Media Report: A Conversation with David Pattison

PHD’s CEO on building a network, moving to the U.S. from England and what’s next for his agency

Q: You’re the “P” in PHD. How did you feel when Omnicom chose to keep the PHD name when putting together its second media network?

A: [Laughs] I can’t say I was too upset about that. No other media brand has anybody’s name on it. PHD in the U.K. was a planning and strategy brand, and everybody else was a buying brand, so when Omnicom was looking to have a second brand in the marketplace and they asked me to run it, it’s fair to say it wasn’t necessarily going to be PHD but a PHD-type offering. But we kept coming around to that name because we couldn’t come up with anything better.

Q: When PHD was restructured in March 2002, you were based in London. Why did you relocate to New York in January?

A: [Omnicom CEO] John [Wren] asked me to come. [Omnicom Media Group CEO] Daryl Simm was instrumental in convincing me it was the right thing to do, but John invited me. I felt I needed a new challenge, having done PHD for 10 or 11 years just in one market. Initially, I felt I could probably do it from London. But clearly, if we establish PHD as a brand in the American market, then it will be easier for us to roll it out around the world. I thought the opportunity to work abroad had passed me by. So I grabbed this with both hands.

Q: You worked in media in England for more than 25 years. Coming to the U.S. must have been a big change.

A: Jesus, this market is interesting. The scale is just staggering. When you’re in it, I don’t think you can quite understand that. There’s such diversity. Process is very important. But there’s such an opportunity to introduce some of those thinking and strategy areas that everybody is claiming to have. You are 25 countries within one country, and there are no single solutions.

Q: We always hear about the qualitative differences as well.

A: The U.S. is not as evolved in some ways and miles ahead in others from Europe. It isn’t as separated still from its creative partners. A lot of the strategic thinking has continued to be done in account planning departments of creative agencies. And again, because of the size of the country, there’s so much process just to get airtime bought or newspaper space bought or just to get the media plan down. But in the whole area of product placement, of branded entertainment, America is miles in front of any other market that I know. Now, most of that may be due to regulation [abroad], but still, the States is miles in front, and that’s where some of the really big opportunities lie.

Q: PHD kept a low profile in its first year in the U.S. Why?

A: The first year has been about taking three companies—Advanswers, Creative Media and Pentacom—and turning them into one. That’s a big task. I think we’re a good way through that now. We’re an “established startup” with nearly $4 billion in billings. We’re in seven different cities. We’re 500 people. On top of that, we’re in a competitive and difficult trading environment. And we’re a “show, don’t tell” organization. So we didn’t go out there telling everybody what we’re going to do.

Q: What was the easiest part of that process, and what was the most difficult?

A: The easiest thing, funnily enough, was getting staff and clients to buy into [the idea] that PHD was the right thing to do. Creative Media and Advanswers realized they needed to be part of something bigger, and they identified a lot with what we wanted PHD to be because both companies were also high on planning and strategy. Pentacom and Chrysler realized that being a single client offering maybe meant that they didn’t get as broad a view on the media world as perhaps they should. I think the hardest part was just the volume of things that needed to get done. You wanted to reassure people that things were going to be OK, but you had to get through a lot of things to get there. They felt like they were slightly in limbo. Although we did have some natural attrition, it’s nothing we wouldn’t have done looking at the revenue and cost base anyway. We were quite lucky there, because there were only two cities where we had to put two groups of people together, New York and Chicago, and that was mostly because of Chrysler.

Q: You were relatively quiet on the new- business front as well in year one.

A: There wasn’t a lot of business out there to pitch. We picked up one or two pieces of business: [$15-20 million supermarket chain] A&P, and we won [the $60 million-plus] Reebok in New York.

Q: PHD lost to MindShare in the Nextel review this year. But you defended the Gap’s consolidated media account against some pretty big agencies. What do you think a win like that does for PHD?

A: We have to be able to show that we can compete with the Starcoms and MediaComs of the world. But the thing I want to put in place to separate us is that we really understand brands. Most media agencies now understand consumers and how consumers relate to media. I don’t think that’s where the game is now. I think it’s how consumers relate to brands. That’s why the Gap win was important. We like to think we understand their brands and the differences between them.

Q: Still, your network is one of the smallest in the top tier.

A: Yep, we are at the moment. Quite a lot of clients never heard of us, and quite a lot don’t know what we stand for; that’s the next phase of our job. We’ve got to get on those [big client review] lists, and we are. Now we have to convert. We don’t have to be right for everybody, just 25 percent of the market. I don’t know how many billions [of dollars] of business that represents, but it’s enough. I said to Omnicom when we started that it would take 18-24 months to be in the marketplace with the right people, and we’re about 12 months into that process.