'No Benefit' to Being First in This Upfront Market

Q&A: OMD's U.S. CEO Alan Cohen Talks TV, Super Bowl and Commoditization

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NEW YORK (AdAge.com) -- Since taking the job as U.S. CEO of Omnicom Group's OMD a little over a year ago, Alan Cohen has seen the agency rack up an impressive number of wins -- 16 to be exact, including Callaway, Henkel Dial, Levi's Dockers and CBS Showtime.

Alan Cohen
Alan Cohen
Not only have the wins added to the agency's bottom line but they have helped to shed that knock that OMD is merely a media department for Omnicom's creative shops.

Mr. Cohen will in no way take all the credit for the agency's new business activity, but instead credits that success to the internal changes and shifts in mindset that the agency has made over the past 15 months.

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"The place was working well before I got there," he said. "But we have a new corporate structure in the U.S. and we live by these four pillars of strategy, digital, innovation and savings. And in each of these areas we have populated a new team that leads each of these business units."

Mr. Cohen spoke with Ad Age about the conversations the motionless upfront market has sparked between OMD and its clients, the commoditization or lack thereof of media agencies and his thoughts on whether this year's Super Bowl will still be a must buy for marketers.

Ad Age: OMD is usually a very active upfront player, so how are you viewing this year's stalemate?

Mr. Cohen: This can't go on forever because people have to be on the air. With the economy being what it is, it's not surprising that clients and agencies are hesitant to move because we really don't see the recognition of the current economic state at the networks, and the demand is off.

Ad Age: Has it caused you to alter your strategy?

Mr. Cohen: I wouldn't say we are switching strategy away from broadcast. The main thing we are doing is being proactive and talking to clients about alternatives to drive efficiencies. This situation has made us look at some alternatives that will give clients the ability to reach broad audiences in a different way. We are doing that much like we did with our Economic Recovery Act at the end of 2008, where we went to our clients and talked about ways to re-invent current media plans to have more impact.

Ad Age: Do you see any signs anywhere that the marketplace is improving?

Mr. Cohen: I don't know if things are getting better but they don't seem to be getting worse at the moment. We know demand is way down in general for advertising and there are certainly plenty of alternatives for TV. We are working with all marketers and advertisers to figure out what we can do. But the demand is off, so there hasn't been any pressure for anybody to move.

Ad Age: Any thoughts on when we'll see that first deal?

Mr. Cohen: This is an interesting marketplace in that it's not advantageous to move because there is no benefit to being first. We talk to our clients everyday and there's simply a disconnect between what our clients and we think the marketplace is compared to what all of our [media] suppliers think it is. This is nothing endemic to OMD, it's just the industry waiting for something to happen. When our clients want to move, we will move.

Obviously, clients are still launching products and doing things and we are very active in all those spaces. But it's just one of those things where nobody wants to be the first to move in a market that doesn't seem to be recognizing the economic situation we are in.

Ad Age: Do you feel media agencies are becoming commoditized?

Mr. Cohen: I don't think that's the case here. But because everyone is so big and companies spend a lot of money, there's a portion of business that really relies on the analytics and tools to be able to deliver efficiencies, savings and ROI. Is there more of that? In a tough economy, there's probably more of a push for that and that leads us to looking at different things that may happen down the road.

But at the same time, we see as much or more of a yearning from clients that want the thinking, strategy and intelligence. And if at the end of the day we are managing these gigantic budgets for clients, you have to have smart people that you trust to be your marketing money managers. So we want to have the smartest analytics and killer creativity and the combination of the two is what helps us use media to power our clients' marketing.

Every client works with lots of different agencies, probably too many, in a lot of different spaces. We're saying somebody has to step up and become your lead agency and chief strategic agency, and we're working toward that goal of being not only the chief strategic agency but also the central intelligence agency. We are coming to clients with new opportunities, whether in emerging media or pop culture or in media savings. This whole space has become more dynamic. And it's an exciting opportunity to be able to start maximizing the value and importance of what we deliver in that whole advertising relationship.

Ad Age: Do you see any media sellers doing anything really original?

Mr. Cohen: We approach it a little differently than just having sellers call on us to talk about what they offer. We're doing a lot of the proactive nurturing of talking to our vendor partners. There's not a cookie-cutter thing that these sellers could come to us anymore and say: "Look what we are doing."

A lot of it is so custom-tailored to the work we are doing that the pressure point is really on our strategy and planning teams, because what we do is sit down with our clients and say, "How can we successfully launch or re-launch brands and drive traffic to stores?" And often, we are really going to the suppliers and saying here's what we would like to do. And there's a genuine openness, and not because they are hungry for money. Because while the commodity part of the business exists, the way we make a difference in our clients' marketing is using media as a technique to break through the clutter and do new things.

Ad Age: OMD has always been a big buyer of Super Bowl spots. Are you looking at the event differently this year? And do marketers still feel they need to be there?

Mr. Cohen: It's not just my TV background talking here, but I still believe there's a lot of power in TV and big events on TV. So you're still going to see the Super Bowl be an event in which marketers realize they can talk to a lot of people at one time.

As much as the business is about the super-sliverized segmented consumers, you really have to go and create something that is going to capture their attention. You can't just advertise. You have to create word of mouth, get people talking about it and let the consumers be your marketers. And in that regard, we see a lot of work being done on the mass side as well as the micro-segmenting side and everywhere in between. But it's the formation of the overall media and marketing plans that allow clients to break through the clutter and get new products sold, and certainly I would never think that TV is not important anymore.

Ad Age: What are some of the changes you have made in process, structure and people?

Mr. Cohen: We have this constant pursuit of savings and it's powered by our brand of this business intelligence, which uses analytics and dashboards but really makes us more like consultants for our clients. So I can't say we have remade the entire company in a year, but we rebuilt about 10 of our accounts, re-staffed them for this new model of the new OMD that's more focused on how we can help you launch and re-launch products and brands.

We have had a lot of new business wins but a lot of the work we have done has been with our existing clients and showing them how media is the place where you need to have smart marketing money managers. The conversation on media is happening at the highest levels of all these companies now because it's that important.

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