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Superbrands case studies: Carat

Originally published in Business Superbrands 2002. The book reviews the UK's strongest business-to-business brands as judged by the independent Business Superbrands Council.

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Market

Carat is the largest independent media and communications specialist in the world. In the UK it is the market leader, with 7% of a £9bn market.

The media and communications market in which Carat operates is growing (up 23% since 1996) but is also becoming increasingly diverse. Carat's competitors today include media planning and buying groups as well as management consultancies, media auditing companies, creative agencies, below-the-line communications companies, sponsorship specialists and market research businesses.

On a global basis Carat employs 3,000 people and has billings of $11bn (£7bn), across 100 offices. In Europe, as in the UK, it holds the number one slot for media planning and buying. 2,300 people are employed by Carat in Europe, of which 480 are based in the UK.

Carat is wholly owned by Aegis Group, which is listed on the London Stock Exchange.

Achievements

Carat's growth to become the UK's market leader has undoubtedly been its biggest achievement. In 1990, Carat billed £100m and was ranked ninth. With the exception of the acquisition of Yershon Media Group in 1997, Carat's growth to billings of £560m today has been entirely organic. Its ability to win new business from some of the UK's largest blue chip advertisers has been the bedrock of its success.

Carat's client list today is the envy of many of its competitors, with Renault, Royal Mail, News International, Guinness/UDV, and Asda listed among its 120 clients.

Success in its core media business has enabled Carat to expand its proposition, and the company now has dedicated business units in areas such as B2B media, consumer and media research, sponsorship, data planning and interactive media.

Through both the core business and its subsidiaries, Carat has been instrumental in creating some of the UK's most famous communications campaigns, including Cadbury's well-known sponsorship of ITV's 'Coronation Street'. It has also been responsible for numerous new product launches, including Renault Clio, NTL, cahoot, American Express Blue Card and Smirnoff Ice.

Its work for the relaunch of the Mini in 2001 included actual size, fibreglass models of the car climbing up poster sites across the UK. One of the UK's biggest ever giant poster campaigns, the billboards carried the strap line 'New Mini attempts to climb up building. Succeeds. The end.' The Mini campaign executed by Carat also included cinema advertising, and the sponsorship of ITV's flagship drama 'Cold Feet'.

Carat's work for NTL included its sponsorship of ITV's 'Who Wants to Be a Millionaire?' At the time, the show reached some 10.3m viewers each week, and by the end of the year over 50% of the UK population was aware of the sponsorship. In 2001 when the Six Nations competition was taking place, Carat purchased a giant building wrap opposite the Cardiff Millennium stadium for NTL, who were at the time sponsors of the British Lions rugby team.

In addition to its work for clients, Carat is known for its ground breaking work in consumer and media research. Carat's Consumer Connection Study (CCS) which surveys 10,000 consumers' attitudes towards brands, media and advertising, has been utilised by more than 30 UK advertisers. CCS delivers a deeper understanding of a brand's consumers and their affinity to different media, driving more effective communications. CCS recently received in-depth coverage in many national newspapers including The Sunday Times and The Independent.

Carat's PROBE TV system quantifies viewer attentiveness to TV advertising. Factors such as the frequency of channel hopping, and the length of time a programme is viewed are applied to audience ratings to create an attention-weighted viewing figure. Previous research has shown that people who pay attention to a TV programme are 70% more likely to remember the advertising placed within that programme.

Media is primarily a people business, and Carat's ability to recruit and retain the best talent is critical to its business success. Carat was the first media company to be awarded Investors in People (IIP) status in 1998, and the company retained the award in 2001. Carat also entered the Sunday Times Best Place to Work survey in 2001 as a clear statement of the extent of the company's ambitions for its human resources policy.

Carat was awarded Media Week's Agency of the Year accolade in 2000, in recognition of its new business success and the quality of its people.

History

Carat in the UK originally existed in the guise of TMD. Founded in 1972,TMD (The Media Department) was one of the country's first media independents and was bought by parent company Aegis in 1990. Originally branded TMD Carat, the business re-branded as Carat in 1998.

Although only one of the original staff remains, the 1972 client list included Britannia Music and Rothmans, both of whom are still among Carat's clients today.

Carat has grown consistently since its inception and, even in today's battleground of global creative agency groups, remains fiercely independent on both a local and a global basis.

Product

Carat's approach to media communications is exemplified by its core process, the Carat Sphere. Because brands increasingly use diverse media to talk to consumers, the approach is about putting the brand first and ensuring that all communication channels are explored and exploited where appropriate. Nine business units support the Carat Sphere process.

The Client and Communications Management business unit has responsibility for communications planning and client management. This team is dedicated to providing advice and evaluation across all advertising channels. Carat Broadcast, a team of 71 people, offers expertise across television, radio and cinema including detailed planning, spot advertising and direct response campaigns.

Carat Press is the largest buyer of print media in the UK and delivers solutions ranging from display advertising to inserts, sponsorship and promotions, direct mail and regional media. Carat Business is a team of B2B advertising specialists operating across all media. As the nature of B2B advertising is frequently multi-country, this team operates on both a UK and a global level.

Carat Insight is a specialist company focused on driving clients' return on investment from communications by understanding their consumers and measuring the impact of communications on consumer behaviour and attitudes. Carat Insight uses a variety of bespoke qualitative and quantitative research techniques on behalf of all Carat clients, in addition to undertaking project work for other advertisers.

Carat Interactive is a specialist in all online media. In 2000, it purchased roughly £15m of interactive media -- some 12% of the total UK market. As with Carat Insight, the interactive business operates on behalf of Carat clients as well as other advertisers, including many online businesses.

Carat Sponsorship is best known for delivering the Cadbury's 'Coronation Street' association. However, it has also negotiated UK programme sponsorships for more than 30 advertisers, as well as sports marketing deals and radio promotions for numerous blue chip clients.

Data Planning is a business unit with a vision to deliver better communications solutions through enhanced customer understanding. This is achieved by a team of 21 database analysts supported by bespoke software systems.

Carat's outdoor media specialist, Posterscope, has billings of £200m representing a market share of almost 30%. Scale brings demonstrable value to clients and has allowed Posterscope to develop an extremely advanced and powerful suite of outdoor planning and buying tools.

Recent Developments

The media communications marketplace has experienced explosive growth since the 1970s, when Carat was created. Then, there was only one commercial TV channel in the UK -- now there are more than 200, as well as 90 commercial radio stations, 8,000 magazines, 10,000 poster sites and more than 2m websites. To gain market leadership, Carat has had to continually innovate and expand to meet its clients' growing communications needs.

Carat Interactive was launched in 1996, and has already grown into one of the largest online operators in the UK. At launch, its focus was primarily planning and buying internet advertising. Today, Carat Interactive's remit includes interactive TV campaigns, SMS campaigns, and email marketing.

Carat Data Planning was launched in 1998 and has been the fastest growing business unit in Carat's history. Ongoing work for clients such as Royal Mail, NTL and Abbey National includes customer segmentation, DM planning and evaluation, response analysis and business forecasting.

In 2000/01 Carat enjoyed widespread industry recognition for its innovative work on behalf of clients. Its 'Sex and the City' sponsorship for Baileys was commended by Campaign's Media Awards, as was its online work for NTL and its Valentine's Day promotion for Royal Mail. Innovative use of research for Arla Foods Lurpak brand, resulting in a customer segmentation built around attitudes to food, was recognised by the Media Week Planning Award judges. And a data-driven, multimedia campaign for Royal Mail was shortlisted for a DMA award.

Carat has continued to build on its track record for winning new business although most recently its focus has been on large multinational accounts. Its appointment by Renault in 2000 and Philips in 2001 represent recognition of Carat's ability and appetite to deliver media solutions on a global basis.

Carat's stimulation programme was launched in 2001 and has generated a great deal of interest from the industry. The programme is designed to encourage creativity and innovation by forcing media planners to break routine in a variety of different ways. Through the programme Carat's planners have been encouraged to broaden their vocabulary, to learn the art of perfume-smelling, to visit art galleries and attend operas, or to learn a new language -- all in the interests of nurturing creative thinking.

Promotion

Carat's marketing and promotion focus is to reach the marketing directors of UK businesses, and to demonstrate its unique approach to delivering communications plans. This is achieved through a number of channels including PR, direct mail, conference speaking, face-to-face meetings and its website www.carat.co.uk.

Its PR strategy has been expanded recently to include the business and media sections of national newspapers, in addition to the trade press and TV and radio appearances.

Communication to the marketing community through direct mail comprises a combination of industry comment (The Carat Viewpoint bulletin) and case studies of work done for clients which are sent to both existing and potential clients.

As would be expected of a market leader, Carat's senior people frequently speak at industry and marketing conferences and sit on judging panels for industry awards as well as a variety of professional committees. Carat's website (www.carat.co.uk) is a source of information for clients and job seekers. The theme and tone of communication remains constant -- case histories are used to demonstrate the company's work.

Brand values

Carat aspires to be regarded as the most progressive organisation in its sector. Its brand is built around delivering communications excellence to clients through consumer insight and innovation. Carat believes that it achieves excellence through the people it employs, the systems it develops and the market understanding that its size delivers.

Carat has six core values which are communicated throughout the organisation. Adding value to clients comes first -- this encompasses surpassing client expectations, negotiating the best possible deals and seeking excellent long-term relationships.

Generating ideas is a value that applies to both Carat and its clients. Carat encourages ideas, challenges and new opportunities both internally and on behalf of advertisers.

Strong team working is seen as critical to business success. This applies to teams within Carat in the UK, teams working well with other marketing services companies (especially creative agencies) and teams working with other Carat companies around the world.

Open communication, trust and honesty are encouraged both internally and in interaction with clients. Passion and pride in work is the value that drives Carat's will to win and succeed. Internally, Carat encourages people to try to be the best at what they do, and to enjoy their work. Carat values its people by identifying and nurturing the best talent, listening attentively and training its staff.

Things you didn't know

  • Carat places more than 50,000 press ads a year in the UK. This equates to 135 each and every day.

  • Carat talks face-to-face with 12,000 consumers a year about their media habits and preferences.

  • A typical adult watching television will on average see 11 Carat commercials every evening.

  • The word Carat originally stood for "Centre d'Achat pour Radio, Affichage et Television" which translates as "Buying point for radio, posters and TV".

  • Carat's 2001 Consumer Connection Study showed some interesting male/female attitude shifts. According to its 10,000-strong consumer panel, more women than men in the UK now believe that "a woman's role is to provide a happy home" -- 43% of women, compared with 31% of men. Furthermore, women were 12% more likely than men to claim that they "don't like to show their true feelings".

    © 2002 Superbrands Ltd

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