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.
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