Media innovator Peter Swain departs MBS

Media buying pioneer shares his past successes - and offers advice for the future - as he steps down from the company he built

International agency groups may be controlled by head offices in New York, London, or Paris, but media management companies – arguably the most important component of marketing communications today – got their start in Canada.

Now the firm that started the revolution has joined the ranks of the mega agency groups and the architect of its growth and development has stepped down.

Peter Swain has sold Media Buying Services, The Media Company (a joint-venture with MediaCom since 1997), and Retail Media to MediaCom Worldwide, part of New York-based Grey Advertising. Swain, most recently chairman and CEO of MBS, has been named non-executive vice-chair of MediaCom and will be advisor to CEO Alexander Schmidt-Vogel for the next year. Annual billings for MediaCom Worldwide (Canada) are estimated to be over half a billion dollars.

Although he’s committed to an international role for a year, Swain is unsure of what comes after that.

‘I’m looking towards a whole new chapter in my life; that’s why I haven’t really committed long-term to MediaCom in New York or anywhere else. How do I want to contribute? It might be some kind of ongoing relationship with MediaCom, but more likely something in the line of [education].’

The industry revolution that Swain spurred began when Peter Simpson opened the doors of Media Buying Services in January 1969, although it took a few decades for the discipline to gain what early pioneers like Simpson believed was its rightful place in advertising.

Simpson was media director of agency Stanfield Johnson and Hill when he decided it was time for media to be front and centre, rather than just an appendage to other agency services.

‘At the time it was pretty radical. When I resigned from the Canadian Media Directors’ Council, half thought I was mad as a hatter, the other half wished they had thought of it themselves – but no one was about to admit that it would be done,’ he recalls.

During the first couple of years most of the MBS clients were small agencies but the breakthrough came when direct clients such as Playtex, Dominion Stores, and K-Tel signed on. MBS grew and Simpson opened seven offices in five years.

He also hired Peter Swain, a young U.K. media buyer with a similar vision, in 1972. Swain brought an education in aerospace engineering, experience at Bates and Ogilvy & Mather in London, and a talent for running a business, to a small office in the wilds of Don Mills, north of Toronto.

Simpson moved on to the film industry after five years, leaving Swain – affectionately known as Swani around the office – to manage MBS. Swain started buying shares in MBS in the ’70s and completed the buyout of the business in 1982.

MBS was alone in the Canadian market until the formation of Harrison Young Pesonen & Newell (now PHD Canada) in 1979.

Under Swain’s watch, MBS continued to evolve to better serve its clients, introducing technology and systems as they became available, and reaping the rewards of continually pushing the media envelope.

The many highlights of MBS’ growth include snagging the job as government AOR in 1979 following the election of Joe Clark and the Progressive Conservatives; it was the biggest account at the time. When the Liberals reclaimed power, MacLaren Advertising regained the account.

MBS was again offered the contract in 1983 when the Mulroney PC government was elected. Swain was uncomfortable with some terms of the contract and turned it down. That prompted the birth of another competitor, Genesis Media, which then won the government business.

Swain says other milestones along the way include taking on all of the Allied Domecq PLC beverage alcohol brands, long-term relationships with Michelin Tires, Paramount Pictures Canada and as Ontario Government AOR, to more recent additions: all of the Rogers companies and the $80 million Procter & Gamble Canada broadcast media buying account.

As he looks back at what he has accomplished during his career and what lies ahead, Swain says one of the things he is proudest of is the staff of MBS and The Media Company.

‘That’s the legacy I hope I can leave here. I couldn’t have done any of this on my own, that’s for sure. I have a tremendous degree of loyalty and faith in the people who have made me successful. Hopefully I’ve made them equally so as they go up the line.

‘We’ve got a fantastic group of people here and that’s a lovely thing to leave behind, for others to move up and go further.’

Strategy recently chatted with Swain about why he found success more attainable in Canada, how he convinced clients to invest more in media, and how media owners in today’s climate have to justify their worth.

What were the reasons for your move to Canada in 1972?

I had just started in the advertising media business a few years earlier in London and I was approached by the first agency that hired me, Bates, to start a thing called a buying service. At that time there was ostensibly no such animal anywhere in the world. I was going to start my own business in England when I heard that there were companies that had started up in North America.

And indeed I discovered one called Media Buying Services when Peter Simpson, who started (MBS), had come to London. So I really came to Canada with the notion of learning from this embryonic MBS with the idea I’d go back to London to set up a company.

When I came here I was rather alarmed because my first morning I was driving to this office that was in the suburb of Don Mills – driving the other way to the traffic. I thought that maybe I’d made a mistake – this wasn’t the giant media operation that I was led to believe. It was a tiny hole in the wall in an industrial park in Don Mills.

That’s not a very promising start – why did you stay?

I was planning on staying here for about two months – and I stayed for three, then six, nine, and then gradually I took over the managing of this little office in Don Mills. So rather than go back to the U.K., I decided that I might as well build a business in Canada as anywhere else.

To be quite honest, one of the great things about Canada – I felt then and still do – is that it didn’t have the class structure, the barriers that were still very evident in the U.K., that you’d gone to the right schools and all that sort of stuff. I found right from the outset here that if you had something sensible to say, you’d be listened to, no matter where you came from. That was one of the great attributes of Canada that I was able to do this here. I actually do not believe I could have been as successful – if at all – in London.

What were some of the obstacles that standalone media shops faced in the early days?

There was a big business inertia against media [management] companies. There was at the time a friendly collusion between agencies and media owners. Spending money on the media department was a real drain on the finances of an agency. I had to go out and explain [to clients] that if more than 90% of their budgets were spent on media why didn’t they give it more attention than the 1% or 2% the agency might spend on their media department.

Frankly, it was a very easy sell. It was remarkable how quickly, and logically, the client side embraced the concept both in Canada and around the world.

It doesn’t take a rocket scientist to figure out that you could hire better people and spend more time on the media buying because the clients were willing to pay it. In the beginning we were welcomed by clients, so we had that going for us.

MBS was extremely successful as an independent. Why did you enter into a joint venture with MediaCom in 1997 to form The Media Company?

I was interested in doing a deal with somebody for one major reason – I loved what I was doing. As an independent, if I wanted to spend money on a new computer system, I could do it and not ask anybody. So getting into bed with another partner was a big deal for me.

While at the time (MBS) was the largest media company in Canada, I knew that was going to be short-lived because I didn’t have deep enough pockets for the research tools. The growth curve we had would atrophy unless I had people who were willing to invest millions of dollars in media research tools. I would be able to bring to our clients and, more importantly, our employees absolutely world-class tools which being independent I couldn’t anymore.

That was the reason for the deal. And it worked. My relationship with MediaCom and Grey over the years has been quite remarkable. They have been a wonderful partner – most of it based on a handshake, based on trust. That bonded me to them, in the sense that I respect the kind of trust that was placed in me.

What are some of the important issues media management companies have to deal with today?

What is happening in Canada particularly, is we’re being asked to take a very senior level seat at the table, a strategic marketing decision-making role. That’s where the future of this business has the potential to go.

That requires a more sophisticated level of employee. We’re now competing against McKinsey not Ogilvy & Mather at this level. That means we have to have that calibre of people on staff and obviously the facilities, computer resources, and so forth to do a proper job of strategic analysis.

If it were my piggy bank, I would be making a big financial investment right now to capture this brand-building, decision-making territory, because clients are asking us to do that.

The downside for us, and we learned the hard way, is that it is quite difficult to get clients to pay the sort of money required to offer this type of service. That’s one of the things the media industry is wrestling with and will for the next couple of years in Canada and around the world.

Are there any other challenges that have to be dealt with in the near future?

Advertising spending is going to shift fundamentally to a new means of communications that is customer-driven. That has to be [dealt with] in the next two or three years or clients are going to say, ‘we are not going to spend any more money supporting media, which is a business unrelated to mine.’ If I’m Ford, why am I spending money to reach my own customer? I know my own customer because I delivered a car to them. I can get to them directly, especially if I move into a new era of UPC codes, that’s where [RFID technology] radio frequency tracking of product will come in.

We buy boxcar numbers. We buy 1,000 good souls and hope one or two might be interested in buying a BMW. That is crazy. Not only are you counting heads, which is debatable, but what is so special about this particular television program or that particular magazine?

Now with technology, an advertiser can communicate more easily with a customer – they don’t need to spend $10 billion subsidizing a completely different business [media owners].

That’s a big issue for media owners – and the wakeup call. They’ve got to spend more money in justifying that [media-consumer] connection.

Peter Simpson

chair and CEO, Norstar Filmed Entertainment, Toronto and founder of MBS

‘When I went [to the U.K.] in the early 1970s, England was still a very impressive place for advertising. We lined up with a number of very hot agencies and it really heightened the growth of MBS in the U.K.

‘Ted Heath was [the British prime minister at the time] and he was going to bring commercial radio to the U.K. – so we decided we would bring out a young guy to learn radio and then go back to set up a new division at MBS. That guy was Peter Swain. He never left [Canada].

‘I opened seven offices in five years. I wasn’t real good at running them but I was real good at opening them. Peter was good at running them.

‘He was terrific – a very adapted, hard-working guy. I sold Peter some shares in the ’70s, and we actually completed the buy in 1982.’

Ron Lund

president, Association of Canadian Advertisers (ACA), Toronto

‘The whole motion of bringing media to the forefront, making it a successful, individual unit can be very much attributed to Peter Swain’s single-mindedness and entrepreneurial focus.

‘For [ACA members], he was very much a main participant, advocate and leader in the whole people meter debate back in 1995.

‘He was a pioneer in terms of pushing research techniques and applying the media science around buying and planning. That’s why a lot of his main clients went to him. He was at the forefront of not taking what the broadcasters said at face value while still being able to leverage off his business partnerships in that area. He never stopped pushing and advocating on behalf of his clients.’

Hugh Dow

president, M2 Universal, Toronto

‘I’ve known Peter since he first arrived in Canada. Because we were fellow Brits, we formed a bond and kept in touch over the years.

‘I’m certainly going to miss him because, without question, he was one of the drivers of the media business in Canada.

‘Through MBS, they certainly demonstrated and showed how media could be run as a business, as a separate free-standing entity. In many respects that spurred the birth and creation of agency-parented media companies such as M2 Universal.

‘He’s always been a formidable competitor. He’s somebody who is a big-picture thinker, somebody who understands the media business from the 30,000-foot level, and most importantly somebody who sees opportunities. He’s a very good businessman and has certainly put that to good use in growing MBS and The Media Company, and enjoying an incredibly successful career and run with that company.

‘I’m sure he will put all of his knowledge to good use on the global front now.’

Marilyn Dixon

COO, MediaCom Services Group, MBS/The Media Company, Toronto

‘As a boss, Peter is very supportive and generous and really concerned about looking after our people. He wanted to make sure we were doing the right thing by everybody. Under him, we’ve started huge summer events and Christmas parties that are the talk of the industry.

‘He really wanted our people to know how much we appreciate them.

‘He’s a driver for sure – driving the business and if successful not just accepting it but understanding how we could do more. He’s done a lot for the industry. He’s very supportive of industry changes and also moving with technology. Our company really tries to push the edges of technology. That was a culture that was started by him.

‘I’ve also done a few renovations with him and I describe him as a frustrated architect. He really enjoys doing that and has a flair for design and art. He’s got a lot of sides.’

Dennis Stoakes

former VP, North American director of marketing

communications (now retired) Allied Domecq, U.K.

‘Peter has a couple of unique abilities. One is that he manages to gather very experienced people around him, the likes of Karin McPherson and Doug Checkeris and many others. They brought things to our organization that we may have dreamed of but our regular agencies didn’t think we could do.

‘They were willing to explore new avenues and as a result we had several breakthroughs. We had brands on television years before anybody else [in the beverage alcohol category]. And it’s all because of MBS and the rapport they had, not only with my brand people but also the key people at the various media.

‘The other thing that Peter brings is counsel. He’s very well rounded and knows media inside out, and also knows the government. When you’re a distiller, you’re dealing with the government all the time.

‘Peter was a huge asset to our organization. We looked for innovative, breakthough media. We were getting great creative but everyday, mundane media and we wanted to push the envelope and get more creative from a media perspective and get closer to our consumer.’

Sunni Boot

president and CEO, ZenithOptimedia Canada, Toronto

‘I think that without him, Canada wouldn’t have led the North American continent in media management companies. Peter was a very good ambassador for the industry. He was always going to be a bigger partner to clients in terms of business advice.

‘He really led media being at the strategic table and he was very credible. He came to it from a business viewpoint where everyone else was coming at it from a media and/or creative and/or advertising viewpoint. That was always, I think, what I personally admired about him. Peter would talk in business terms and everybody else at that time was still talking in communications terms.’