OMD Worldwide

Last year didn’t get off to such a great start for OMD. In February 2005, client Cingular moved its $400 million U.S. TV and outdoor buying account to WPP’s Mediaedge:cia.

But the agency didn’t let the loss dampen its spirits. In fact, within weeks of the loss, more than 200 U.S. and global staffers gathered in Scottsdale, Ariz., for an intense three-day workshop dubbed “Free Your Spirit.”

It wasn’t the usual pep rally, says Page Thompson, CEO of OMD North America. “We challenged everyone to be more daring more often and said it’s OK to fail. We’re not saying you’re always going to be right, but nothing can be more wrong than doing the same thing year in and year out,” he says.

It’s hard to say what impact, if any, the conference had on the attendees. But the agency did seem to catch fire after the workshop and didn’t look back for the rest of the year. “Things really started to build after the ‘Free Your Spirit’ conference,” says Thompson. “It got people thinking differently and coming together in a way they hadn’t before.”

The numbers tell the story: The agency reeled in an astounding $3.8 billion in new billings worldwide, according to sources, covering 200-plus new accounts in more than 30 countries. That’s almost double the $2 billion in new business OMD won globally in 2004.

According to RECMA, ten-year-old OMD was the top-ranked global agency network in 2005 (as it was the previous year), with $23.1 billion in billings, up 18 percent from 2004.

And OMD U.S. climbed to the No. 1 spot among U.S. media agencies (overtaking MindShare) with $10.4 billion in billings, up 22 percent from the previous year, per RECMA. “This was the year when the network really came together on a global basis,” says Joe Uva, CEO of OMD Worldwide. “OMD really wasn’t a global network until OMD was formed here [in the U.S.] as a full integrated media agency in 2002.”

It took three years to get the U.S. piece properly positioned and fully in sync with the rest of the network, says Uva. And he credits OMD U.S. with taking its game to a new level in 2005. “Last year was the year that OMD U.S. really responded in terms of taking up the mantle of creativity and delivering on the promise of our brand more so than it had” since it was formed in 2002, Uva says.

Big U.S. wins included Bank of America ($600 million), part of an Omnicom team pitch; Lowe’s ($370 million), a joint pitch with BBDO; and Hilton ($120 million). The U.S. agency counted 34 wins last year—more than four times the eight wins it tallied in 2004—for a total of $1.4 billion, or 36 percent of the new worldwide billings, according to sources.

While the U.S. agency had its best year, Uva says OMD’s other major regions also had standout performances in 2005. The EMEA (Europe, Middle East and Africa) region, headed by Colin Gottlieb, posted $2 billion in new wins, about 52 percent of the new business total. Asia and Latin America also contributed strong results with an estimated $330 million and $105 million in new business, respectively.

But Uva says the numbers don’t tell the whole story. Contributing to the overall success of OMD was “best-practice sharing and the quality of the work that we were able to deliver to clients.”

That high-caliber work was recognized— OMD had its biggest year on the awards front. The agency won three Media Lions, the highest number won by an individual media agency in 2005. It also dominated the shortlist with 26 nods. And it was the Gunn Report’s Most Creative Media Agency for 2005.

For generating $3.8 billion in new business around the globe, a record for the agency, coupled with taking aggressive steps to improve both its consumer insights and creative utilization of those insights in media campaigns, OMD has been named Adweek’s Global Media Agency of the Year for 2005.

In the U.S., Thompson cites the record new-business wins, the launching of the retail-focused, Chicago-based Prometheus media agency and the investment in new research as highlights for OMD last year. “In 2005, we were three years old,” he says. “It took some time for us to get all the right people and the right structure in place and to integrate better. By the beginning of last year, everything was in place and our message internally was, ‘We need everybody to come together and rally around this and explode it.’ And that’s what I think we did.”

Prometheus, headed by Bob Habeck, was a work in progress throughout 2004 and was launched formally in early 2005. It started with three OMD clients, J.C. Penney, Dell and Cars.com, and total billings of about $700 million. By the end of last year it had doubled in size, with wins including Bank of America, Northwestern Mutual ($30 million) and Edward Jones ($30 million).

The Bank of America win, at $600 million, was OMD’s largest win and an Omnicom team effort. “We have good partners within Omnicom,” says Thompson. “Our brand agencies are strong, and it doesn’t hurt to have them supporting us as we move forward. That’s a good thing, not a bad thing. Trust me.”

The Lowe’s win, for which OMD teamed with BBDO, is another example of how it’s critical for sibling companies in the consolidated ad world to work well with each other, adds Thompson. “We demonstrated that again and again last year. We work well as a team here, and the media platform at Omnicom is truly at an equal playing level” with the big creative shops.

And Uva says the formation of an internal creative council helped boost creativity. The OMD “Global Ace” award last year went to OMD U.K. for a campaign it created for the U.K. version of Hasbro’s Monopoly board game. The centerpiece of the campaign was the creation of a live online version of the game that featured real taxis equipped with GPS devices moving about London as game pieces. The upshot: 190,000 players across the U.K. played the game over the course of 28 days, with nearly 100,000 players agreeing to receive further contact from Hasbro. The agency calculated that the campaign generated $3.5 million in publicity and other PR, or about five times the cost of the entire campaign.

“I don’t underestimate the value this competition has had on our creative efforts,” says Uva. “It’s not about money, but pride of work. It’s a signal that we’re not just talking about creativity in the way we treat our clients’ business. This is real, and you have to be accountable because at the end of the day, your peers are going to judge you.”

OMD highlights in Europe included winning Vodafone in Germany and several other markets, giving the agency an additional $130 million of the telecom giant’s billings and a majority of the company’s estimated $500 million in overall spending. As a result, Vodafone appointed OMD Europe its global coordinating and strategic planning agency—duties that had previously been handled by Carat.

“What they’ve been doing quietly and cleverly is winning local market pitches over the course of the last couple of years,” says Peter Harris, global director for marketing communications, media and sponsorship at Vodafone. “Germany tipped the balance in their favor, and it made sense to put them in the central role as well.”

Among the agency’s strengths, says Harris, is its “strong capability in providing a network solution and sharing and disseminating best practices. They coordinate well on a multimarket basis.” Also, he says, “they have great strategic planning ability. There is depth to the thought and solutions they arrive at.”

OMD Europe also won a consolidation of the Sara Lee account across 17 markets that added $270 million in new business. PSA Peugeot Citroën ($300 million) and Carlsberg ($75 million) also consolidated multiple markets under OMD.

“All of these were sort of big hairy pitches,” says EMEA region head Gottlieb. “Unlike the states, it’s an incredibly price-driven business, and these pitches across multiple markets can take six months to complete. It’s a monster process.”

In Asia, the agency’s biggest win came late in the year: Johnson & Johnson’s $50 million media assignment for China. Indeed, new business for OMD in the world’s most populous nation totaled more than $130 million, about a third of all the new business in the region. Other significant wins included Amway ($40 million) and Nissan ($17 million).

Mike Cooper, CEO of OMD’s Asia Pacific region, says the agency’s business in China grew 150 percent last year, making it the third-ranked media agency in the country behind ZenithOptimedia and MindShare. “China was our top achievement last year,” says Cooper. “It’s really critical for us to a major player there,” given the market’s growth prospects over the next decade, he says.

OMD also conducted a major research project in the region that documented the changing face of the Asian female consumer. “Women there are becoming increasingly independent with their own spending power,” says Cooper. “Insights about those changes are important to clients, and it’s critical that we bring our own research capabilities to bear on these trends rather than rely of the typical syndicated research.”

OMD’s Latin American region also made significant strides last year, climbing into the top-three ranked agencies in the region based on billings, says Mauricio Sabogal, CEO of OMD Latin America. Progress also came on the creative front with two of OMD’s three Media Lions awarded to work from OMD Columbia. One was for an Internet campaign for Chevrolet, the other a TV ad for Clorox Color.

Regional wins included financial services company Altas Cumbres ($12 million) and PromPeru, the tourism board of Peru ($10 million). “We’re now in the top three,” says Sabogal, up from the fifth-ranked spot in 2004.

While clients are praising OMD’s strategic planning, the agency is taking steps to bolster that discipline.

One notable example: Last year, OMD teamed with Yahoo! to conduct a major multimarket study examining how younger people consume media today. And in the U.S., the agency launched the Next research campaign, persuading a dozen Omnicom clients to invest about $10 million to study consumer usage of new media such as VOD and wireless.

The Next project takes an investment fund approach to research. Five or six research initiatives will be undertaken, but the clients involved (including McDonald’s, Bank of America, Visa, Lowe’s, General Electric, Clorox, Federal Express and Anheuser-Busch) participate directly in one or two each. However, they get the results from all of them, “so that for every dollar they invest, they get $10 worth of learning back,” says Thompson.

“One of the reasons we’ve expanded with them over the last couple of years is to get more creative thinking about the way we use media,” says Dean Barrett, svp, global marketing, McDonald’s, adding that the “vast majority” of the fast-food chain’s global media business is now handled by OMD.

“The media environment that we’re living in is changing so fast, and OMD has centered on that, stressing that we need to look at media differently,” says Barrett. “They’ve brought a lot of creativity to that conversation and process within countries where we do business and cross-border opportunities as well.”

Barrett cited McDonald’s first global TV buy in 2005 via an MTV program that aired worldwide called Advance Warning, about up- and-coming new music and musicians, as an example. “It was great media exposure and an opportunity to reach young adults around the world through a program that connected their favorite music and artists with our brand,” says Barrett.

As for 2006, Uva says OMD will continue to invest in proprietary and co-sponsored research to sharpen further the agency’s knowledge of evolving media consumption patterns. “One of the goals is to work more closely with distributors like DirecTV and Comcast to understand behavior taking place in digital homes,” says Uva. “What is the tuning experience like? How is it changing in DVR homes, and are there differences by genre or program type or even different viewing patterns on the weekends versus weekdays?”

While Thompson was more than pleased with 2005 results, moving forward, he’s focused on creating “the agency of the future” by putting in place a new organizational structure that OMD U.S. will migrate to in the next 18 months. “The big difference is going to be data management,” he says.

The agency is likely to divide into four new main units that focus on video, audio, graphics and mobility, he says.

Managers from all units of the agency recently attended a two-day seminar to consider the implications of the organizational changes. “Next, we’ll bring in a change management company to lay out a blue print,” Thompson says. “We’ll start migrating to this in the second half of the year, and it will take 12 to 18 months to complete.”

“But at the center of everything is behavioral data,” says Thompson. “Unless the government steps in, the sky’s the limit. How far it goes, I don’t know.”