By summer 2009, it appeared that OMD’s winning streak was about to come to an end.
The problem started back in mid-2008 when, after successfully consolidating big global accounts — including Intel, Visa and Renault-Nissan — its client Vodafone began a market-by-market media review. Holding about half of the telecom’s $1.3 billion advertising budget, OMD knew it had its work cut out for it. By March 2009, things weren’t going so well; OMD lost the lucrative U.K. piece, with an estimated $100 million in ad spending. Decisions in other big markets were looming.
But then the game plan changed — and things became even riskier. The client, switching gears, decided to conduct a single review among its incumbents-including OMD, Carat and WPP — to consolidate its entire media business. And it appeared that OMD was poised to lose a lot more than just the U.K. account as word circulated in Europe that Vodafone was ready to award the full global assignment to WPP.
Mainardo de Nardis, who joined OMD as worldwide CEO last March, acknowledged that Vodafone was one of the shop’s toughest pitches in 2009. In the fast-changing, sophisticated high-tech world of mobile telecommunications, preparing for the pitch was like “going to the university in terms of the learning involved,” he said.
Eventually, all of OMD’s preparation paid off. After more than 14 months of assessing work at both the local market and global levels, Vodafone, in late August, selected OMD to be its first global media agency network. “We took our time deciding and in the end we were convinced they were the right people,” said David Wheldon, Vodafone’s global brand director, noting the agency’s “excellent creative ideas.”
The win capped a second straight year of multi-billion-dollar billings growth for the agency — no small feat for a big shop that has clients in almost every category.
The Omnicom agency, also in August, captured the worldwide $200 million Monster.com account, without a formal review. Earlier, in February, the shop picked up the Asia, Latin America and Europe, Middle East and Africa portions of the $1 billion HP global consolidation after a review managed at the holding company level at Omnicom Media Group.
In total, OMD won more than $2.5 billion in net new business last year, boosting global billings to $32 billion, up 9 percent from 2008, according to Adweek figures. Global revenue was up 4 percent to approximately $895 million.
Key wins at the U.S. operation were the Worlds of Discovery account ($80 million) and two pieces of digital business from existing clients PepsiCo ($85 million) and CBS ($10 million).
Clients said that OMD brings a formidable package of skills to the table, not the least of which is innovative thinking and creative applications combined with what Wheldon described as “best-in-class” tools and systems.
On the innovations side, OMD scored a number of “firsts,” notably a deal to put the first ad campaign on Kindle, and a unique campaign to insert video in a magazine.
The work on Kindle was for client Showtime and came out of the Ignition Factory, a new unit-led by OMD U.S. director Jon Haber-to craft new techniques for traditional and emerging media platforms. It promoted the series Nurse Jackie and offered readers a free downloadable script on the Amazon e-reader.
In September, the Ignition Factory developed a campaign for two clients, PepsiCo and CBS, which enabled the network to showcase its fall lineup in a miniature video player inserted in the fall preview issue of Entertainment Weekly. Also in that issue was a video promotion for the soft drink and snack food company’s Pepsi Max brand.
Last year, OMD launched OMD Pop, a unit of the company that informs clients about the latest trends in popular culture and assesses how to incorporate those trends into their marketing plans.
OMD is now looking to export OMD Pop and Ignition Factory to other parts of the world. OMD Pop is gearing up to service clients in Asia, and Ignition is opening up a U.K. office.
Ted Gilvar, Monster CMO, said, “Our European managers are very excited about” Ignition.
For extending its streak of consolidating big global accounts with an offering of highly regarded planning and analytics tools reinforced with innovative media solutions, and for achieving revenue growth during a year when most peers barely held steady, OMD has been named Adweek’s 2009 Global Media Agency of the Year. It’s the second straight year the agency has earned that title.
One milestone during 2009, said Alan Cohen, OMD U.S. CEO — and the executive who launched Ignition and Pop — was the Pepsi-CBS campaign, which showed how creative thinking can add vitality to a tired medium (print) in need of sprucing up. And there are potentially numerous applications for it beyond consumer magazines, he said. One example: inserting video players promoting a pharma client into brochures in doctors’ waiting rooms.
Cohen added that the Pepsi-CBS mini-video player project was the first time OMD paired two clients in the same campaign. “That’s something we don’t do enough of and that presents bigger opportunities to explore business partnerships,” said the former network marketing executive.
Wheldon of Vodafone saluted the agency for conceiving “Who Killed Summer?” a
video series that fused real-time footage from a number of Vodafone-sponsored music events with pre-shot content to produce what the company calls a “social media-based whodunit.” The series was available online in July and on mobile via a downloadable application to Vodafone phones, as well as via a widget on Vodafone’s Music Studio MySpace page.
Wheldon also applauded OMD for developing a “critical” desktop software package that merges data from the agency and client and helps assess the effectiveness of ad buys in real-time across markets. The results allow the client to adjust accordingly.
“The future that awaits all of us is much more of this information at your fingertips that you can use to plan and deploy resources appropriately,” said Wheldon.
According to Daryl Simm, CEO of Omnicom Media Group Worldwide, OMD has made a priority of expanding the shop’s suite of ROI and analytical tools, first deployed in the U.S. in mid-2007, across the worldwide network.
“We built the staffing here [in the U.S] initially, but it was always an idea about how to do something meaningful around global service so that clients could see and feel the value of consolidation and service from a single media agency provider,” said Simm.
Monster’s Gilvar said that OMD’s ROI analytics tools are “very important for us. As online advertisers, one thing we need to understand is whether or not whatever we’re doing is working, and we need to see it in real time. What they do very well is create dashboards and provide information in real time to help us link our media activity to our traffic or whatever other metrics are important to us. It’s baked into their process in a seamless way.”
Gilvar said he purposely avoided a formal review because the company had conducted one within a little more than a year of his arrival at the company as CMO in July 2008. “The two finalists were MEC and OMD,” he said, “so my attitude was [OMD] had proved their mettle to some extent by being a finalist in that review, and why spend a lot of time, money and energy going through another review process versus just getting to work?”
Gilvar added that he had a “friend of a friend relationship” with Cohen. “When I talked to him about his vision for the U.S. operation, just about everything he espoused was what I was looking for. In its simplest form it’s more innovation at the heart of the planning process, and a more seamless integrated model within the agency where there is leadership that understands how to work with all the specialization and then put it together in a smart, strategic way.”
Meanwhile, de Nardis, a native of Italy who is now based at OMD headquarters in New York, is looking at ways to make a tightly knit organization even more so in 2010.
“We’re not bad, but we’re not perfect,” he said, describing the results of an employee satisfaction survey conducted last year. He said he’s been pleasantly surprised by the level of teamwork he’s encountered at OMD. “It’s not just a cliché,” he said. “And we’re more successful because of it.”
While the agency achieved surprising growth in a difficult year, de Nardis said he believed the single most important accomplishment was retaining key talent. “That’s really what our clients pay us for,” he said. “Without talent, we don’t have much to offer.”
The shop has added some key talent as well. Cases in point: former Mediacom exec Barbara Cipolla, who became global CMO, and Ernie Simon, who joined OMD’s U.S. operation in March as chief strategy officer from Mindshare, where he oversaw strategic planning.
Whether the agency can duplicate the success it achieved in 2008 and 2009 this year remains to be seen, but de Nardis, the former global CEO of Aegis Media, said that clients appear generally less pessimistic about their prospects for 2010 than they were a year ago. “Last year everyone was very tactically focused,” he said. “Now they’re starting to think strategically again.”
As is OMD. Most of last year was focused on near-term client needs, which prompted the shop to implement what it called its “economic recovery act,” where the shop went back to media vendors to renegotiate terms of ad buys. The shop says it saved some clients as much as 23 percent compared to originally negotiated rates.
This year, said de Nardis, he will start planning what the agency should look like in five years. Two things are certain, he said: Everything will be different and digital will be at the core. And with the rapidly increasing pace of change, he added, “we have to start organizing today.”