Last week I blogged about how PR firms are facing a mixed future and it’s certainly extraordinary how quickly times change in Agency Land.
It seems only yesterday that people were speculating about how long it would be until Omnicom’s third-string agency Porter Novelli was put out of its misery and merged with one of its larger siblings: FleishmanHillard or Ketchum.
Three years on, those two agencies’ CEOs – John Saunders and Rob Flaherty – now find themselves reporting to the so-called weakling’s former global CEO Karen van Bergen, who was yesterday elevated to a new role as CEO of the freshly constituted umbrella body Omnicom Public Relations Group. It’s ironic to say the least.
But, on paper, van Bergen certainly has all the attributes required of a role such as this. She previously worked on the client side in two stints at McDonald’s totaling 13 years, in roles overseeing Europe, Asia, marketing, communications, corporate affairs, and government relations.
She also previously worked at FleishmanHillard and during that time ran the OneVoice integrated Omnicom offering serving the Royal Philips Electronics client, principally through Fleishman and Ketchum.
Dutch-born van Bergen speaks multiple languages and is renowned as a superb client person. Her new brief is to attract talent, create customized teams for clients, foster collaboration among agencies, disciplines, and geographies, and improve client service through technology.
She reports to Dale Adams, chairman and CEO of Omnicom’s DAS Group of Companies (Diversified Agency Services), which includes PR, healthcare, CRM, events, specialty, promotional marketing, branding, and research.
DAS contains about 75 firms in total, all previously reporting to Adams, and this move is a step toward unblocking the bottlenecks caused by that structure and speeding up processes. The John Wren-led holding company also yesterday announced the creation of Omnicom Health Group for the same purpose, and I understand other roll-ups may follow in other DAS areas such as branding.
The bottlenecks have made it a little frustrating for agencies wanting to recruit talent quickly and move swiftly on acquisitions. If van Bergen has real authority in this new role, she can help ease the approval process and workflow. She will also continue the move toward the holding company’s PR firms sharing back office functions, which has already started.
The PR firms had a disappointing fourth quarter and 2015, seeing a 6.9% organic drop in revenue in Q4 2015 and 1.4% decrease for the full year.
Omnicom’s PR agencies already share a number of accounts, including the aforementioned Philips and Procter & Gamble, and van Bergen will build on this too. Clients are calling for it because they can use one of the other holding company firms in global regions where their main agency is conflicted out, without having to go off network and conduct a new search.
Frankly, they also like the element of competition it introduces to the dynamic, as firms within the same network vie to do the best job. Nobody can rest on their laurels in a comfy AOR arrangement, because they know one of their siblings is waiting in the wings to step in if a client becomes dissatisfied. Clients also welcome the opportunity to leverage their influence across the holding company to negotiate lower rates.
Richard Edelman blogged this morning about van Bergen’s elevation and called recent events a "changing of the guard," noting the increased influence of European executives over the global PR agency scene, with FleishmanHillard’s Irish CEO John Saunders, Ogilvy Public Relations’ Englishman abroad – and Edelman alum – Stuart Smith, and MSLGroup’s French leader Guillaume Herbette.
There is also the increasing global influence of international president Matt Neale at IPG firm Golin, and Brad Staples is now global CEO of APCO – two more Englishmen.
Omnicom is certainly putting the squeeze on its PR firms in terms of operating margins, and I guess van Bergen will also be playing a part in ensuring those targets are met.
It’s great to see a woman rise to this elevated position in the PR world. One only hopes that such a supreme client operator doesn’t become bogged down spending all her time battling red tape and bureaucracy, because that would be a sad waste of talent.