Thomas Harrison has a bull's skull in his office. It's a present
from his broker and a constant reminder of what can happen in business
if you don't adapt.
As chairman and CEO of Omnicom's Diversified Agency Services (DAS),
Harrison has spent the last few years helping steer the ship away from
its reliance on ad revenues towards more recession-resistant marketing
disciplines such as PR and direct marketing.
DAS, which includes PR agencies Fleishman-Hillard, Porter Novelli,
Ketchum, Brodeur and Cone, generated some dollars 3 billion in revenues
in 2000. It is Omnicom's fastest growing and most profitable division,
with PR revenues at almost dollars 1 billion. But the ever-ambitious
Harrison is looking to double that figure.
To achieve this goal, he's looking at a shopping list of around seven PR
firms alone. Though he's reluctant to give any hint of the targets, he
mentions public affairs, lobbying and healthcare as important sectors
for the company. 'We don't feel like PR has topped out yet. It is going
to grow in double digits this year.' (Omnicom's PR revenues in the first
quarter were up 14.2%.)
Harrison says the massive PR land grab of 2000 resulted in many senior
industry executives losing their heads. He won't name names, saying he
never focuses on what the competition is doing. 'I think a lot of people
made decisions in the frenzy of the economy that weren't the best
decisions.'
He excludes himself, saying that Omnicom companies made wise
choices.
Among Fleishman's purchases were KVO, and Greer, Margolis, Mitchell,
Burns & Associates, while Porter Novelli snapped up EBS Public
Relations. Though its purchases were small, Omnicom still managed to top
the list in PRWeek's Agency Rankings 2001 (see insert in this issue) in
terms of total US PR revenues.
Harrison won't discuss how he values PR firms, except to say, 'We look
at a company's fundamentals and client roster, and whether clients are
likely to survive. You make fair deals and you don't pay too little or
too much.'
He explains that every deal is different because the owners' priorities
usually vary, with some interested in long-term earn outs, others
short-term cash payments and succession issues.
Carol Cone, CEO of cause marketing specialist Cone, says she opted to
sell her agency to Omnicom because she wanted to work with inspiring
people like Harrison. 'He is a good listener, a totally engaging person.
We met and he followed up immediately by coming to the Boston
office.'
Harrison has an obvious love of public relations. His office is
decorated with framed clippings from The New York Times, documenting his
moves around the industry.
Harrison started out as a cancer research scientist before hanging up
his lab coat to become a 'corporate dude.' Earlier this year, he told a
group of medical students at West Virginia University, his alma mater,
how catching sight of a pharmaceutical sales rep with a nice leather
briefcase helped him decide to join the commercial world.
Harrison got his start as a business rep for Pfizer (an Omnicom client),
and jokes that he went from cell biology to 'sell biology.' He started
working on Pfizer's least lucrative territory, but quickly grew revenues
because he could relate to doctors on their level.
As a rep, he constantly tried to improve healthcare marketing materials,
and later moved to a healthcare advertising agency, Rolf Werner
Rosenthal, before deciding to go it alone. By 1987 he had launched
Harrison & Star Group, and after expanding the business for five years,
he was approached by current Omnicom CEO John Wren.
Though Harrison rebuffed Wren's advances at first, the two stayed
friends.
And in 1992, Harrison finally succumbed to Wren's purchase offer. The
time of the sale - 11am on December 22, 1992 - 'was a turning point in
my life,' says Harrison. The firm was DAS's 25th acquisition, at a time
when integration and globalization were becoming major issues. He became
president of DAS five years later, and CEO in 1998. DAS now has 127
marketing services firms, and PR is the new frontier.
Even during the past three years, Harrison says clients' attitudes
towards the profession have changed. 'I think they are looking at it in
a whole new light. PR is now much more measurable in terms of return on
investment and value generated.'
But since Omnicom encourages competition, as well as collaboration among
its firms, it is easy to see how its advertising agencies feel the need
to create their own grassroots marketing ventures to avoid giving away
revenues to their corporate siblings. BBDO has set up a multicultural
marketing initiative, the S/R Alliance, which, as yet, does not involve
Omnicom PR agencies. Nevertheless, Harrison has been instituting plans
for a financial incentive package aimed at less senior DAS employees to
get them working together.
The mentor in Harrison is often apparent, from his support of companies
he's bought, to his speech to the medical students. He emphasizes just
how his science background has helped him survive in the corporate
world.
'Psychology will help you in business or your personal life,' he says,
'You have to be able to read people.'
THOMAS HARRISON
1974-1981
Sales rep rising to marketing director, Pfizer Laboratories
1981-1987
AE rising to director of client services, Rolf Werner Rosenthal
Advertising
1987
Starts own healthcare advertising firm Harrison & Star Group
1992-1997
Sells Harrison & Star Group to Omnicom and becomes chairman of
Diversified Healthcare Communications
1997-1998
Joins Diversified Agency Services (DAS) as president and COO
1998-present
Chairman and CEO of DAS.
