NEW YORK (AdAge.com) -- Lars Bastholm is leaving his co-chief creative officer post at AKQA, an agency recently named to the Ad Age Digital A-List, to head up digital creative for Ogilvy North America.
The move is a big one, not just in terms of size -- he's jumping from a highly regarded digital shop with $128 million in revenue in 2007 to a big, integrated network behemoth that had $1.8 billion in global revenue -- but also scope. Ogilvy has a full suite of services, such as PR, shopper marketing and traditional advertising.
Mr. Bastholm will report to Ogilvy's head of global digital creative, Jan Leth. Ad Age talked to Messrs. Bastholm and Leth and Carla Hendra, CEO of Ogilvy North America, about the move.
Ad Age:You're moving away from traditionally a digital agency to a big, full-service agency. What does that say about where the business is going?
Lars Bastholm: Let me answer that with an example. I was judging the Effies last week, a new category [the awards show has] called brand experience. The two winners of the category were for the same client but done by two different agencies. Overall it was the same idea but just playing out in digital and traditional space, respectively. We're sitting there looking at it saying, "This makes no sense." There's lots of client money being wasted on telling same story but in two different channels. There's a lot of collaboration wasted.
In a nutshell that's what I've been seeing more and more. You're missing a beat if you're not thinking about this in a more integrated fashion rather than in channels. Consumers don't think in channels; they think in experiences regardless of platform they're engaging with. That's why I started looking to move to a shop where you can do everything and not only work in a digital channel.
Ad Age: AKQA has been trying to move more into the traditional or full-service digital space at least. How do you see the broader agency world shifting around this? Who will win this in the end?
Mr. Bastholm: Everyone, by default, has to try to move into this space. It's increasingly at the heart of everything an agency does. It's where a brand lives 24/7.
Carla Hendra: Ogilvy has had a focus on interactive for over 25 years. It has predated the internet. The internet became the base for a whole new kind of marketing in the mid-'90s, and we've been innovating around that. Digital is hardly an afterthought. And we've been tracking Lars for years. When I was president of the cyber jury in Cannes in 2001, I met him because he was on the jury. And Jan met him because they're both Danes.
Jan Leth: I met Lars when he came to New York four years ago. We met over herring -- it's a Danish mafia thing.
Ad Age:You said digital is the fastest-growing part of Ogilvy.
Ms. Hendra: That's because it's no longer limited to just display advertising or direct marketing online. We have a huge digital influence inside our PR organization. The activation company OgilvyAction is doing digital promotion and digital at retail. There's no company we have that doesn't have substantial growth in the digital component of its business.
For the advertising agency, the amount of branded content we do that's distributed on multiple digital platforms is huge, and it's changing everything about the advertising space: How we conceive and produce content and what kinds of content clients will think about is completely different than the former pre-fab 30- or 60-second [ad] units you're limited to. We still create those, but now we're also thinking about the one-minute-and-38-second version that we want to do on six other platforms.
Ad Age: Can you give an example of digital marketing moving beyond ads and your vision of where it's going?
Mr. Leth: What I'm seeing happening more and more when we talk about plans for big brands is a discussion about what's the big platform, which is no longer just an advertising campaign but a brand-experience campaign. ... Our IBM Think work, for example, is moving in the direction of creating engaging content, and the advertising is more a drive to [that].
Hellmann's is another example. Two years ago we launched the "Real Food" campaign, and we had print ads and TV, and that drove to you to the Yahoo experience, which was a cooking roadshow around real food across America. We also used other Yahoo tools -- Yahoo Answers, Yahoo Maps and video content. Everything really drove to that. The creative content involved not only traditional wordsmithing and design but also heavy emphasis on the media partnership and advertising that drives to it.
Mr. Bastholm: You've heard me pontificate about what I call social storytelling, where you have a much more open-ended dialogue with consumers. It's not about pushing a message but inviting people in, and it requires you monitor the conversation more thoroughly and to be more responsive. ... The idea of alternate-reality games are maybe the most cutting-edge expression of what this can be.
Ad Age: Jan, you made a comment a few years back to illustrate how agency revenue models struggle to adapt to digital. You talked about being charged with distributing opening-day tickets for client Six Flags and doing that through a post on Craigslist. The issue was: How does an agency get paid for that? Is that still an issue?
Mr. Leth: It's still a challenge. The old model was in place for 50 years, and everyone bought into it. The Six Flags one was an extreme example.
Ms. Hendra: But we've had issues where you come up with an enormous idea that's intellectual property, and you get paid a fee basis, and it happens to go gangbusters in the marketplace. That becomes a difficult thing. And especially when you have big clients with very active procurement officers that are trying to push the commodity costs of the agency process down. All agencies will have to re-engineer their business models. My personal belief is digital is at center of everything, and we're not going to do biz the way advertising has been done. We're starting to see that in shifts in media spend, and part [of that] will be driven by the economic situation.