s no bean counter. Rick Milenthal, the new CEO of Engauge and former chair of Ten United, uses all the right words when excitedly describing the new venture. It can be hard to pick apart the language that multiple agencies use when describing the convergence of brand and direct marketing, and some of Milenthal’s comments sound very similar to those of firms that have a very different flavor to them. His glorification of the single vision and single bottom line is inspiring, but even some of the holding company-owned agencies are heading that way too, if they’re not already there.

What Engauge has that some others don’t is a man at the helm that has seen the inner workings of the biggest holding companies and their clients. Milenthal says, “We can cut out all the wasteful spending we are seeing in mass marketing. If you find the right model, now is the time to invest in marketing services.”

You can bet that Rapp will borrow plenty of ideas as to how to run the show. And plenty more as to how not to.

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