OMD Used to be Omnicom's Weak Link, Not Anymore

Ad Age Names OMD Media Agency of the Year, 2002

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Just two years ago, OMD was Omnicom Group's Achilles' heel. A media-buying lackey for its more glamorous and powerful creative siblings in the U.S., disparate and disorganized in Europe, and a nascent presence elsewhere, OMD was described by pundits and rivals as "a sleeping giant," "no more than a statement of intent on a letterhead" and even as being like "Shaq in a wheelchair."

All that has changed. OMD has become a unified planning and buying force with a consistent global message. It picked up $2.3 billion in new business in 2002, including several hotly contested global accounts, while losing just shy of $600 million. It lured top talent from big rivals. It developed a proprietary planning process that has yielded a host of innovative award-winning campaigns. It put together the biggest single media deal in history, a $1 billion cross-media pact with Walt Disney Co. and ABC. Shaq, it seems, is fully fit and scaring the hell out of the competition. As a capper, OMD becomes Advertising Age's Global Media Agency of the Year.

To hear Omnicom Group CEO John Wren tell it, it was always going to be this way. "If you look at what was written about OMD prior to last year, you can see that everyone was critical of the pace at which we were trying to create our own MindShare," he says, alluding to WPP Group's media-buying operation. "We knew we had media power in our agency groups, but we didn't want a shotgun marriage; we didn't want to unbundle just because it was in fashion. We always said we'd do it at our own pace and do it well. We have. OMD is now in a fabulous position."


To U.S. and European observers it might seem that this turnaround is too rapid to be credible, a fact acknowledged by Colin Gottlieb, CEO of OMD Europe, who says he "wouldn't have believed, even 18 months ago, that OMD would be where it is today." But the seeds of the transformation were actually planted in 1997 in Asia, when Mr. Wren sent Mike Cooper, CEO Asia Pacific, to Hong Kong to build an Asian network.

Mr. Cooper thought he was going to be fitting into an existing global network, that he would pick up the tools and processes of the more established networks in regions like Europe and transplant them to Asia.

"I had no idea that we were, in fact, going to be the first proper network of agencies," he says. "Everywhere else in the world we were like a cottage-industry media company: lots of good offices, but no network to speak of and no positioning. Even promotional materials I was sent to work with were of limited use--the logo was printed on a background of solely European faces and had a European flag in it. Not much use in Asia. There was little I could work with."

Mr. Cooper set about recruiting and establishing offices throughout the region, offering them clear direction and a positioning that focused on innovative planning strategy and the quality of the agency's people. While the network he created still has a way to go to match the revenues of the 800-pound gorilla in the region, MindShare, it has now enjoyed at least four years as a power player in the area. In 2002, OMD added to an already impressive client list, picking up regional assignments for Kao China, 3M Singapore and Thai telecom operator DTAC.

But for a long time Mr. Cooper felt he was achieving growth in Asia despite the rest of the world. "I felt I was in splendid isolation," he admits. "I really couldn't sell clients a global offering. That's why 2002 was phenomenal. I didn't think they could do it, but they have--we can now confidently say we are part of a global business, and that gives us a little extra swagger in our step. ... And it makes us proud to think that a lot of our global positioning today has its origins in Asia."

As European chief, Mr. Gottlieb takes a similar pride in OMD's transformation, feeling that the catalyst for the turnaround was the determination of the European chiefs of Omnicom's BBDO Worldwide, TBWA Worldwide and DDB Worldwide networks to create a strong standalone global media agency. The first manifestation of that determination was Mr. Gottlieb's appointment. Persuaded to leave the agency he founded with partner Nick Manning, Manning Gottlieb Media, he signed in February 2001 for the task of pulling together the disparate network of European offices.

no small task

It was no small task. OMD's weaknesses had been exposed by the loss of high-profile European accounts such as the consolidated media planning and buying task for Nike. OMD had some good European offices, the London office being one of them, but clients were well aware that there was no cohesion among them. Rumor even suggested a number of the office heads had never met, and the media were critical of the levels of talent at the agency.

Mr. Gottlieb set about changing that by hiring top names as category leaders. Simon Francis was lured away from MindShare to head strategic planning. Nikki Mendonca was hired from Capital Radio to head new business and marketing. Mary Stewart-Hunter, a former vice chairman of Lowe Howard-Spink, was brought in as director of consumer insight. Ian Lomas, formerly head of TV buying at the London office of OMD, was given the role of head of trading.

Each of them represented additional expenditures by Omnicom, a demonstration of its will to make OMD work.

Each of the category leaders was told to create a "community," taking one person from each marketplace to be in their cross-border groups. The idea was to get people talking, to ensure ideas were exchanged, to create a channel for the dissemination of best practices and to create a matrix reporting structure that would give Mr. Gottlieb a number of different lines into each office.

In short, the communities were designed to allow Mr. Gottlieb to start to impose a single agency culture.

It worked--not only did OMD start sharing processes across borders, achieving a more consistent end product, but crucially it demonstrated the fact by landing pan-European business that would almost undoubtedly have gone to one of its rivals just a couple of years earlier. For example, OMD was able to marshal its national forces last July into a single army to fight off European powerhouse Carat and retain the $190 million European consolidated media account for Nissan. Speculation had been rife that Nissan would go to Aegis Group's Carat as OMD had won the pan-European $760 million assignment for rival automaker Peugeot-Citroen just under a year earlier.


As Mr. Gottlieb points out, none of the U.S.-based creative agency chiefs ever tried to run interference on his unification of OMD Europe, a promising indication of their will to make similar progress in the key North American market.

In fact, the creation of a standalone operation in the U.S. coincided with the arrival in America of one of the strongest proponents of OMD's independence, the European CEO of TBWA, Jean-Marie Dru. "He was certainly a key driver," says Mr. Gottlieb. "The fact he wound up in New York, and on the worldwide board for OMD, gave us a very powerful voice for action."

But all involved agree the seminal point in the recent history of OMD was the appointment of Joe Uva as worldwide president-CEO of the agency. After a yearlong and well-documented search for a global leader and change agent, Mr. Wren finally got his guy in January 2002. Mr. Uva was lured from his job as president-sales and marketing at Turner Broadcasting Sales, a division of AOL Time Warner.

Mr. Wren had first contacted Mr. Uva back in April 2001. Although Mr. Uva didn't agree to take the job until December, he did some important work in the intervening months, helping to focus the minds of the Omnicom creative agency chiefs on the goal at hand. "I said there was no point in me joining OMD until they had decided exactly what they wanted to create in the U.S.," Mr. Uva says. "I didn't want to take a job where we'd just be creating a global face, so I asked them whether they really wanted to build an agency that could compete with Zenith, Starcom and MindShare. It was obvious that until the U.S. business became integrated, we couldn't win standalone accounts."

Once Mr. Uva believed the will and vision were there, he came on board. He spent the first six weeks coming up with a plan to integrate the planning operations of DDB, BBDO and TBWA, which consisted of more than 590 staff, into the buying operation that was the existing OMD.

"We knew we couldn't rush the physical restructuring," says Mr. Uva. "We knew that every member of staff had to feel they were part of something exciting and that their ideas would be essential to our success."

Mr. Uva put together an operating council to help implement the merger of the planning departments into OMD and to give each of the regions and agencies a voice in that process. Dan Rank, the managing director of OMD USA buying (who has since left the agency to return his family to his native Midwest), was an instrumental member of this council. Mr. Uva describes Mr. Rank as a "big piece of the glue" in the formation of a unified agency.

Other council members included Mike Drake, formerly of BBDO, who became head of OMD East Coast (who also recently moved on, to be replaced by Jill Botway from Initiative Media), and Monica Karo, formerly of TBWA, who became managing director, OMD West Coast.

The missing link was a managing director for Chicago, so last July OMD swooped for Kathleen Brookbanks, then managing director of MindShare's Windy City office. Ms. Brookbanks was a significant hire, proving OMD had become sufficiently appealing to attract senior talent from its biggest rivals.

"There aren't many agencies I would have moved to," says Ms. Brookbanks. "I liked the vision of an agency that would be balanced between complete independence and overdependence on its agencies. And I could see the agency had a strong leader in Joe Uva."

With the operating council in place, and the integration plans in the capable hands of Mark Amabile, worldwide agency chief financial officer, Mr. Uva set about traveling the world, humbly--according to the comments of Messrs. Gottlieb and Cooper--learning from work done outside the U.S.

"I found a very creative approach to planning, especially in Europe," says Mr. Uva. "I wanted to capitalize on the level of creativity. We wanted to own the `creative media' position, which fitted so well with our heritage."

Out of that heritage, the work being done in Europe and Mr. Uva's personal obsession with consumer insights and entertainment analysis emerged the agency's current positioning, around the slogan "Insights. Ideas. Results."

The task of turning that slogan into more than a statement of intent was handed to Page Thompson, who last November ascended from the role of chief strategy officer to CEO of North America. Working with Simon Francis, the former MindShare director hired as head of strategic planning in Europe, Mr. Thompson devised an ownable creative planning system that was given the moniker "Checkmate."

Based around a four-stage process involving understanding, designing, creating and capitalizing, Checkmate is a proprietary system about which the agency is rather secretive. What Mr. Thompson will say about it is that it was designed to "guarantee the sanctity of creativity in the planning process." He adds that "it requires the client's involvement at the beginning of the process and puts media planning alongside message creation."

Specialists come to play

Mr. Thompson also points to the fact that it often involves people from OMD's numerous specialist units, so that brainstormers, researchers, direct marketing experts, PR specialists and event marketers sit at the table alongside the creatives, buyers and planners.

Mr. Gottlieb, whose European operation was already using a similar system in its campaign planning, admits that some of the key stages in the process are similar to those used by any campaign planner.

"We are not reinventing the wheel here," he says. "What we are doing, however, is creating a discipline around which we can wrap some really smart people and some really smart tools. You need the system and the people. Then you wrap around that the data, insight, flair and imagination to come up with that really cute strategy. A Ferrari Enzo shares [similar] components as a Trabant--we wanted the blueprint that would allow us to create the Enzo every time."

So has it worked? It has, according to Ken Kaess, president-CEO of DDB and one of the agency chiefs who had to be convinced that the creation of a standalone operation would not have an adverse effect on the link between the creative and planning processes. "They didn't just talk the talk. They put together the systems and procedures to ensure conductivity between the agencies. What was particularly amazing was the speed with which they trained all the staff at the agency in the new procedures--within three months everyone was working the same way."

"We have a great relationship with OMD, as do the other agencies," Mr. Kaess adds. "Joe Uva is a big part of that. Perhaps because of his background [in TV sales] he sees us as his clients and he understands the need for a rapport between us. Having OMD go it alone in the U.S. has benefited us hugely in terms of the talent we've been able to attract, people like Kathy Brookbanks, Jill Botway and Joe himself, and also in terms of the investment we've been able to make in the planning tools, the specialist units and the training. The talent and tools have gotten better with no downside in terms of service."


The transformation was not without glitches. OMD failed its first big test last summer when it lost out on the global assignment for Gillette Co., which it handled in the North Atlantic region. "We first met to discuss how to pitch Gillette on Memorial Day weekend," says Mr. Uva. "We sat there for three days and realized we were in trouble. We still didn't know each other well enough, and there were still gaps in the offering. The client noticed in the first pitch. By the time the second pitch came around in August, they thought we had come a long way but still not far enough."

Nevertheless, Mr. Uva puts a positive spin on the Gillette debacle. "Just when we needed the impetus to really bring us together, we got it," he says. Not only did it galvanize the implementation of the Checkmate process and toolkits, but it prompted Omnicom to bring forward the timetable for the creation of a unified Latin American network, and a new Latin American chief executive, Mauricio Sabogal, was added to the global management team.

By the time the agency's next big tests arose--the battles to win the pan-European Sony Corp. account and Siemens global work--OMD was ready. "We had learned so much so quickly," says Mr. Uva. "Everything that went wrong in the Gillette pitch went right in the Siemens pitch. The time we'd spent together paid off in terms of our chemistry, and we had learned to devise the right strategy for the client, rather than the right strategy for OMD." OMD won both assignments.

Most scarily for OMD's rivals, the agency isn't finished yet. "We've drilled it into our people that they cannot rest on their laurels," says Mr. Uva. It is a sentiment echoed by Mr. Gottlieb, who comments, "we are a large part of the way there now, but we still need to drive toward more new ideas. The ideas fuel our success and the success of the clients, and I want that junior planner in Lithuania to know that he can make the difference."

Omnicom chief Mr. Wren says that he did not set out to match, but to better the other holding companies' global media offerings. The events of the last 18 months suggest he might just have done that. Those looking for a chink in the Omnicom armor had better start looking elsewhere than OMD.

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