Big PR firms get set to tackle a new decade

A frenetic week of holding company agency developments at IPG and Omnicom set the scene for evolution and revolution in 2020 and beyond.

Andy Polansky swiftly ended Golin's triple CEO experiment on assuming the top role at Interpublic's CMG unit.

It’s been a big week of cleaning house in PR agency land and elsewhere this week, with fundamental changes at two of the big marketing services holding companies: Interpublic Group and Omnicom.

IPG’s relatively new Constituency Management Group leader, Andy Polansky, did not dilly-dally in sorting out the confusing CEO triumvirate at Golin, promoting Matt Neale into the sole CEO position, moving Gary Rudnick to global president and COO, and saying goodbye to Jon Hughes, who is leaving the firm after 14 years.

Over at Omnicom Public Relations Group, CEO Karen van Bergen is relinquishing her role to become dean of Omnicom University and lead the holding company’s Common Ground initiative in support of the United Nations’ Sustainable Development Goals.

And Porter Novelli CEO Brad MacAfee is leaving Omnicom’s third-string agency after four years as CEO – he took over from van Bergen when she was elevated to her group role – and 19 years in total at the firm.

I’ve long been on record as saying the Golin three-CEO experiment instigated three years ago when Fred Cook stepped down was not ideal, especially three white men, no matter how fine they are as people and how well they get on together – which they undoubtedly are and do.

It led to confusion about who was in charge and what was the process for signing off big decisions. And the optics just didn’t look good, especially as the CEO landscape at the top 20 global PR firms shifted to reflect the predominantly female nature of the industry’s workforce and as the #MeToo movement really took hold.

My view was not well-received in certain parts of the agency, especially when we chose to put Neale onto the PRWeek Power List in 2017 ahead of the other two co-CEOs.

As we said at the time: "While it is true that Matt Neale, Jon Hughes, and Gary Rudnick are indeed very close friends and make an effective team, our hunch is that one of these gentlemen will eventually emerge as the long-term successor to Cook.

"If PRWeek had to make a choice, our money is on the jovial Brit Neale, the self-styled James Bond of PR who revitalized Golin in Europe and headed stateside two years ago. Neale is now doing a similarly stellar job at the firm’s New York office." Self-styled was probably stretching it a little as it was actually others who labeled him with that moniker, but you get the drift.

It seems Polansky agreed and he has acted swiftly to do away with the tri-CEO approach having taken over the reins at CMG in July, upon which Gail Heimann assumed CEO duties at Weber. Neale will benefit from the continuing comradeship of Rudnick and steady hand of Cook as he steps up to the top global role at Golin as a solo operator.

Neale can also point to female executives set to play a pivotal role in the firm's future, such as Carrie von der Sitt in the newly created role of global head of growth, New York office president Dawn Langeland, central region president Ginger Porter and long-time Golin stalwart Ellen Ryan Mardiks.

The Golin move is the latest in a series of consolidations and personnel changes Polansky has triggered in the last five months. In October, IPG merged DeVries Global and Golin subsidiary Canvas Blue under the DeVries Global brand. DeVries CEO Heidi Hovland exited and the firm’s new leaders report to Polansky.

At the end of July, IPG merged entertainment shops Rogers & Cowan and PMK-BNC and brought the combined unit under the CMG umbrella (Rogers & Cowan was part of it before, PMK-BNC wasn't). In April, prior to Polansky’s promotion but no doubt with his input, IPG combined Current Marketing and Creation to create Current Global.

Polansky was inducted into the PRWeek Hall of Fame on Monday night in a fantastic evening of congeniality and collegiality at the Edison Rooftop in New York City. He gave an impressive acceptance speech in which he was gracious enough to acknowledge another honoree, Richard Edelman, for him and his firm’s contribution to the PR industry. Edelman was similarly gracious about Polansky and Weber.

It was telling that Interpublic Group CEO Michael Roth and McCann Worldgroup CEO – and former Weber Shandwick CEO – Harris Diamond were in the room to share in the celebrations. But it was just as telling that Polansky invited his executive assistant for the past 25 years, Carla Macina, to the gala dinner.

Such personal touches define his character. As does his well-documented penchant for wishing every staffer happy birthday on Facebook.

But don’t ever think that demonstrates a lack of steel or resolution in the way he does business or faces up to tough decisions. And don’t for a moment think that taking on the CMG role was a presage to a slow ride toward retirement after decades of noteworthy success at Weber Shandwick. Polansky clearly still feels he has a lot to achieve in his career and he is wasting no time in getting on with it.

Golin has actually been on a good run of late, winning high-profile new-business assignments for Lego and Twitter. CMG’s PR firms reported low-single-digit growth in Q3 on both an as-reported and organic basis, so it is bucking the trend of other holding companies, which have been having a tough time this year.

But making changes from a position of strength is something Polansky, Harris Diamond before him, and now Gail Heimann, have specialized in at Weber Shandwick and it looks like they will continue to do so. CMG's numbers appear to back up the wisdom of their approach.

At Omnicom, things are a little different from a PR point of view. Two and a half years ago, the holding company’s CEO John Wren famously commented on an analyst call accompanying Q2 financials that OPRG had too many farmers and not enough hunters.

Wren added: "In PR what we're doing is adjusting some of the leadership - typically you can take our people and you can see that we have hunters and farmers; sometimes we get too many farmers in a place. We’ve got to grab a few new hunters to start the place up. So these are all actionable areas. I can’t promise you the day or the week that it’s going to be fixed, but it’s been identified and there are people working on it currently."

Four months after this honest but rather unpolitic statement, Barri Rafferty was appointed CEO at Ketchum, with incumbent Rob Flaherty moving upstairs to become chairman.

Performance at Omnicom’s PR firms improved a little in 2018, with year-over-year organic growth of 1.8% during the 12 months. But that improvement has been short-lived. In Q3 this year, the PR segment was down a disappointing 3.8% year over year, and my understanding is that OPRG will shrink by at least 2% year over year in 2019 once the final numbers are tallied.

This is all at a time when the holding company's advertising segment was up 3.4% in Q3, healthcare was up 9.5%, and CRM consumer experience was up 1.8%. Some might say Omnicom is a predominantly advertising-led marketing services operation and that PR is having the life squeezed out of it to provide ballast to support other parts of the group. But those are not good numbers by any measure.

Significantly, van Bergen’s replacement is being sought outside Omnicom and it wouldn’t surprise me if Porter Novelli’s next CEO also comes from outside the holding company. So perhaps Wren has sent out another diktat calling for a few more hunters to be engaged to get the ship back on course.

While there are cynics out there portraying van Bergen’s new role as a convenient way to make space for a more aggressive hunter, there’s no doubting that Omnicom University is an impressive institution, and one that is very close to Wren’s heart.

The role has been vacant since the sad death in July of Janet Riccio after a yearlong battle with ALS, so the need to appoint someone new to run it had become urgent.

The management program is based on Harvard Business School principles and participation in it has been life-changing professionally and personally for thousands of individuals who have experienced it, many of whom have gone on to top positions within Omnicom, other holding companies and clients.

If Wren wanted rid of van Bergen he would have had no compunction in shifting her out of Omnicom completely, much as has happened with MacAfee (another very decent and honorable guy by the way), so this is also significant.

There’s no doubt all the large PR firms are enduring challenging times, whether they are within or outside a holding company, and the full-year financial results will be interesting to survey as we journey into a new decade.

There were 65 different PR firms involved in some form or another when we this week announced the shortlists for the 2020 PRWeek Awards. While the usual suspects such as Ketchum and Weber Shandwick posted an impressive tally of candidates for honors at the gala dinner next March, it was noteworthy that a lot of the energy, life and innovation was demonstrated by the small and midsized agencies.

The challenge for the agency behemoths is to inject some of this scrappy innovation, energy and forward momentum into their bulkier structures – and CMG’s Polansky is currently leading the way in doing this.

There were a lot of end-of-year developments on the client side as well, with Dave Samson announcing his retirement from Chevron after 16 years at the energy giant, Charlene Wheeless leaving Bechtel to pursue new challenges, and Kathryn Metcalfe leaving CVS Health for Bristol-Myers Squibb soon after taking over a combined role following the former’s $70 million acquisition of Aetna.

It all feels something like a changing of the guard.

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