THE AGENCY BUSINESS: MWW's Kempner offers keys to success in the current climate

Michael Kempner set off on a solo project and - 14 years later - sold it for nearly $40 million. Here, the CEO of MWW Group addresses startups, procurement, and the state of the agency.

Michael Kempner set off on a solo project and - 14 years later - sold it for nearly $40 million. Here, the CEO of MWW Group addresses startups, procurement, and the state of the agency.

The Agency Business: What's your view of the economy now, versus a year or six months ago? Michael Kempner: It's definitely better. I don't think it's quite as robust as the stock market would make one believe, but it's definitely better. The new business pipeline has gotten considerably stronger. There's also an intangible feeling of positive momentum, which fuels itself. No one knows whether it's truly getting better or just a mirage. The signs are pointing in the right direction. We'll know for sure several months from now whether it actually turned around. TAB: What do you think of the procurement phenomenon we're hearing so much about? Is it as big a deal as people think it is? Kempner: I think it depends on how long it lasts. If it's a permanent change, I think it has significant long-term impact for our industry. It depends if clients like the results they get. TAB: What's the impact? Is it strictly pressure on margins? Kempner: People are assuming that to be the case, but I don't think there's been enough of it yet that people really know. I mean, I've spoken to some very enlightened procurement people, and I've also spoken to people who have never purchased anything more complicated than a light bulb but are now in charge of securing PR services for their company. So a lot of it depends on who the procurement person is and how enlightened they are. I don't know if it necessarily means bad things yet, but it definitely means changes. TAB: What can firms do to prepare for the involvement of procurement? Kempner: Run your business well. You can do well whatever the obstacles are in front of you. They're just challenges; there not necessarily disasters. You have to be willing to understand and accept what the market wants and then move your business toward the needs and wants of the current marketplace. That said, I think there's going to be an education on the client side of what works and doesn't work in that process. TAB: Do you think it's harder or easier to start a firm now or when you began in 1986? Kempner: I've always believed that there are opportunities in all economic cycles. We were founded in the recession of the late 1980s. And we used that as an opportunity to come in and provide great value at a lower cost at a time when companies were looking for other solutions and didn't have the budget for the big agencies. I'm a bit surprised that we did see other entrepreneurs use this recent recession as an opportunity to break through the clutter and really become a big agency in an environment that seemed to lend itself to an aggressive small firm. TAB: Is it more important nowadays to be a niche firm, as compared to when you started MWW Group? Kempner: That's always been a debate, and we've been criticized for not specializing in just one area. We had large tech practice in the late 1990s and early 2000, but we weren't a tech boutique and we were criticized for that. Throughout our 18 years, I have seen different cycles. There are cycles where you're better being a generalist and others where you're better being a specialist. I've always believed that a firm should do many things and have deep specialties across the board. If you are totally dependent on tech or biotech or consumer, you are subject to one segment of the economy. It may be hot for a while, but no segment is hot forever. If you have a broader offering, you can ride different waves of the economy. TAB: What's more important early in the life of a company - growing the top line or keeping your margins where you want them? Kempner: I think it's always more important to maintain your margin. You can't keep growing your top line if you're not in business. So we have never been a firm that has taken business just to take business. We've always been a firm that's focused on our bottom line. That said, it's not mutually exclusive - they really work hand in hand. You can't grow your bottom without growing your top line. Sometimes you have to say "no" to a piece of business you'd lose money on. Now when you're smaller - and even us today - you'll take a risk on a piece of business because you need it for marketing purposes, but you can't take too many of those or you'll go out of business. ----- MWW Group facts
  • Michael Kempner, president and CEO of MWW Group
  • Founded MWW Group as a one-man firm in 1986
  • Sold firm to Interpublic's Golin/Harris International in 2000 for an undisclosed sum
  • MWW Group was the fourth-largest independent PR firm at the time of the sale, with revenues of $37.7 million that year

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