Initiative's big bet on performance marketing pays off with Nike, new clients

Nike’s global media review was one of the biggest planning and buying assignments awarded last year, and Interpublic Group of Cos.’ Initiative took home all of the business outside of North America. “That was a seminal moment,” Initiative Global CEO Dimitri Maex said. “Nike has always been at the top of our wish list.” See all of Ad Age's 2023 Agency A-List winners here Maex said Initiative has been operating around its “cultural velocity,” or the ability to use media to raise brand awareness in culture, since 2017, and based on that alone, Initiative and Nike were a perfect match. “Which brand moves through culture faster than Nike?” he said. Yet Nike was seeking more: an agency of record that would also be able to deliver on performance marketing. That caused Initiative “to reinvent ourselves,” said Maex. “We had to change our story a little bit and evolve it.” Reinventing the agency As a result, Initiative restructured itself around a new proposition: “Fame and flow.” What that means, Maex said, is making sure that brands stand out in culture (fame) while improving the consumer path to purchase (flow). It also reorganized around a new “Blue Stream” operational model in which the capabilities of performance and commerce shop Reprise and data hub Kinesso were integrated within the agency. Maex said the integration was somewhat seamless because of how well he knew the organizations; he was the global CEO of Reprise until he moved to Initiative last May. “We were able to show Nike that we can integrate these two parts of media and marketing; that they could find that under one roof,” Maex said. The changes not only won Initiative the sportswear titan's business outside of North America but also led to the agency taking the Amazon Web Services global performance marketing business from Dentsu’s Merkle. At the same time, the agency defended more than $1 billion in annual billings with major client reviews including Liberty Mutual, Merck and Teva Pharmaceuticals. Initiative did not lose a single client in 2022. Initiative went on to hit more than $1 billion in revenue last year, reporting between $1.1 billion to $1.2 billion in 2022 revenue. That's up from $850 million to $900 million the year before. Perhaps more than the wins, Maex said he was very proud of the agency’s ability to defend its accounts. “Our clients clearly want to stay with us, and that’s testament to the great relationships we have with them,” he said. Buy your ticket for the Ad Age A-List & Creativity Awards Gala here. Putting data to work All of the agency’s campaigns are backed by data and analytics unit Acxiom, which the agency said compiles consumer insights from 60% of the world’s adult population across more than 60 markets. It’s up to the Initiative team to uncover from all that data a sometimes a single insight that will drive an effective media plan. For example, for client Gilead Sciences, which markets HIV therapies and medications, Initiative was tasked with increasing HIV testing consideration among Black and Latino men who have sex with men in the southern U.S. but who avoid testing due to the stigma. The assignment was part of the marketer's promotional efforts last year for its HIV docuseries “Blind Angels.” The agency zeroed in on one key insight: Men who have sex with men in the South find comfort in shared experiences but are often too scared to share their own. Initiative set out to give these men a discreet safe space to share their stories through a custom eight-episode podcast, “In the Deep,” which had private access. It then further destigmatized the conversation by integrating the importance of HIV testing into mass programming including “All American: Homecoming,” a sports drama on Netflix. The campaign led to 30 million people tuning into “Blind Angels," along with 100 million impressions and nearly 500,000 downloads for “In the Deep,” with an impressive 75% completion rate. The campaign more importantly drove 48,000 sexual health visits and 8,000 HIV tests (which was twice the goal) among Gilead's target audience. For another client, Initiative focused on one key insight when it was tasked last year with igniting interest in adult sets for The Lego Group and turning around its historically flat sales. The discovery: Adults working from home in this new remote and hybrid environment are stressed out and need an outlet. The agency was able to identify a cohort of stressed-out adults working remotely and who are also podcast listeners. Tapping into the autonomous sensory meridian response (ASMR) trend, it targeted these adults with podcast ads that used the sound of clicking Lego bricks as a soothing mechanism and delivered these ads through a programmatic buy at the exact times they found these adults would be the most stressed or anxious during the day. The campaign also included an Alexa skill that reminded people to “clock off and click on” their Lego sets at the end of the workday. Initiative delivered for the client by increasing positive brand perception of Legos among adults 24% and drove 91.2% sales growth for adult sets. Helping clients through economic uncertainty Amid global economic uncertainty last year, Initiative also made a bigger effort to take care of its clients. It created playbooks for making their businesses recession-proof and also championed more pay-for-performance payment terms, meaning the agency is paid based on the revenue or metrics it delivers. Some agencies have been historically opposed to pay-for-performance plans as they risk not getting paid if external factors affect their ability to deliver certain goals. But Maex said he welcomes it. “I love pay-for-performance,” Maex said. “We have a handle on performance and what we are going to get back in terms of return; we have a lot of the data.” For example, when client Carnival Cruise Line resumed operations in the 2021-22 holiday season, the agency said the company couldn’t risk a multimillion-dollar media investment. Initiative took on the risk and pioneered a payment model in which it was paid only when cruises were booked. Maex said Initiative, in the most extreme case, is testing with one of its clients a model in which the agency will be compensated based on revenue growth. “Clients are more conservative than us when it comes to these things,” Maex said, explaining that the plan involves the client giving up some level of control to the agency and being comfortable with unpredictable pay terms. But with trust on both sides, Maex said he hopes the agency will be able to lean even more into pay-for-performance models in 2023. Making internal progress Winning business, defending clients and putting out effective work are all critical to the operations of a media agency, of course, but all of that also means happier employees, who really are the heart of the company, said Initiative U.S. President Stacy DeRiso. “Our success meant we were able to nurture and invest in our people,” DeRiso said. “Our people are happier than they’ve ever been, which is interesting when you think about the past couple of years. There’s a lot going on. The Great Resignation. Quiet Quitting. It was hard to attract talent in the big hiring boom. But our [net promoter] scores [to measure employee satisfaction] quadrupled what they were two years ago.” DeRiso said it all comes down to thinking about what matters to people. One program born out of that was “You + A Friend,” which invites people to apply for roles in pairs with their best friends. “We had an insight that one of the things we love in this industry are the connections we build,” DeRiso said. “We meet our best friends in this business. Why not hire them in pairs?” She added it was also a way to solve a “volume problem” as the agency had to staff up rapidly to service all the new business it won. DeRiso also highlighted a program in which Initiative allows its people to apply for a $1,000 grant that goes toward funding their “side hustles.” She said Initiative has given away more than 100 grants since launching it, funding businesses from hot sauce to organic perfume. Initiative also focused on improving diversity; DeRiso said 50% of all new hires last year were people of color. Globally, the agency is 65% female and 35% male. Among executives, the ratio is 49% female to 51% male. Since 2020, Initiative said BIPOC talent has grown by 18% in the U.S. “I’m compensated based on meeting certain diversity goals,” DeRiso said. “It’s not just something we talk about. We are held accountable to the numbers we have to meet. And I think that’s great.” See all the winners of Ad Age's 2023 A-List Awards here.

Initiative's big bet on performance marketing pays off with Nike, new clients

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