NEW YORK — McCann Relationship Marketing (MRM) acquired DM agencies in Japan, Australia and Spain last month, boosting its global network to 36 offices in 30 countries.
“By the first quarter of next year we are looking to be active in every major world market and at the end of 1999 we are projecting $1 billion in capitalized billings for MRM worldwide,” Stan Rapp, the company's CEO , said.
MRM is the new name for McCann Erickson Direct, a company whose CEO Rapp became in January of last year. He changed the name to “relationship marketing” because, he claimed, the term encompasses all industry activities the phrase “direct marketing” no longer does.
Rapp said he planned to complete his European network in early 1999 by acquiring agencies in Italy and Sweden. The company now has outlets in Spain, France, Germany, the Netherlands, Denmark, the UK and Norway.
“We expect to be in South Africa early next year and to complete acquisitions in Argentina and Brazil before the end of this year and in Mexico in the first quarter of 1999.”
Earlier this year MRM bought Dittbord and Unzuetpa, a Chilean agency. It also has offices in Puerto Rico and Colombia.
In Asia Pacific MRM bought ISD, a Japanese database management companies with billings of $25 million and clients including Oracle, Boston Scientific, Lancôme and AIG. In Australia The Direct Company, a financial services specialist with $20 million in billings joined the network.
Asked why he bought a Japanese agency at a time of growing economic woes there, Rapp said “it remains the world's second largest market and even in a recession it is still the second largest, and Japan will recover.”
Besides, he argued, one-on-one marketing “almost invariably” grows during a recession because “you offer clients the opportunity to get direct, measurable return on investment.” ISD, he noted, grew 20 percent this year.
MRM already had one agency in Japan and now has two. It has major direct agencies in three Indian cities – New Delhi, Bangalore and Bombay – and a small agency in Manila.
“We are cautiously looking at opportunities in other part of Asia but of course within the context of the financial crisis” that has gripped so much of Southeast Asia.
When these economies recover, Rapp said, “they will come back as new economies. They will be more technology driven and the marketing will be more individualized because in effect they will be re-emerging in the 21st century.
“And they won't be carrying a lot of baggage that traditional western economies still carry. We want to be there when that happens. We very definitely want to be in China,” he added, though for now the Hong Kong office services only one client – Cathay Pacific Airlines.
As for the strategy behind this global expansion, Rapp reaches for the “the whole spectrum of services that come together to make the relationship happen.
“That has to include planning, the agency contribution, the database service bureau and the telemarketing company which we are using in different markets depending on market conditions.”
On the creative side of the network Rapp believes in what he calls “transculture,” i.e. taking the message and reinterpreting it for each market.
The talent needed to handle “transadaptation” which is “what we do when we take say a UPS message and move it around the world,” comes from everywhere. “It's in New Zealand, in Denmark and in Kuala Lumpur.”
Soren Kenner, the regional director for Europe, works out of Copenhagen and a Frenchman, Alain Philippe, handles the same job for Latin America.