The main problem with winning the two biggest media accounts in the U.S. is that once you do, you actually have to run them.
In December 2015, Omnicom’s Hearts & Science—at the time still unnamed—landed the lion’s share of Procter & Gamble’s multibrand planning and buying business. Then, after a breakneck race to hire 300 warm bodies in the first half of the year to staff the account, the fledgling agency hit another home run in August, picking up AT&T’s business.
Combined, the two accounts represent some $5 billion in annual billings. That has meant a rapid expansion for the agency in just about every conceivable way.
“We started with one office here,” CEO Scott Hagedorn says from his perch at the company’s headquarters on the 36th floor of 7 World Trade Center in Lower Manhattan, and, he adds, two more in Canada and Puerto Rico. “Within a year, now we have two offices in New York,” he goes on. “We added Mexico, the U.K., Germany, Dubai and Japan.”
But growing that global footprint was, in large part, not really about fulfilling the marquee assignments Hearts & Science had already banked. A separate pitch late last year saw Hearts & Science add a chunk of P&G’s business in Japan, in a joint venture with Hakuhodo. “We’ve been winning in those markets and have active clients in all those markets,” explains Hagedorn.
With some 800 employees now on board, it’s hard to imagine a more natural contender for Adweek’s inaugural Breakthrough Media Agency of the Year Award.
Hearts & Science brought in an estimated $119 million in revenue last year. But even more than in its running start as the third network in Omnicom’s Media Group, the shop’s success is apparent in the shock waves its data-driven model is sending through the industry, setting a shining example for sibling agencies like our Global Agency of the Year PHD and putting rivals at WPP and Publicis on their heels.
“Hearts & Science and BBDO have helped us develop a groundbreaking advertising model driven by data,” says Fiona Carter, chief brand officer at AT&T. “With Hearts & Science on our team, we’re moving from mass marketing to mass precision so we can connect with customers whenever and wherever they need us the most. We’re just getting started on our journey together, but we’re already seeing tremendous results.”
Back to the beginning
The Hearts & Science story, while having captivated the media-buying world in 2016, actually dates back to 2010, when Hagedorn began building Annalect, the Omnicom data and marketing science group whose insights are available to all the holding company’s agencies and which is at the core of the new shop’s market positioning. But it was last year that the labors of the data unit bore unprecedented fruit across the umbrella media division.
“Some other successes that we’ve had in the group in 2016 such as some of the PHD wins—Volkswagen, Delta, Carnival—what we learned from Annalect that was proven out in Hearts & Science really was put to work elsewhere in the organization, and taken on board for those really significant opportunities on PHD,” says Omnicom Media Group global chairman and CEO Daryl Simm. “What we have learned as a group is how to bring those data and analytics capabilities to life in a really seamless, collaborative way inside our agencies for our clients.”
In fact, that opportunity for collaboration extends beyond planning and buying to Omnicom’s creative agencies. BBDO won the consolidated creative chores on AT&T in its joint pitch with Hearts & Science, and has a director of data solutions who uses Annalect to glean data about consumer behavior that might be useful in creating more effective marketing messaging. The potential of Annalect to bolster a pitch—as demonstrated by Hearts & Science— was also apparent in DDB’s winning bid for McDonald’s consolidated business in 2016, notes Simm.
At the core of the Hearts and Science model is an approach that combines qualitative insights—the agency’s namesake “hearts”—with a new emphasis on quantitative ones—the “science.” Hagedorn and his team stress that their success is born from eschewing the kind of proprietary, formulaic, black-box process repeated across brands and favored by other agencies. Rather, they have worked to create a new kind of client team—with number crunchers at its center, alongside strategists—and empower it to use an unprecedented trove of consumer data.
That approach to solving business problems—an agile, forward-looking one that is, as Hagedorn puts it, “improvisational” rather than an after-the-fact reporting function—sets Hearts & Science apart in an often mind-bendingly complex media landscape.
Perhaps unsurprisingly, some of the agency’s method comes down to using behavioral segmentation to accumulate reach in a more efficient way than traditional TV would allow. Take P&G, for example. “If you’re selling toothpaste, if you’re selling laundry detergent … there is a belief that I need everybody, so let me have this broad-based demo,” explains Kathleen Brookbanks, COO of Hearts & Science. “A lot of the conversations and the work we’ve been doing is about saying, ‘In it’s entirety, you need all those people, but how you communicate to different people as a function of their behaviors needs to be different.’ ”
That is indicative of Hagedorn’s vision for a broader approach to doing business. “Oddly, I’m a former brand planner on BellSouth and AT&T—that’s how I got my start,” he points out. “It’s a qualitative art and interesting to find insights and try to figure out how to position it, but I never had a quantitative analog as a partner. And I see these marketing resources as the rise of a quant planner that can work with the strategist to make sure, like, OK, it’s great that you’re coming out with an idea that you want to use white strips to go after expectant brides that want to whiten their teeth. How big is that audience exactly? Is it worth going after that? Is the white-toothed bride going to grow your share or is that just too narrow? Because the head of this line of business—think, his target is anyone with teeth.”
For P&G’s Always line of feminine-care products, the agency around last year’s Summer Olympics used digital displays in New York located near Walgreens and Duane Reade locations and indexing high among women 18 and older to drive traffic to stores and keep the brand top of mind during shopping trips.
All about the talent
Finding the right kind of talent—those professionals with a genuine desire to learn how to effectively and flexibly help clients navigate a rapidly changing marketplace, one that’s riddled with emerging platforms and varied ad tech—has been a challenge for Hearts & Science, nowhere more than in the case of AT&T.
In contrast to Hearts & Science’s 18-month process of landing P&G—largely conducted in the packaged-goods giant’s characteristically meticulous fashion—the telecom client had tossed up its business, selected a winner and transitioned its work to the agency in the span of just four months. “That one felt like getting launched out of a cannon, to be honest,” recalls Hagedorn.
Much of the available talent from within Omnicom had already been repurposed on P&G or had moved over to PHD to help cover its $3 billion win of the global VW media business in June. Yet, Hearts & Science was able to set up offices in Atlanta and Dallas, markets where Hagedorn had lived and worked and where he knew people he could trust to help realize the shop’s mission.
“If we would have had to have done that all in New York, it wouldn’t have happened,” he says.
As for what comes next, Hearts & Science is primarily focused on servicing the massive accounts already on its roster.
“We have modest, I’d say, new business goals,” says Hagedorn. “Our appetite is, yeah, we want to get to that. But at this point, I want to make sure we keep the culture together and we deliver for the clients.”