Repositioning Done RightJanuary 29, 2016
By Jörg Pierach, President
The news that holding company IPG has decided to mothball the Mithun brand and lay off staffers at the venerable Minneapolis agency was rather jolting. Just over a year ago, Mithun had announced a name change as part of an effort to reinvigorate the brand and reposition the firm to better compete in today’s environment. It appears from where I sit that the IPG suits in New York weren’t as patient as they needed to be.
This repositioning stuff doesn’t happen overnight.
Back in 2006, we announced that we were repositioning our firm to a more integrated proposition. We launched in 2001 as a PR firm, but saw a big opportunity to grow by offering our clients a broader suite of marketing services, many in emerging disciplines like social media and branded content. We said back then that we didn’t know how all of that was going to shake out, but we felt strongly that the market had come to define PR too narrowly, and we weren’t going to wait around to find out what the new landscape would look like. We wanted to help shape it. Some in the industry rolled their eyes, while others wondered if we’d gone off the deep end. We’d been growing quickly to that point, and were building a reputation as an emerging firm locally and nationally. It was a risk to be sure, but we felt we were doing it from a position of strength. So we announced our intentions and began to take the steps necessary to reposition ourselves.
And then our business promptly tanked.
We lost 25 percent of our revenue in the year after we announced our repositioning. The economy was starting to go south, and certainly some of our losses can be attributed to that. But truthfully, the phone stopped ringing. We had stopped marketing the firm to the PR industry because we didn’t want to be kept in our old box. Meanwhile, traditional ad agencies who had been strong referrers of PR business also stopped calling. They began to see us as potential competitors, and they weren’t wrong. But we also didn’t have the kinds of case studies, staff or reputation back then to get us invited to pitch outside of our strength in PR. The market simply didn’t know what to do with us, and our business began to suffer as a result.
Despite the heavy revenue hit, nobody here lost their job. We knew the only way to get through it was to fiercely protect the strength of the agency, and that was our people. And we were confident that if we stayed committed to our repositioning, that the apparent risk we were taking by peeling the PR label off the firm would be rewarded.
And then, slowly but surely, it began to work. Within a couple years, some of our competitors began to follow. They saw the same opportunity we did. In fact, in a 2012 analysis of the Minneapolis market, Ad Age noted what we had come to believe in 2006: “… a lot of Minneapolis agencies seem to be ahead of the curve by offering clients integrated services — media to PR to social all under one roof — which could pay big dividends down the road.”
Today we call ourselves an “integrated creative agency,” and that road that has been a long one for us. But we are among those seeing big dividends by getting ahead of the curve. In 2015, we grew by 78 percent. We added 18 people to bring our head count over 40. We still do a lot of what the market calls PR, and we like to think we are as good as anyone at it. In fact, it’s a been a huge advantage when we pitch against firms who have no expertise there. But over the years, we have managed to move well beyond our PR heritage, and our work has never been more diverse. Today we do a significant amount of work in brand strategy, digital, design and content, yes, even traditional advertising. The constant? Ideas. We have always been good at making a lot of noise in the marketplace for our clients with relatively modest investment. We’ve always said, “Big ideas trump big budgets.” It’s in our DNA. And that philosophy is one of the reasons we’ve begun to see the big dividends Ad Age foretold.
But it’s not the only reason. And that’s why the Mithun story is such a sad one. These things take time and they take committed people. Clearly some good and committed people were shown the door with IPG’s decision. And it seems to me that perhaps those good and committed people were not given enough time to execute their plan.
It doesn’t have to be that way. And I like to think Fast Horse is proof of that. RIP Mithun.