Photo: Sebastian Mlynarski
|Ogilvy & Mather Chairman-CEO Shelly Lazarus said she wanted to do everything possible to 'bring media closer in rather than further away.'|
In a rare and exclusive interview, Ms. Lazarus told Advertising Age's Matthew Creamer that the media-planning function pulled out of creative agencies in late 1990s needs to go back to its original home, a statement, coming from the head of an agency owned by one of the most aggressive and successful unbundlers of media services, sure to resonate throughout the business. She also touched on her future, the role of marketing in the business world and Ogilvy's involvement in the recent Wal-Mart pitch.
Asked about a startling statistic -- the fact that Ogilvy now gets more than half its revenue from nonadvertising business -- she said she believes that trend will continue, but in two years that particular statistic won't mean anything. She added that the need to redefine advertising is pressing.
In the 10 years since you've been CEO at Ogilvy & Mather, how has the role changed?
The value of the coming together of disciplines that I saw early on working on Ogilvy's American Express business has become much more apparent as time has gone on. We're bringing creative departments together everywhere so that at the time the opportunity is out on the table, there are creative thinkers with backgrounds in interactive, direct marketing and classic advertising, and they're sitting at the table thinking together. Of course, you can never trade off excellence in a particular discipline. No client is ever going to give up excellence for integration. By bringing them together, it brings them to a different place.
You mentioned creative departments but not media. WPP Group was forward-thinking during the unbundling period, but do you think media should be brought back into creative agencies?
I have a strong point of view about that. I don't know how not to have media present in the room, given all the opportunities we have now. I would do everything to bring media closer in rather than further away. Depending on the moment, I just think we need them at the table, because if you take something like Dove, so much of that success has been driven by the public-relations piece. That kind of thinking needs to be present at the start when you're thinking about communications for a brand.
Is that kind of thinking facilitated by moving back to full-service agency models?
Anything that makes media more independent and moves it further away is less good for clients. I have no issue with bundling buying. That's a no-brainer. It's a volume-driven business that's all about negotiation with the media outlets, and the more you got, the stronger the negotiation is. It's the planning part that needs to come back much closer to where the initial thinking is being done.
Do you think your counterparts at media agencies agree with you?
Some of them do. I hope that now that they have their independence and they're strong, they see there's no harm in coming back and thinking with us earlier on rather than just taking the problem away to another location and saying, "We'll solve it and get back to you." Everybody else is working together, and they should be there too. They're very creative and very smart.
Now more than half of Ogilvy's revenue comes from non-advertising services. How do you expect that trend to pan out?
It'll continue, though I think we'll need to redefine advertising. I'm constantly reminded by people around me that when television started it was a separate department. We have a parallel situation now. The definition of advertising is changing as we speak. I don't know if that statistic you mentioned will mean anything two years from now.
In North America, how is the move to a single profit and loss for the various disciplines panning out?
It's been great. The thing that's been surprising that seems obvious in retrospect is how much more interesting it's made everyone's job. Once you're an interactive guy sitting with public-relations people and experts in making TV ads, nobody wants to go back. Well, most people don't. Most people don't want to get back to a narrow view of the world that's functionally based. They'd rather think on a higher concept plane. That works for us because it's great for retention. It's a chance to have second careers on a much broader plane.
In the U.S. Ogilvy has endured some high-profile losses over the past couple of years, including Motorola, Delta and Miller Brewing. Do those losses set off any alarms for you?
No, we have a strategy of maintaining long-term client relationships. Motorola was two years ago, and I don't think this is a very recent issue. We have a Motorola client in Asia who said our work is spectacular and is driving our business. We just kind of hang in there and never stop bringing clients ideas. There was a former client recently who said, "You never go away, do you?" The Delta loss was a little bit of management-change and cost issues. We try not to lose any business, but if you lose one or two a year, it's just going to happen.
As someone known for CEO access, have you noticed CEOs have become more concerned with brand than they used to be?
Much more. Of the ones I know, all recognize it as one of the most valuable assets any company has and that it is their personal responsibility. And that's a big change from 10 years ago. Then, brand was equated with advertising, and there was an ad manager that took care of that stuff. That's not true anymore. Brand is CEO territory now. They care about it. They worry about it.
That said, is marketing spending seen more as an investment than a cost these days?
Brand-building or brand-enhancing is seen as an investment in the most enlightened companies -- though that doesn't mean that procurement doesn't come along to move things along.
You say that with a laugh.
Procurement is there to challenge things. And the challenge is good because it gets you to step back and ask what the value of what you do is.
Have you seen procurement get smarter about the value of marketing relative to, say, buying staples?
Let's be honest: Procurement's role is to drive costs down, so that's what they do. The good conversation with procurement is exactly what you said before and looks at brand-building as an investment and not a cost. The question should be what's the ROI, not how cheap can we get it.
In its recent account review, Wal-Mart chose DraftFCB, a newcomer based on many of the same 360-degree marketing principles as Ogilvy. Were you disappointed?
Sure, we're disappointed. We put our best people on it, and I thought we did as good a presentation as Ogilvy's done. There's nothing I would do differently. That's sort of the acid test to me. We came to love the Wal-Mart people, so all you can do is wish them the best.
Ogilvy doesn't take part in a lot of competitive reviews. Does the involvement in Wal-Mart signal a change?
Because we're in the brand-transformation business and that's where we're at our best, we'll do things like the Wal-Mart pitch. And maybe there's one of those a year. I limit the numbers. Now more than ever, I believe in the focus on current client strategy. There was actually a great moment in the Wal-Mart pitch during a Q-and-A when a consultant mentioned that we don't pitch much. Someone from Wal-Mart asked how we get new business. I said, "Actually, from current clients."
What don't you like about the pitch process?
You can't judge what it's like working together with a client day-to-day. Often, in concern for fairness, you can't even talk to a client. We have no great ideas coming out of Ogilvy that have not been influenced and developed alongside our clients. There are no ideas Ogilvy owns alone. They've all been partnerships. What I hate about new business is there's no dialogue. You work in a vacuum, and you jump out of a cake on a certain day and say: "Here it is." It's not the way we work.
Speaking of you not going away, do you have a timeline for moving on?
I have no timeline. I've always said the day I'm bored, I'm leaving, and I'm never bored these days with everything that's going on.
Most in your position have aspirations to lead holding companies. ...
Well, I have a holding-company CEO who's not going anywhere. So it's a nonsubject for me.
Whom do you see as your successor? A lot of the handicapping is on Brian Fetherstonhaugh, chairman-CEO of OgilvyOne.
There are several people with Ogilvy Worldwide who could be the CEO. ... What I'm responsible for is to have a bench of people who could step in. It's one of the things I spend most of my time worrying about.