Omnicom lands in political arena

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The ad accusing Republican New York Gov. George Pataki of a "legacy of neglect" from Democratic challenger H. Carl McCall may look like a normal political ad, but it's not: The spot is from a shop owned by a Madison Avenue holding company.

Omnicom Group's late-2000 acquisition of the former Greer Margolis Mitchell & Burns (now GMMB), Washington, has put traditional ad agencies squarely in the center of the political-election arena for the first time.

Mainstream shops have sometimes helped individual candidates, and their executives have worked outside their agencies to aid campaigns. But GMMB has shifted the balance, becoming the first major political-ad force within the orbit of Madison Avenue.

going national

The agency this year is handling not only Mr. McCall's campaign but the Wisconsin gubernatorial campaign of Jim Doyle; the re-election bid of Sen. Max Baucus, D-Mont.; the Oregon gubernatorial race of Ted Kulongoski; the Democratic Senate Campaign Committee's efforts on behalf of Democratic candidates in South Dakota and Colorado; and a West Virginia congressional contest. Earlier this year it handled the unsuccessful Florida gubernatorial primary effort of former Attorney General Janet Reno. In addition, one of GMMB's principals, Jim Margolis, has been identified as a close adviser to U.S. Sen. John Kerry, D-Mass., on a possible 2004 presidential bid.

GMMB is thriving in part because last year it handled the successful off-year gubernatorial campaigns of Mark Warner in Virginia and Jim McGreevey in New Jersey.

While general-market ad spending is in the doldrums, political outlays continue to grow, potentially attracting Madison Avenue's eye. Evan Tracey, president of the Campaign Media Analysis Group, which tracks political-ad spending, estimates more than $1 billion will be spent this year, about two-thirds coming from candidates and parties and the rest coming from special-interest groups. That's up from the $672 million spent two years ago. Despite campaign-finance reform, Mr. Tracey said the numbers may grow again in 2004, as money shifts from the parties to special-interest organizations.

potential

But Fleishman-Hillard, the Omnicom PR arm that bought GMMB, claimed it coveted GMMB's public-affairs ad work and growth potential. The political ads were just something it could live with.

"It represents a small percentage of their work," said Paul Johnson, a senior partner who heads the Fleishman-Hillard branch in Washington. "It wouldn't have been attractive to us if they focused on the political campaigns."

GMMB's public-policy clients include the Robert Wood Johnson Foundation, for which it did an effort to heighten the visibility of the nation's uninsured. It also has done work for the National Abortion Rights Action League, and until recently it handled AARP (the account moved to GSD&M, another Omnicom agency).

GMMB President Frank Greer said about 25% of its billings annually come from political advertising (election-year numbers are far higher). He said the Fleishman/Omnicom link has worked out well. "There is a great deal of synergy," he said. "They wanted a kind of issue-advertising partner and we also do issue-oriented PR. It was a wonderful fit."

Madison Avenue's push to get its share of public-affairs advertising isn't quite as new as the step into candidate advertising. In 1999, Omnicom bought Goddard Claussen, a former political firm that had switched to public-affairs advertising (including producing the "Harry and Louise" spots for health insurers, which launched the big public-affairs ad push) and put that agency under its Porter Novelli unit.

Fleishman is also finalizing a deal to acquire the powerhouse Washington lobbying firm Quinn Gillespie & Associates, whose principals are Jack Quinn, a former counsel to President Clinton, and Ed Gillespie, a former top House aide and adviser to the Bush-Cheney campaign.

exploring issues

Other Madison Avenue firms have also dipped into issue ads. The tobacco industry's nearly $100 million ad effort to fight congressional measures a few years ago was handled by BSMG, now part of Interpublic Group of Cos.' Weber Shandwick. WPP Group's Hill & Knowlton also handles public-policy ads.

Mr. Tracey suggests that one result of campaign-finance reform could be growth in public-affairs advertising, as contributors unable to give soft-money donations to political parties create organizations to do ads.

Mr. Johnson said public-affairs advertising presents fewer client-conflict issues than candidate advertising, and he believes policy ads represent future growth. "We'd rather focus on [issues like] homeland security than look at campaign work as a bumper crop."

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