How are you channeling the heritage of David Ogilvy in re-founding his eponymous agency?
He [Ogilvy] was not building an advertising agency - he was building a firm with a deep culture about building brands. It just so happens that, in 1948, the best way to do this was through advertising. He always focused on building culture; the only thing that differentiates firms where the assets are people is people. And he had a deep sense of the value of creating value, or sales.
Those principles are as relevant today as they’ve ever been. Brands are under more attack than they’ve ever been because, in this new age of perfect information, speeds, and feeds, I can pick one of a thousand brands based on many different criteria.
People don’t want to live a life where there isn’t still some benefit in editing their choices - and that’s where brands come in. We need to make brands matter in a world that has never felt more complicated, disrupted, and more insanely challenging in terms of real-time and always-on.
The company [Ogilvy] broke into segments of capabilities and had a view of championing those capabilities that didn’t always have a common agenda around brand-building. That was easy to do, because a lot of our clients [also] got away from the foundations of brand-building.
To what extent are clients driving the transformation at Ogilvy?
Clients still believe that if they don’t build brand equity, brand differentiation, and create more demand they will not grow. They say: "If we don’t grow, we’ll have to keep getting everything for less." So how do we [Ogilvy] create more brand equity and turn that into marketplace demand for [those brands] that is differentiated from their competition?
Our most progressive clients say "we do things that cost too much and you do things that cost too much, and we all have to get together and figure out how to do things more efficiently." We don’t want to lose the best talent, but do we need 10 people at every meeting? Do we need you to operate in places with high overhead cost and where we’re paying too big a share of it?
There has been some very legitimate pushing back to say "are we [Ogilvy] adapting our business model and cost structure to work as efficiently as we know we can?" That’s one of the arguments I’m making internally for turning the company into an integrated operating company rather than a portfolio of independent businesses.
What was going wrong at Ogilvy?
The unintended consequence of trying to build expertise and a horizontal mix of capabilities is that we ended up adding cost that is not fundamentally about the expertise – it’s more management, back office support, and marketing.
Coming together as One Ogilvy is not about reengineering, it’s about being more efficient and putting more cost with the experts and expertise we want to deliver to clients. I welcome this. Some clients do this with a blunt instrument, and I want to get out of having to work with them.
Our business is really simple – 20 markets in the Ogilvy world make up 90% of our company; 50 clients are half of our company. It’s not like we can’t do this in a concentrated, focused way and get the results we’re looking for.
What drove you off course?
Over time, we do not want to feel we have to chase commoditized service for the sake of just filling the revenue line. We want to work for clients who see our value proposition as materially important to them. We don’t want to be one of 10 flavors of communications offerings that a client chooses from and doesn’t see any differentiation beyond meeting certain cost hurdles and being ready to do the work.
I don’t want to work for clients that don’t want a sustained ongoing relationship with us. It’s too expensive to chase non-recurring revenue. Because of the extra pressures facing our clients and the changes to our industry, over time we became more reliant on a churning of clients to stay even. It might have been fine for a couple of years, but it’s not a sustainable strategy.
We became a mini holding company in our own right. I don’t want to run a holding company. I want to run an operating company. It’s a question of multi-brand versus business brand. Complexity is the enemy of branding – it’s too complex.
How will you remedy that?
The journey is to operate and behave as a single-branded integrated operating company. We’re in the process of doing that in terms of bringing together our capabilities and reformulating them. We’re going to work our way through the branding strategy for that this year.
I didn’t want to start the journey by saying "here’s your new business card." It wouldn’t have guaranteed anything in terms of changing internal behaviors. I wanted to build internal belief before changing anything. I can’t bring David [Ogilvy] back, but I can bring back a founder mentality.
We’re not in the advertising business, or the PR business, or the media business, we’re in the brands business. Client relationships are at the core of what will differentiate us in terms of enduring business value.
Will the company miss brands such as Ogilvy & Mather, Ogilvy One, and Ogilvy PR?
It’s not about taking names off the door. It’s about bringing together the most diverse and robust mix of single brand experts so our value proposition is distinctive and stands apart, so we are much better, faster, nimbler, and more progressive in partnering with any other part of WPP, or beyond if necessary, to meet client expectations – the notion we can do it all is nonsense. There’s no entity out there that can do it all and no client would place a bet on that.
I wanted to make sure the functional areas of marketing, finance, business development, talent, and communications rose to an enterprise role in the company. Rather than creating whole new expense lines for global stuff, we’ve asked people with proven records in creating business value to double hat.
How important is PR in the new mix?
Fifteen years ago, I argued that PR would drive new-age marketing. In a world that’s becoming more transparent, is dependent on third-party advocacy, and the risk factors of branding are heightened by not acting the way your advertising or marketing said you were, it became so significant that, when it came to new age branding, if you didn’t have the people at the core who understood those new realities best – the PR people – good luck.
As a global client leader, I saw the impact of brands’ equity being greatly diminished or destroyed very quickly. The dilemma in that 15-year period was that I couldn’t get clients to buy differently. The clients’ traditional view was that the PR buyer was a better judge of PR expertise and that it was so specialized the client needed its own specialist to buy those services.
I wanted the brand thinking involved in the dialogue but I couldn’t get the clients to buy in that way because they kept separating things. When the CEO became the brand steward, it started to shift. Now the most progressive companies recognize they’re inseparable.
Is there a future for single-discipline agencies?
Ogilvy PR might get called up for a brief labeled PR, but that is reframed and is simply brand. Who is going out shouting that they’re a PR agency anymore?
Horizontality is not measured by the WPP sector brackets. It’s measured by the impact you make with the client in terms of bringing together whatever is required. We will still have a granular understanding of the expertise we are selling – I just don’t need to build a P&L for it.
The advertising folks are actually the easiest people to bring along, because they say "we don’t know what advertising is anymore anyway."
What is your biggest challenge in re-founding the agency?
It is getting people to understand that their value will not be diminished. Their value will increase because of being measured by what clients value, not by what we sell. We’ve spent so much time segmenting the company by what we sold, and measuring people on their effectiveness in selling stuff, rather than whether we as an integrated company are creating enough value for clients so they’ll give us more business and, ideally, cut us in on their success.
The best reason for having sustained long-term relationships is that clients see you as having value in the marketplace and our best clients reward us for that. The more we can prove the value we create, the more they’ll give us. That’s not a problem. It’s down to how can we define that differential value. People are going to have to operate in very different ways, but they will benefit from that value creation.
This isn’t simple, but the belief that we are stronger together than individually is simple. We’ve burned the lifeboats internally. Now it’s all about building belief among others that they want to do it. People want to be part of something with which they have an emotional attachment.
Today, if a 24-year-old sits in a meeting with a client and doesn’t say anything, the client says "don’t bring that person to a meeting again." I don’t want anyone in the room who’s not adding value. And, on the other side of the equation, the 24-year-old says, "If you don’t let me talk in that meeting, I won’t come back." It’s that simple.
What does the future of agency services look like?
In five years, the PR industry will look radically different, and every PR firm in the world recognizes that. Ogilvy is better equipped than anyone to recognize the future and design around it now.
I have so much belief in this diversity of expertise we have at the company and PR as we have historically defined it has a huge factor to play in the future - we need the expertise more than ever.