The Quest to Be More Than a Conflict Shop

Scott Hagedorn, CEO of Omnicom’s PHD U.S. was busy huddling with the key members of his buying and activation teams last week to prepare for the upfront market, which officially kicks off this week.
 
For Hagedorn, key objectives include securing as many digital assets as possible as part of the broader development of activation programs created for specific client brands and TV programs. And while the networks love to talk up their new shows and schedules, Hagedorn also wants his team to do more “brand briefing” on behalf of clients at the upfront negotiating table. “It’s not about them [the networks] it’s about us,” he says. “One of the things I’m most excited about is driving 360 activations into the upfront.”  
 
For Hagedorn, helping his team craft this year’s upfront strategy is just the latest challenge in what has been a hectic six months since taking over the helm of PHD at the beginning of the year. He has re-organized PHD and put a much sharper focus on developing consumer insights and converting those insights into creative and effective client plans and executions. He’s created a major new practice, brought in key new talent and redefined roles for some executives.
 
One key people move was the elevation of John Swift, who had been in charge of all media investment to managing director of East Coast and Midwest operations in charge of the New York, Chicago and Minneapolis offices. He replaced Jennifer Neal (who also oversaw the Discovery account), and who left the agency around the time Hagedorn joined.
 
Promoting Swift, Hagedorn said, helped accomplish two goals. First, it filled the gap left by Neal’s departure. At the same time, Hagedorn eliminated what effectively was a chief investment officer position, that had been designed in part to insure media neutral budget allocations for clients within the agency.
 
That responsibility now falls to account executives currently being hired to oversee client groups who will  effectively, “be running mini agencies within the agency,” said Hagedorn. Among the first account heads hired recently were Elizabeth McCune, who joined the agency from OMD where she held a similar post, and Alex Tamayo, who ran accounts at MediaCom, the WPP agency.  
 
Now, the different media discipline heads report to Hagedorn, including Harry Keeshan, director of national broadcast, Lance Neuhauser, director of digital and Alison Howald, director of print.
 
Meanwhile, PHD has brought in $500 million in new business in the last quarter in addition to defending one of the shop’s most important accounts: Discovery Communications, which spent $80 million on ads last year according to Nielsen.
Among the new wins are phone company Vonage, which spent $130 million in ads last year, and which the media shop  won in tandem with sister creative agency TBWA/Chiat/Day in April. Two other wins came in collaboration with sister shop DDB earlier in the year including Glidden ($25 million) and Soyjoy ($35 million).  In addition the estimated $175 million U.S. HP business, won by the Omnicom Media Group as part of a global pitch in February also resides at PHD.


 
Hagedorn, 38, is the first to admit that reeling in new business is critical. All the more critical when Chrysler is your biggest client and hemorrhaging red ink and slashing its budget and trying to figure out a way out of Chapter 11.
 
It’s a problem that PHD  has been pondering — and taking steps to address — since last year, when the shop’s billings dropped 6 percent to $5.9 billion, largely due to Chrysler’s $400 million drop in spending. This year, the shop’s new business has off-set the client’s spending reductions, Hagedorn said.
 
Meanwhile, PHD Detroit is effectively an island within the broader agency network that exists solely to service Chrysler.  The worst-case scenario, Omnicom execs say, is that Chrysler goes under, PHD Detroit closes and the shop moves on.
 
But Hagedorn says that he is “cautiously optimistic that Chrysler will emerge from this and we’ll continue to service them.” That said, given the uncertainties throughout the auto sector, “my mandate has been to sort of grow around that,” he said.
 
In addition to new business growth this year — and just as important — PHD saved a key account with its successful defense of Discovery in March. The save reaffirmed the new insights-fueled approach to client businesses that Hagedorn implemented, according to Marina Anglim, svp, media planning and partnerships,  at Discovery who oversaw the review.
 
The review came in the wake of key management changes at Discovery, including new heads at several networks, a new CMO and Anglim. After a decade at the shop, “we wanted to see what else was out there especially at a such a competitive time when people are so hungry for business.”
 
As part of the pitch, PHD  researched the audiences of Discovery’s 14 networks, producing insights that were “blown out to amazing creative expressions of those ideas in media,”  said Anglim. “That’s a difficult challenge with so many different brands and touch points.”  
 
Two months ago, Hagedorn recruited Sandy Eubanks from sister shop OMD to work with PHD’s strategy teams as director of media analytics, a new position at the agency.  A short time later he developed  a new activation unit to create new insights-based media programs and applications. That’s headed by Aimee Duell, director of activation, who was previously at Omnicom unit Green Room Entertainment and before that Sony PlayStation.
 
Looking ahead, says Hagedorn, who previously he ran sister shop OMD’s East Coast operation and before that was head of OMD Digital, “We want to change our perception in the marketplace. I don’t think we have  been known for anything other than potentially being a conflict shop. We’re a good fit for challenger brands that want some excitement and speed around their brands and who want to rely on a partner who is  thinking about the evolution of media.”