WPP's Essence is Ad Age 2020 A-List Data and Analytics Agency of the Year
When Google wants help with artificial intelligence or machine learning, it often turns to Essence. That not only flies in the face of popular narratives in the marketing industry, it also points to why the WPP Group media shop is Ad Age’s Data and Analytics Agency of the Year.
For years, it’s been widely accepted that ad agencies can’t compete for talent against tech titans like Google. And in years past, under the regime of former WPP CEO Martin Sorrell, Google was dubbed a “frenemy.”
But the reality is that Essence has been attracting and retaining enough analytics talent that Google has been using it to fine-tune the AI engines behind its ad offerings for a decade. And as global digital media agency-of-record for Google, including the past five years since its acquisition by WPP and inclusion in GroupM, Essence has lived firmly on the friend side of frenemy. Not only is Essence devoted to making Google’s ad offerings work better, but it also gets preferred and early access to Google tech in part so it can spread the word and the capabilities to other clients.
It’s clearly not a bad position to be in. Essence revenue rose 12 percent last year to $390 million as growth accelerated after big changes in 2018, the company said. That was when the shop took on full-service media agency-of-record duties for NBCUniversal, Target and T-Mobile, doubling in size and integrating capabilities that previously had been custom-built around Google’s needs.
Last year brought more accounts and challenges, including the departures of Global CEO Christian Juhl and Chief Talent Officer Jennifer Remling to parent GroupM. Client wins continued, as Essence became media agency-of-record for L’Oréal in the U.K. and Ireland. Fifty-nine percent of its revenue growth came from new clients, Essence says.
Although 80 percent of Essence’s revenue comes from media—the rest is analytics, technology, licensing and creative services—data and analytics are its core. Essence was founded in 2005 by three data scientists, and about 20 percent of the organization is composed of engineers and technologists. “It’s been in our DNA,” says Kyoko Matsushita, global CEO. “From day one when I onboarded with Essence, I had to learn about Google. That spans across 15 years.”
Today, for a wider array of clients, Matsushita says, “We’ve used our expertise to work on ways in which all our clients could identify more opportunities and unlock revenue growth.”
For NBCUniversal, that included last year developing the campaign behind the launch of “Dirty John” on Bravo, a spinoff of the successful Los Angeles Times podcast of the same name. For that, Essence analyzed podcast listener data to identify a “dark drama audience” that would respond to suspenseful creative. The campaign helped “Dirty John” break records for Bravo; the show became the No. 2 new scripted series on cable in the 18-49 demo with 2.7 million viewers on average.
Target, because it runs a media business of its own, Roundel, in many ways thinks like a media company too, says Essence CEO-North America Jason Harrison. “Because we work with other publishers—Google and NBCUniversal—there’s some natural subject-matter alignment,” he says.
And for Google, Essence keeps feeding growth, which creates knowledge that can be applied to other clients.
An example is Project Pegasus, in which Essence customized Google’s AI tools in ways that outperformed Google’s algorithms to buy media more effectively. Pegasus involved doing context-driven ad buys programatically, directing hundreds of dynamic creative permutations to thousands of articles on publisher websites.
In a campaign for Google Home, Pegasus delivered 260 unique contextual ads for 608 articles to prove that contextual targeting could be as effective as behavioral targeting based on user data.
“This is likely to be the future of how we make decisions based on behavior and signals of intent,” Harrison says, because in the age of GDPR and other privacy safeguards, including Google Chrome’s own cookie-less future, “we won’t have the indicators of who’s who.”
Pegasus’ programmatic contextual matching started as a way of fine-tuning creative to content, Harrison says. But increasingly it will drive media buys, too. “And I think the broader marketplace will catch up to that,” he adds.
Being a Google agency has helped give Essence the tech savvy needed to function across thousands of remote offices, says Global Chief Operating Officer Steve Williams. As it was, Essence was already a widely distributed organization. Matsushita is based in San Francisco and Harrison in Minneapolis, while Williams and many other executives are based in New York.
“Our 2,150 people are incredibly well-prepared,” Williams says. “They work remotely a lot of the time.”