The $3 Billion Account Win That Shook the Media World

The rise of PHD is not so much an overnight success story as a slow and steady ascent to the incredible heights it has reached—capped off by a year that made the shop the envy of the media-buying universe. “For a long time PHD was growing, but not at the pace we needed. If anything, it was a conflict shop for Omnicom Media Group,” explains Nathan Brown, CEO of PHD U.S. PHD, Adweek’s Global Media Agency of the Year for 2016, scored a number of impressive, high-profile wins over the past year—most notably, the $3 billion global Volkswagen account as well as Delta Air Lines and Carnival Cruise Line in the U.S. and a number of international clients. “This is the year that, to everyone else, PHD became everything we knew it would be,” says Omnicom Media Group chairman and CEO Daryl Simm. Last year, PHD racked up $4 billion of media spend in wins; Recma says it generated $750 million in revenue, a 15 percent gain over 2015. It was also the year the agency opened nine offices worldwide and began the scrupulous process of recruiting 500 new team members to meet the demands of the massive VW business, one of the largest media account wins in history. How VW was won Mike Cooper, PHD’s worldwide CEO, wasn’t doing anything extraordinary on the afternoon he learned his agency had won VW’s media account after 16 months of pitches and meetings. The story feels almost anticlimactic following the grueling journey the agency went through to eventually scoop up the business. Cooper stepped out on a Friday afternoon to grab a sandwich when his phone rang, and VW informed him PHD would be its sole media agency, in charge of business for all eight nameplates, including Audi, Bentley and Porsche. “After they told us we won, I couldn’t think of anything else, to be honest with you. They were probably telling me all sorts of important things that I kind of put off to one side,” Cooper jokes. “I was walking back to the office and I saw that [Cooper] was putting the phone down. He came over and just hugged me. I figured it was something significant,” adds Mark Holden, PHD’s worldwide strategy and planning director. VW was one of the most highly sought after accounts amid what’s become known as “Mediapalooza,” when more than $18 billion in media spend went up for review across the span of several months in 2015. When VW decided to place its entire media business in review that February, every major media agency was briefed. Over the following 16 months, PHD would work tirelessly—including arranging more than 90 meetings across 33 markets and introducing the prospective client to some 170 execs at the Omnicom shop—to prove itself worthy of the account. [kickout id="2"] “Every single time [VW] had a meeting with PHD people, they said that meeting was professionally run, on time, answered the brief and was done with collaborative spirit and personality,” recalls Hilary Jeffrey, evp of PHD Worldwide. The true test came in the final months of the pitch, as PHD duked it out against fellow finalists Mediabrands (a unit of IPG) and WPP incumbent MediaCom. In each of three regions, including the U.S. and VW’s home turf of Germany, PHD executed seven different brand presentations for the client at a single meeting. “I think that really is a test of your strategic firepower as a network,” Cooper says. “It’s a test of your talent, it’s a test of your abilities—to be able to do seven simultaneous presentations individually for each brand with a different strategic recommendation is something that really sorts you out as a network. That’s not an easy thing to do.” “I first saw a peek into what PHD was about when I first came on board,” says Oliver Maletz, head of media and connections planning at VW Group. “We were able to see what capabilities they had. They were intriguing back then, and they proved themselves in the year-and-a-half-long pitch process. It was probably one of the most vigorous pitches in any industry, and I’ve been doing this for 28 years.” This wasn’t the agency’s first interaction with VW, however. In 2010, PHD began adding some VW business to its roster, including Porsche’s global media account and some work from Bentley and Skoda. (It needs to be noted that the VW brand continues to recover from the emissions-rigging scandal that rocked the company in 2015. VW agreed to pay $15 billion to U.S. authorities and owners of a half-million vehicles. Last November, the company announced a major restructuring that would result in the elimination of 30,000 jobs.) More growth Perhaps one of the greatest signs of the agency’s extensive capabilities and skills come not just from winning VW but also in PHD’s ability to, in the midst of the 90-plus-meeting chaos, keep existing clients happy, to grow organically among those clients and to bring in still more new accounts, all without suffering any major losses regionally or globally (Recma points to Australian insurer Greenstone as the lone loss). On a large scale, winning VW in its entirety already demonstrates the agency’s ability to build business with existing relationships, but smaller-scale examples from the past year include the addition of six Nordic markets for Bayer, along with the retention of Finland after a competitive pitch. PHD also managed to expand responsibilities for existing clients like chocolate maker Ferrero, adding 30 markets across 18 months, most recently South Africa and Mexico. [kickout id="3"] Another such example is the global packaged-goods giant Unilever. The agency began working with the company in 2006 and has expanded its relationship with the client every year since. That steady build resulted in the ultimate imprimatur in 2016. “At the end of last year, they awarded us the final piece of their communications planning work,” says Jeffrey. Rob Master, Unilever’s vp of global media, adds: “The work that PHD has done with our ice cream portfolio is really an excellent example of how they’ve brought tremendous thinking, both strategic and creative, and it surfaces itself in really innovative ideas that have really made a huge difference to our business and we have seen that across the globe.” (Unilever is the world’s largest ice cream maker, encompassing the brands Magnum and Klondike.) As noted, PHD secured $4 billion in pitch wins the last calendar year, an impressive 28 percent increase versus the previous year, with the U.S. as the cornerstone of that success. In March, the U.S. operation picked up the $20 million MailChimp business, along with the $31 million Old Navy account. Later in the year, PHD added $103 million with Delta Air Lines and $115 million with Carnival Cruise Line. [kickout id="1"] A decorated year 2016 also marked a banner year for PHD in terms of awards, which Cooper explains are “important to us because it’s evidence that the strategies we are creating are producing outstanding ideas and great work.” Last year, PHD took home more than 350 awards for clients around the world, which, as Cooper notes, is “far more than some much bigger networks.” PHD had some of its best work singled out at the Cannes International Festival of Creativity, taking home four Lions, among other awards that it won for its work done in partnership with other shops. Some of the agency’s most noteworthy work includes a project done in partnership with Colenso BBDO for DB Export Breweries. Together, the two came up with the idea for the “Brewtroleum” campaign, designed to help pick up sluggish beer sales—and save the world. Using a biofuel made from yeast and grain that is leftover in the brewing process, DB Export Breweries created petroleum by asking people to drink more beer. For the campaign, which won the Outdoor Grand Prix Lion, PHD struck a deal with some petroleum retailers to get the product placed in a number of gas stations for six weeks and used radio, TV and digital video alongside discount vouchers placed inside packs of beer to get people to use the product. Another standout campaign for the agency (one that earned PHD an Adweek Media Plan of the Year Award last year) came out of PHD India for client Active Wheel. The “Lo Kar Lo Baat” campaign worked off the insight that more men were moving away from their families to find jobs but continued to rely on costly phone calls to keep in touch. PHD partnered with the laundry detergent brand and placed a phone number on its packaging that would give families three minutes of free chat time. A secret weapon How exactly did PHD manage to come up with so many impactful campaigns and win so much business in the course of a single year? Most of the team will credit Source, the agency’s internal planning and collaborating tool, described by some as a type of gaming system for employees. “It’s a digital operating system and it allows planners to do pretty much everything they need to do from researching to plan optimizing,” says Holden, the brains behind the platform. Source allows employees all over the world, from New York to New Zealand, to connect with one another and share ideas or feedback on any client work or campaign. An employee can simply upload an idea at any stage, leave work in the evening and return the next morning to find feedback from colleagues in different time zones with different viewpoints and world perspectives. “What it’s really created is a world of abundance in terms of creativity, even if you are just one person working at your desk,” explains Will Wiseman, president of strategy and planning at PHD U.S. “It’s truly, truly unique and feels very much like a tool that is born out of the language of social media and gaming applied in a language of media.” The system has also served as a great way to recognize and nurture great talent. It allows the agency to highlight those staffers doing stellar work in any corner of the world and bring them in on a pitch, even if it’s not an account they would typically work on. Hit the ground running With so much success to celebrate in 2016, the concern now is that PHD could fall flat or be overwhelmed by the sheer amount of assignments coming in and out of the agency. While most definitely a morale booster, the past year was a nonstop, exhaustive—as well as exhausting—effort. It will definitely be an all-out sprint to maintain that success. But the agency hardly rested on its laurels with the beginning of the new year. In the process of hiring those 500 new team members across the network to focus on VW, PHD relied on its own people to help find the next great talent from media backgrounds as well as creative agencies and brands. The result is a diversity of skill sets that will drive the agency to even greater heights. “We’re just as excited about what is ahead now—at a U.S. level, at a network level, and thinking of what the infrastructure of a VW win means for many small markets around the globe and to big markets like here: the infrastructure, people and talent, all those sorts of things that I think is going to propel us into the future,” as Brown puts it.