John Seifert, the worldwide CEO of Ogilvy & Mather, has spent the past year and a half implementing what he calls the “Next Chapter” of the agency. That next chapter, which he presented last year to WPP CEO Sir Martin Sorrell, includes both streaming the agency’s structure and the technology it uses.
“We live in an age when there is more fragmentation than ever,” he said in an interview with Adweek. “More ways to build brands than ever, and there are some people who are questioning whether there’s a real value in brand anymore. Aren’t we all going to be led by algorithms and big data?”
Over the past decade, Seifert said Ogilvy essentially transformed into a “holding company within a holding company” in pursuit of growth. That ended up leading to fragmentation (the agency is getting rid of brands like Ogilvy One and Ogilvy PR). Presenting to Sorrell was Seifert’s way of refocusing the agency for building brands in “modern ways.” Think less of a holding company and more of a streamlined global operation. Seifert admitted that while this has been the “messy year” with lots of experiments and change, Ogilvy is setup for a brand relaunch in 2018.
Seifert talked with Adweek at this year’s Web Summit in Lisbon, Portugal, about how Ogilvy is transforming both structurally and digitally, and where he’s looking for the year ahead. (This interview has been condensed for length and clarity.)
Has anything happened in the last year that’s made you rethink the strategy?
Nothing has fundamentally made us rethink the strategy. If anything, a lot of the changes going on in the industry have [forced us] to mov[e] faster, because we’re just starting to see that we’re not the only people who are trying to change in response to what’s going on in the world. We have an amazing brand. It has great equity with our people and our clients, but when everything is in this state of dynamic change, we cannot afford to slow down. Jack Welch once told me almost every decision he ever made to transform GE always took longer than it should have.
Where does technology fit into this change?
One of the reasons technology is so important is that technology is an enabler of all this. So if you’re not leveraging the data that exists and is insightful in terms of serving customers better—if you’re not connecting that data to the creative content or the user experience or whatever it is that the consumer responds to, and you don’t have the back-end capability to measure the value that it creates and you’re not part of that system—you’re not relevant. And that’s what we’re trying to figure out. How do we figure out where we’re an essential part of this much more integrated system that everybody is depending on.
Looking into 2018, where do you think still needs improvement?
I think there are two or three big things that still need to be landed: transparency is one. There’s a trust gap, and so how the tech players, the platforms, the data providers assure clients that there is sufficient transparency—whether it’s in brand safety or whatever the particular issue is around that—is an ongoing question.
The other thing is that the tech capability has developed faster than people know how to work with it. If you just look within Ogilvy, we have more than 100 different tech applications. We should have four. … If we have 100, imagine the multiplication beyond us. I think there also has to be a rationalization that goes on because it’s unaffordable to maintain this level of complexity and fragmentation. And it’s just not effective. It’s not working.
So how are you going about streamlining these systems?
We’re just shutting things down; we’re trying to use fewer. For example, we have four different finance systems. You can’t be an integrated company with four different finance systems, right? Martin Sorrell has a huge initiative of simplifying the back room, consolidating capabilities for use with more operating companies. So some of it’s our own making, which we have to do. And then some of it is we just have to make more choices and bets of who we’re going to partner more strategically with. Whether it’s with the ad-tech players or the platform players, we need better partnerships and a more streamlining of our talent and tools.
There is a lot of emerging tech that people are starting to try. How are you integrating that right now and what does it look like in terms of investment and R&D?
Right now it’s experiments. We probably have, globally, around two dozen individual experiments of emerging technology that we’re creating with those players. I don’t think anybody knows yet how they’ll scale, so we’re kind of in that early phase of adopt, learn the technology, and make it as pervasive as we can within our organization.
We have some really cool experiments going (such as Ogilvy Delivery), but I don’t think we know yet what’s going to take or accelerate. It’s try and learn.
Do you have any incubators set up like some other agencies do?
The incubator is more about: Do you want to get into the ventures business? We as Ogilvy are not doing [that]. WPP does that, so we just try and plug in to where we think a new venture or an incubation that is going to lead to some level of investment is happening. That is not our business model, but that is certainly the business model of WPP. And we’ll invite players from those efforts in and collaborate with them on projects and so on. We try to be an integrating element.
Are you spending or investing more next year?
We don’t think of it in the way a venture capitalist would. It’s not like we’re making some big bet and we have to see the payout over time. It’s not that costly to experiment with some of these things. Some of it involves training, some of it involves literally curating with the tech providers themselves. So there is some expense there, but most of these things are things clients want to do, so they’re built into the cost of the projects that clients are willing to spend money on.
Thinking about the global landscape, what are you taking from elsewhere around the world and bringing back to the U.S.?
One of the reasons we’re trying to simplify the network into a more integrated network is because these things are happening in different ways all around then world. So if you go to China, what you see in terms of the power of WeChat, the power of ecommerce to be embedded right into the entire creative communications value chain is way ahead of what we see in other parts of the world. We are trying to make sure that the nodes of our network are incredibly responsive to these differences by market and are feeding everyone else.
We don’t know which ones will necessarily cross boarders, but we want bets on all of them. One of the best things we’ve done all month is individual market reviews for a full day of each of our top 20 markets. What’s been amazing about that is rather than rushing through and saying ‘we like your numbers’ and ‘less of that, more of this,’ we’ve spend hours really understanding what is changing in a local market landscape and what we need to learn from that to share more broadly as a worldwide network. I think it’s going to be much more bottom-up and less top-down in terms of how we think about these things.
What have you learned from these reviews?
It’s the paradox. Everyone feels under enormous pressure because local markets don’t feel maybe as robust as they did five year ago. And yet there is this feeling of a general trend that growth is starting to return, but there is still just a huge amount of pressure on cost. And so having everyone in a growth mindset is still the single biggest issue we face.