Principals: Stuart Smith, global CEO; Michael Frohlich, EMEA CEO; Marshall Manson, UK CEO; Saada Hammad, Middle East regional director; Scott Kronick, president and CEO, Asia-Pacific
Ownership: WPP (part of Ogilvy & Mather)
Offices: Global 86; US 9; UK 1; APAC 26 wholly owned, 5 partner
Revenue: Global $300m to $400m; US $100m to $150m; UK £30.75m (estimate); APAC $137m (estimate)
Headcount: Global 2,550; US 460; UK 250; APAC 1,320
After a series of flat years, Ogilvy Public Relations produced its best 12 months of global organic growth for half a decade, at 8%, under the leadership of turnaround specialist and global CEO Stuart Smith.
Eighteen months in, Smith accepts there’s still a long way to go in delivering on his strategy, but the agency grew its top 10 clients by 10% in 2015 and he feels he has the right foundations in place. Ogilvy outperformed parent company WPP’s organic global growth in PR and public affairs in 2015, which was 6% year on year.
"I’m in the first year of a four-year plan in terms of growth we need to achieve in North America," says Smith. "Being bigger is important because we need scale. We are 15% of the revenue of Ogilvy & Mather. Integration opportunities alone mean for every 10 people in this organization, I’ve only got one of them."
He adds there are more opportunities inside the group’s New York HQ than it can exploit: "The tail is never going to wag the dog, but people see PR as a magic ingredient. We may only have 15% of revenue, but we’re seen as having 50% of the opportunity."
Smith aspires to create a top five agency and says O&M "deserves" a top five PR firm in North America. He believes this doubling of business "won’t be too difficult to achieve" with talent, unity, focus, and motivation, coupled with the right acquisitions in the right markets: "If we do a lot of acquisitions quickly it will be three years, more slowly and it will be five."
New York, Chicago, and Latin America all have acquisitions in their futures, he says. The firm bounced back from a bad 2014 in Latin America.
"We got back on track and acquired ConceptPR, which doubles our footprint in Brazil," he adds. "We have to acquire to grow and we’ve an active pipeline."
Ogilvy’s numbers were bolstered by the first full year of majority ownership of its Middle East and North Africa operation, Memac Ogilvy, which added 12 offices to its global network.
Up to 45% of Ogilvy PR’s U.S. business is healthcare related. The health practice went beyond big pharma and diversified into healthcare technology with Virgin Pulse; into genetic diagnostics via clients Cambridge Diagnostics and GeneDx; and into molecular diagnostics through Biotheranostics. It operates downstream while specialist subsidiary Feinstein Kean Healthcare works at an earlier stage. In 2015, the two forged a much closer relationship — also working closely with Ogilvy CommonHealth, an Ogilvy unit specializing in health behavior change.
Oncology activations for Bristol-Myers Squibb by all three epitomize the approach, stretching across different products and the overall franchise, including content management, data, milestones, and consumer campaigns such as Ready. Raise. Rise. to increase awareness and support cancer advocacy groups.
Ogilvy posted strong growth in Chicago under Michele Anderson for the second year running and had a "stellar" year in New York under Jennifer Scott, also for the second year. But it lost its McGraw-Hill Education account back to RF|Binder after just a few months. New York benefited from the revitalization of its Tech East and staff engagement practices, launch of specialist group Boutique@Ogilvy, strong competence in CSR and sustainability, and expansion of its 40-strong Media Influence practice under Jennifer Risi, including eye-catching work for Suez Canal, Bloomberg Philanthropies, and MSC Cruises, and new nation-branding contracts repping Gabon and Indonesia.
In public affairs, former North America CEO Rob Mathias’ brief reverted back to concentrate on reinvigorating the firm’s DC office, which Smith notes is "navigating a changing client portfolio across government and the public sector."
In DC, Ogilvy’s work has been concentrated on the Department of Health and Human Services, but it is trying to diversify, winning work with the United States Agency for International Development and the Peace Corps, offset by the loss of a big contract for the National Institute of Health and business migrating to other parts of O&M.
Putting growth plans in place
Smith improved governance by expanding Ogilvy PR’s executive committee from four people to 13, introducing a 17-strong board, and establishing eight global growth streams containing over 50 members from four regions.
"We now have 70 senior people with a lot more exposure to the overall strategy and to me," explains Smith. "We will set up an executive committee for North America as well."
He is placing bets and embarking on experiments, including trying an integrated model in Atlanta, an office now led by O&M after veteran office head Mickey Nall left in February 2016. He is set to appoint new leaders in Los Angeles and San Francisco, following the departure of West regional MD Nathan Friedman. Global staff turnover in 2015 was 26%, higher than Smith would like, about 20% in the U.S., and higher in China. "Some churn is good, below 15% is bad. Above 30% is not good at all," he adds.
More and more CMOs are asking for what Ogilvy PR does. "It’s a really important part of the regional P&L job to work out what’s going on with our big accounts and then contribute," Smith says. "Everyone’s rushing to social and content. We’re developing our positioning around earned influence and still proudly hold the name PR."
UK & EMEA
Globally, 2015 was Ogilvy PR’s strongest year in half a decade, with revenue rising above expectations. After Asia-Pacific, EMEA was its second fastest growing market in 2015. It was also, in the words of EMEA CEO Michael Frohlich, the year the EMEA region "grew up".
"In the previous year, both Africa and the Middle East had become majority owned, so they came fully into our region, and the region became much bigger in 2015," says Frohlich, who was promoted from UK to EMEA boss in September 2015, with Marshall Manson, EMEA MD of Social@Ogilvy, later handed the UK reins.
The year also saw the arrival of new Dusseldorf MD Babette Kempner and a new Istanbul head of social media Gulsah Peker, as well as new London hires Serge Vaezi (MD), Jaiye Elias (business development director) and corporate director Jeremy Lucas – while Eva Snijders left her MD role in Madrid, and Suresh Raj, UK & EMEA business development director, was promoted into a global business development role.
Frohlich says: "One thing that we spent a lot of time on last year, and continue to do, is creating synergies across the region. A lot of it has been about educating and motivating people in understanding the value of working together. We’ve now really started to hunt together, pitch together, win together and work together." However, he adds that this is not always straightforward. "Because the region is at such different levels of maturity, it’s not just ‘plug and play’ – you have the same conversation, but you have it many different times."
Indeed, Frohlich is insistent on the firm’s EMEA offices remaining "truly local", pointing to Middle East head Saada Hammad being an Arabic-speaking Lebanese native, and Kenyan Nick Wachira running the Nairobi office, as examples of this. "If you look at a lot of the other networks, in the Middle East for example they are run by expats and that’s just not right," he says.
He says that all but two of the firm’s biggest 20 clients in EMEA are served by multiple offices – while among UK clients as a whole, around half have some international element, a balance Frohlich is happy with: "I don’t think you can beat your team coming in every morning and seeing the actual coverage they’ve generated; that’s what you don’t get with the big international accounts."
Frohlich points to one particularly satisfying 2015 client win as an example of this local but global approach paying off: TKMaxx. "That is multi-market and new markets are coming on board, and this has given everybody an opportunity to work together," he says. "We also have a lot of clients across the region that had worked in isolation – Unilever, Coke, Google – we had a lot of clients where we weren’t really joining the dots, and now we are." Other major new wins included corporate work for pharma firm Merck, a consumer tech brief for Huawei, as well as IKEA and Sanofi in the Middle East, Canderel and Virgin Active in South Africa, and Anglo American globally. Meanwhile, the firm lost an EMEA account with Motorola, and another client in UK Trade & Investment.
"I would say our brand marketing, or consumer practice, has gone from strength to strength across the region and a lot of that was due to more integration," Frohlich says, but he also argues the firm does not get enough credit for its healthcare work.
Frohlich says that brand purposes is a "growing area" for the firm in which he expects to generate more business, and looks forward to the flourishing of LGBT issues practice Ogilvy Pride, which launched in EMEA in 2015. Manson, meanwhile, says that in the UK in particular there is a "huge opportunity" in both crisis and issues management, and employee engagement.
While integration – which Frohlich says is "in our DNA" – enjoyed growth thanks to new client opportunities, the traditional skills of media influencing remains at the core of Ogilvy’s work, Frohlich and Manson agree. During 2015, Ogilvy set up a media influencer community based in New York, which is being led in EMEA by Ogilvy’s head of media in London, former broadcast journalist Phil Reay-Smith. "This is about really pushing a new way of doing media relations using data-drive media analysis, so we’ve got media leaders in every country who talk to each other about keeping media influence at the core of the business but also about best practice, learning, moving things forward, innovation," Frohlich says.
Manson adds: "The media might change, we might talk more about influencers but at the end of the day being able to connect with someone, have a good conversation, articulate a great story is still the core of what we do, and will remain so."
Under the new Frohlich-Manson leadership, Ogilvy is primed for growth, even if Manson expresses concern over broad macroeconomic uncertainties, including the EU referendum and an unpredictable presidential election in his native US. Frohlich is less concerned about this however, saying: "I can’t change it, so I don’t worry about it."
Scott Kronick, regional president and Asia-Pacific CEO at Ogilvy PR is in a buoyant mood. In 2015, Asia was once again the largest region for Ogilvy PR globally, in terms of revenue, profit and headcount, mirroring its achievement from last year. This time though, it’s gone one better.
"We had the best year ever", says Kronick, adding that the region posted double-digit growth "in the low teens", compared to single-digit growth last year.
The agency doesn’t disclose exact revenue but the range in Asia falls between US$120m-US$150m. Globally, the agency says it experienced strong growth in 2015, the strongest for five years, with organic growth rates returning to above average levels for the first time in five years.
All regions contributed to this; after Asia-Pacific, EMEA was the second region that grew the most, followed by Latin America and the USA.
Kronick looks after 31 offices across 13 markets and says that Malaysia was the one market to perform below expectations, largely, he says, as it had a hard act to follow from the previous year.
He attributes overall performance to an exceptionally strong year for new business, with technology and healthcare continuing to be key sectors for the agency, alongside public affairs. Significant wins for the Asia-Pacific region include, in Australia, Lenovo, Tourism Australia and Westfield, Fotile, MTI Singapore and Hong Kong Marathon.
Asia outbound work is also "buzzing", says Kronick, with an increase in the number of Chinese clients looking to extend their global reach. Among losses Kronick lists LVMH in Shanghai. "Our growth has been much bigger than our losses and we’ve also been very fortunate to maintain a strong and consistent leadership team across the region," adds Kronick.
Emily Poon was promoted to deputy managing director of Ogilvy PR’s Singapore branch in December, while Andrew Thomas took on the role of head of Social@Ogilvy in Asia-Pacific, in conjunction with his position as Ogilvy PR president, SE Asia & India.
A key appointment was that of Kavita Bhaskaran – Abbott India’s former public affairs head, who also previously served as executive vice president at Ketchum Sampark.
She filled the vacuum of leading Ogilvy PR’s India unit, joining as president in August and Kronick says that account wins thus far include Lexis Nexis following a competitive pitch. In India, the agency is also working with the Ministry of Skills Development and Entrepreneurship.
"Historically we have not been a big player in India, largely because of the strong perception of Ogilvy as an advertising business – the agency is well known but for disciplines other than PR," says Kronick.
"Kavita is rebuilding a team, we are moving away from that perception and we have big expectations for the market. We have not had as big a presence in India as we want but we are now inching up towards this."
Other highlights in the last year include the ‘Great Names for Great Britain’ campaign for VisitBritain, run out of Ogilvy & Mather’s Beijing office and in collaboration with Ogilvy PR, which encouraged people to come up with Chinese names to rechristen British landmarks. It won two Gold Lions at Cannes.
New divisions launched this year include The Boutique@Ogilvy in North America, a specialty division that provides comms strategy for retail, fashion and e-commerce clients, while helping brands forge strategic collaborations in the fashion space.
Given Ogilvy PR’s strong luxury fashion portfolio in China, where the agency works with the likes of Prada and Swatch, Kronick hints that it would not be surprising for a similar concept to be rolled out in Asia.
"The luxury goods sector in China is a hungry and fast-growing market – while we are not seeing the levels of crazy growth we experienced in the past, it’s still a very attractive market," says Kronick.
He is also on a mission to continue spreading the word about ‘earned influence’ – the agency is increasingly working with CMOs on campaigns where earned media is playing a more important part in the communications mix, a trend that has followed through from last year and which shows no sign of abating.
"It’s the one positioning I think you will see a lot more of," he says. "It reframes and redefines us and is all about how people consume information and ensuring you get the right message to the right people at the right time."
Increasingly, says Kronick, clients want a multi-disciplined approach and to this end, PR is now playing a central rather than a peripheral role. He points to how a growing number of agency employees with a PR background are now taking leading positions at the agency’s regional offices.
This includes Selina Teng, co-managing director of Ogilvy PR Beijing, who was promoted in January to the position of president, Ogilvy & Mather Group Beijing and Jacey Lee, Ogilvy PR managing director, who was promoted in November to the role of chief operating officer at Ogilvy & Mather Malaysia.