For Omnicom Group’s OMD, 2008 proved to be a year of redemption after a difficult 2007, when the agency failed to capitalize on key opportunities and learned some painful lessons.
In June 2007, client Dell called a global creative and media review and invited holding companies to pitch one-stop marketing solutions. For OMD, it was a chance to convert its roughly $350 million U.S. Dell account into a global piece of business with annual spending of twice that amount.
By September, however, OMD and parent Omnicom were out of the running. Two months later, OMD got more bad news when Bank of America put its $250 million account in review. “That was probably the low point,” says Daryl Simm, worldwide CEO of Omnicom Media Group, the media services division of Omnicom that oversees the holding company’s media assets. A short time later, BofA, like Dell, became a former client.
Clearly, there were gaps in the OMD offering. The good news was that Simm felt he knew what those deficiencies were, as he had also been acting global CEO of OMD since Joe Uva’s exit in early 2007. (Mainardo de Nardis, former Aegis Media CEO, was named the next worldwide CEO of OMD in November 2008 and is expected to start shortly, reporting to Simm.) Perhaps the biggest problem Simm saw was the lack of an efficient system for managing client data in a way that both client and agency executives could manipulate easily, and then quickly react to and adjust media and marketing plans accordingly. The solution: what the agency says was a huge investment in technology that enabled OMD to develop its new Business Intelligence dashboard system.
The system was first implemented in the U.S. early in 2008 and was rapidly deployed around the world. Major global clients like Visa, McDonald’s and new-to-the-fold Intel use it, as do roughly three dozen U.S. clients, says Page Thompson, OMD’s avuncular former North American CEO, who was promoted to the same job at OMG two months ago. In part due to that new capability, says Thompson, the shop has been able to reduce about 12 percent of its mid-tier “bulge” of employees who essentially did clerical chores, contributing little to the main agency mission of helping clients market their businesses. This took the total staff at the time down to 1,050. There are fewer people at the shop now, “but more dedicated senior people working on client business,” says Thompson. “Clients want more for less, and that’s what we’re giving them.”
Simm, known by colleagues to be highly organized and buttoned-down, worked tirelessly with his media managers and the Omnicom finance team to get the Business Intelligence system running. He credits it for helping to reel in big new accounts last year such as Intel globally ($300 million), Visa in multiple regions ($500 million) and Renault-Nissan in Europe, the Middle East and Africa ($1 billion), as well as many smaller accounts.
All told, OMD won $3.1 billion in net new business globally in 2008, boosting billings to $29.4 billion, up 12 percent over 2007, according to Adweek research. Global revenue was also up 12 percent, to $860 million.
Every region made a contribution, not least of which were China, seen as a must-grow opportunity for American marketers, and the U.S., where the agency executed a smooth management transition with the addition of Alan Cohen as U.S. CEO and the elevation of his predecessor, Thompson.
OMD says it was the fastest-growing agency in China last year, with new-business wins totaling $365 million, up 54 percent from 2007. China gains included carmaker Peugeot Citroen, Zhujiang Brewery, Danone and pieces of the global Visa and Intel wins.
For implementing critical new capabilities, and for its dozens of client wins throughout the world and its retention and expansion of existing accounts, OMD is Adweek’s 2008 Global Media Agency of the Year.
Another area where Simm felt the agency had to improve: global account management. Increasingly, he says, big multiregion marketers want holistic marketing plans they can integrate globally. In October 2007, Simm named nine-year OMD veteran Kate Stephenson president of global account management, a new position. Simm credits her for helping to win Intel, Visa and Renault-Nissan.
“One of the things we focused on was really managing our global accounts as single accounts where we could really bring discipline and single-source servicing to our largest clients,” Simm says.
Stephenson says she has focused on “leveraging our global assets so that client teams around the world are sharing information among each other. It’s been about bringing different disciplines as well-investment, strategy, digital-all functioning in a matrix way to share learning throughout an organization.
Clients are very interested in that kind of approach.” Just last week, to help facilitate that, the shop added its worldwide research practice to Stephenson’s list of responsibilities.
It was just about six months ago that Intel moved its $300 million account to OMD from Interpublic Group’s Universal McCann following a review. Nancy Bhagat, Intel’s vp of sales and marketing and director of integrated marketing, says the new Business Intelligence system has transformed the company’s ability to assess management performance market by market throughout the world.
“It’s easy for marketing managers in one country to talk about their success and how great they are as managers,” Bhagat says. “It’s much harder when you put some discipline into the system and when everyone is looking at results from countries all around the world in an equal way. … The manager in Japan can see what China is doing, and the person in Brazil can see the same thing.”
She also credits OMD with executing a key new contract with DoubleClick, the Google-owned ad-serving company and Internet activity tracker, to measure the impact of Intel’s online media worldwide. “It gives us consistency across all markets,” says Bhagat. “It’s revolutionary” in that it tracks online activity globally, she says.
Clients also say they’re impressed with the way OMD takes the lead among their often disparate groups of marketing agencies to coordinate media-neutral planning on projects. “They don’t say, ‘Here’s a creative idea, now let’s find some media to place it in,’ ” says Mary Dillon, CMO at global client McDonald’s.
“Instead, the OMD people think about media as integral to the [creative] ideas from the very start. Because obviously the creativity of the media choice can be the thing that breaks it through as well as the actual creative execution itself.”
Dillon says she was particularly impressed with the collaboration between OMD and digital shop AKQA on a project they spearheaded that was tied to the Beijing Olympics-the client’s first-ever global alternative reality game called The Lost Ring. Some 5 million players in 100 different countries participated in the game, according to Kim Lloyd, senior director of global marketing at McDonald’s.
“We thought it was a home run” says Dillon. “We brought consumers a rich experience around coming together to solve mysteries of each Olympics. There was a lot of buzz, although we didn’t super brand it. It struck the right balance.”
OMD U.S. contributed greatly to the global performance in 2008, winning a bushel of new business and undertaking a major reorganization the agency says allowed it to operate more efficiently with fewer people.
Alan Cohen was hired as U.S. CEO from Initiative, where he had headed the latter’s West Coast operation. Also, Monica Karo was promoted from managing director of OMD West to president of integrated accounts at OMD USA, heading up Apple and Nissan.
Cohen joined mid-year and hit the ground running. With his U.S. team, he won five out of five reviews, including the $130 million Time Warner Cable assignment, the $75 million Levi’s account and the $60 million Henkel/Dial business. Cohen also reeled in the $135 million CBS/Showtime account without a formal review.
With a background in network TV, Cohen is described as a born showman, an emerging-media geek and perhaps the most creative executive on the OMD management roster. One of his first accomplishments at OMD was to install a new unit called the Ignition Factory, which is tasked with developing new techniques for both existing and emerging media.
One example: a new Nissan-focused Xbox 360 game tied to the launch of Nissan’s new Sentra SE-R. The results: 44 million game sessions with an average of 66 minutes of Nissan-branded engagement that generated a fourfold increase in traffic to the Nissan Web site. The campaign won a Silver Mixx Award in the in-game ad category.
Not surprisingly, the recession has triggered some ideas, too, including what Cohen dubbed OMD’s “Economic Recovery Act,” which involved connecting with every client in late 2008 after the stark reality of the economic collapse had set in-to sit down and reevaluate each client’s plans step by step.
“We’re always talking with our clients,” says Cohen. “It’s just part of our ongoing effort to be more like strategic consultants, constantly focused on what they’re doing and not just waiting for the phone to ring.”
OMD ’08 AT A GLANCE:
–Billings up 12 percent to $29.4 billion
–Revenue up 12 percent to $860 million
–Accounts Won/Media budget: Renault-Nissan ($1 billion); Visa ($500 million); Intel ($300 million); Lilly ($250 million); CBS/Showtime ($135 million); Time Warner Cable ($130 million)
–Accounts Lost/Media Budget: Bank of America ($250 million); Schering-Plough ($75 million)
–In April named Alan Cohen CEO, OMD U.S.
–In November named Mainardo de Nardis worldwide CEO (effective April 2009).
–In December promoted N.A. CEO Page Thompson to N.A. CEO Omnicom Media Group. Monica Karo promoted to president of integrated accounts.
(Sources: Adweek, agency reports, Nielsen Monitor-Plus)