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State Of The Advertising Business Overall Industry For the past five years, the advertising industry has experienced a slower rate of growth due to the recession and its effects on consumers spending. However, the industry is expected to rise 4.3% in revenue within the year 2013. The result in this growth will cause marketing budgets to expand, prompting companies to begin investing in new advertising campaigns. Top Major Markets • United States • Japan • Western Europe
Top Emerging Markets • China • Latin America • India • Russia • Middle East
Developing and Emerging Markets Because of the recent economic recession, with a decrease in consumer spending, many advertising agencies were affected badly. Since the recession, many sellers of consumer goods have decided to spend more money on traditional media to boost industry revenue. Companies have also been expected to spend more on high-value campaigns. With rise of aging populations in the United States, there will also be an increase in demand for advertising agencies to promote healthcare and pharmaceuticals industries. Also, with rising living standards and disposable incomes in emerging economies such as China, India, Latin America and the Middle East, there will be a higher demand for consumer goods. This demand carries a possible increase of 1.6% annually in firms located in these regions. Consequently, large global advertising firms will have a major advantage in reaching these emerging markets compared to smaller firms. Also, firms with experience in expanding a client’s presence among emerging markets will have a stronger chance of winning new clients who are interested in expanding to these markets.
Technological Change The advances in technology have also changed the ways in which consumers access media. Because of this, advertising agencies with strong digital capabilities and excellent reputations, as innovators will be the most successful in achieving and maintaining new clients. However, over the next five years however, cable TV, Mobile and Internet advertising are forecasted to be the biggest winners because companies are now targeting specific demographics to match their products.
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Estimated advertising spending by media, 2012 Media Share of ad spending TV 40.4 Internet 19.6 Newspapers 17.9 Magazines 8.3 Radio 6.9 Outdoor 6.4 Cinema 0.5 The biggest challenge agencies will have when keeping up with the digital media environment will be utilizing mobile and social media tactics to reach out to consumers. It will be crucial for agencies to maintain a brand presence through social media platforms to retain their relevance towards clients. Due to the increase in digital media, print media, including newspapers, are expected to dramatically decline in revenue within the industry.
Best Products and Services
Personal Care Product Manufacturers Within the Global Advertising Agencies, the largest market is the manufacturing of personal care products, holding 26% of industry revenue. Key players in the sector include Proctor & Gamble Co., the largest advertiser in the world. For this segment, companies look for agencies that can develop ads and design packaging that is appealing to its consumers. These new ads and product designs are used to attract consumers that often buy personal care products on impulse. Automotive The Automotive industry is the second largest market within the advertising industry and has a total revenue of 18%. Many of the clients within this sector include General Motors Co., Toyota Motor Corp., Ford Motor Co. and Volkswagen. Within this market, most motor companies are looking to build brand awareness and increase exposure to their new products, prices and financing opportunities. Though
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this industry was significantly affected by the recession, it is now growing and, with the global economy improving, key players are increasing their advertising budgets.
Food And Drink The major manufacturers within the food and drink industry, such as Nestle and Coca-Cola, contribute to 15% of the advertising industry’s revenue. This market was one of the few that remained unaffected by the recession because of the relatively less expensive products offered by the industry. Entertainment, media and publishing The next largest market, holding roughly 12% of total industry revenue, is the entertainment, media and publishing segment. The largest entertainment companies within this sector are Time Warner and Walt Disney. Businesses in the entertainment segment use advertising to promote new movies or television shows.
The Big Guys
Omnicom Group Inc. Market Share 6.6% 5,000 Clients 100 Countries Omnicom Group Inc. is an advertising, marketing and corporate communications powerhouse, with holdings of more than 1,400 companies including advertising agencies; media services firms, specialty communication firms and public relations. The company operates through three global agency networks: BBDO Worldwide, DDB Worldwide and TBWA Worldwide. • BBDO works through 300 offices in 79 countries and creates commercial content. • DDB has 200 offices in over 90 countries and offers creative business solutions • TBWA operates through 270 offices in 77 countries.
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The company's global revenue increased 7.0% to $6.7 billion during the year, 45.3% of which was generated through traditional media advertising and agency related services. These trends have continued and were positively reinforced through the emerging recovery of the United States and greater moves by their clients towards pan-regional or global marketing strategies that cater to the multinational company's strength in its global reach. As such, Omnicom's global revenue from traditional media advertising is expected to increase 4.7% annually on average to $7.2 billion in the five years to 2013. The company's return to growth has also caused it to increase employee headcount once again. WPP Group PLC Market Share 6.6% 107 Countries 2,400 Offices WPP Group is a global communications service that offers national, multinational and global clients a range of advertising and marketing services. WPP organizes its business through four different segments, advertising and media investment management; consumer insights; branding and identity, healthcare and specialist communication; and public relation and public affairs. These divisions are offered within a range of international and specialist agencies including Grey, JWT, Ogilvy & Mather, United Network and Y&R. WPP's global advertising revenue is expected to grow at an annual rate of 3.0% to $7.2 billion in the five years to 2013. The company's growth has mostly followed industry trends, with growth largely coming from new marketing technologies and emerging markets, including Asia and Latin America. In 2011, WPP's advertising segment led revenue and profit to increase, building on growth from the year prior. Digital revenue growth particularly helped during 2011, when North American operations gained momentum as the economy continued to recover. Consequently, the segment grew 15.5% during 2011, in spite of ongoing troubles in Europe. Digital advertising, coupled with rising demand from emerging markets, has helped boost WPP's revenue. The company acquired a 51% stake in Dawson Integrated Marketing Communications in China in 2007. In 2009, it announced plans to purchase a majority stake in interaction, a digital agency based in Thailand. Even though the company has grown, it still experienced the negative effects of the global recession.
Picking An Agency 1. Don’t hire an agency. Hire a culture. Clients look for the culture of an agency when determining which one to pick. It is important for them to consider the core values and what type of relationship that they could develop with them. They look at the environment of the office to see the energy and culture it has in the hallways. They favor agencies that are collaborative, innovative and proactive. 2. Talent rules.
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Clients want agencies that have a great deal of talent, are brave when making decisions, culturally diverse and committed to self-expression. The clients want to find out if the employees of the agency are ambitious, inspired and moreforward thinking. Finally they base their decision on how the agency hires, promotes and rewards its employees. 3. Pre-set expectations. Clients determine what type of agency they want before looking for a new one. They consider which characteristics would collaborate best with their team. 4. Why you want them. Clients also spend time looking into why the agency wants them, They want to determine if the agency will be passionate about their products or if the agency is looking for their own gain. They will also look at the agencies successes and failures. Clients believe that failures reveal the true characteristics of an agency and how it handles adversity. 5. Don’t choose by reputation alone. Though agency reputations are important to clients, what are more important are the people that will be working with them. These people’s dedication and passion will be the deciding factors to how successful the product will be. 6. Don't choose by price alone. Clients are looking for a low price, but not necessarily the cheapest. Clients realize that if they get the cheapest price, they may miss out on the top talent of an agency. They are looking to hire the agency based on the quality of their work. 7. Have the right perspective. Clients do not just hire an agency based on its history, they hire based on the agencies future and vision. Clients look at how the agency reacts to important consumer trends and how well the agency uses and understands technology such as social media.
Success Stories/Agency Promotion Grey Known for its skill in account-management, the WPP-owned agency is an established agency that has gained the reputation of being conservative and averse to risk taking. However, it has undergone a transformation in the recent years. Global CEO Jim Heekin and Tor Myhren have led the agency towards a creative trajectory, providing creative work such as the E-Trade Baby and the Sea Food Differently campaign for Red Lobster. Because Heekin has allowed the agency to shift its focus from purely accounts and financial reports to creative efforts, the flexibility has allowed Grey to develop innovative and creative ideas, consequently attracting new clients and bringing back former clients, such as Pfizer. Out of 23 new-business pitches, Grey won 21, worth $450 million. Grey was ranked #3 in Agency of the Year in 2013, after 72andSunny and 360i.
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Saatchi and Saatchi: After being released from the poor management of the Saatchi brothers, Saatchi and Saatchi faced hardships within the industry, failing to attract clients and unable to win against the competition. When Kevin Roberts, CEO of Saatchi and Saatchi, invented the agency philosophy of Lovemarks in 2004, the brand image of the agency drastically improved, prompting clients to partner with the agency once more, including a $430 million contract with JC Penney. McCann Melbourne One of the best and most awarded campaigns of the year was ‘Dumb Ways to Die’ created by McCann for Metro Trains. This campaign won five Grand Prixes at the Cannes Lions International Festival of Creativity. The success of this campaign was caused by many different factors that McCann leveraged to their advantage. The ‘Dumb Ways to Die’ campaign was based on a creative, goofy story based on the need to increase awareness of safety around railways. The story was developed using fun characters in a series of videos, a music video, and interactive elements. Listed below is a break down of the reasons behind their success. Strong Client The metro clients were extremely open-minded to having an entertaining campaign rather than the typical gloom-and-doom public service ad. This allowed the agency to think outside the box and create something that attracted viewers instead of repelling them. Shareable The main reason as to why this campaign was extremely shareable was because the film featured adorable characters with a catchy tune that viewers could relate to. McCann created different storylines featuring each of the characters as well as a karaoke version, which kept viewers engaged. Even though the video went viral within the first day itself, it continued to be shared and discussed for the next ten months.
Have A Story to Tell McCann used the lyrics of the song and the goofy characters to create a storyline that they were able to base the key concepts of Metro safety around. Longevity Even though the campaign was already extremely sharable, McCann decided to launch an app version of the campaign, which extended the longevity of it after the videos began to die out. Since it’s release it became the number 2 free app and has been downloaded eighteen million times. Interactive
What was different about this campaign was that it was not only a video but it also had print and interactive elements. The agency designed bold posters and displays that were the source for Instagram images and social media.
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Viewers of the displays could take photographs of themselves with the campaign characters and press a button to take a pledge to be more cautious around trains. Teaching Tool The campaign was then transformed into a children’s book as a teaching tools for kids. This extended the message to reach classrooms not just in Australia but also around the world. Results The campaign earned $60 million in media impression and reached 46% of their target audience in one month. It also generated over a million pledges from viewers to be safer around trains. There has also been a 20% decrease in rail-related accidents.
Besides decreasing rail-related incidents, the campaign also had a positive effect on the McCann Melbourne agency. This past year, McCann was the most awarded creative agency because of the performance of ‘Dumb Ways to Die’, which won a number of best of show wins including five Cannes Lions Grand Prix. The campaign itself was the most awarded campaign of the year earning top honors at Cannes, One Show and D&AD for its creative and digital elements; it also won in unexpected categories like Radio and PR. From this campaign, McCann was also able to claim honors of the Most Awarded Creative Director (Pat Baron), Most Awarded Copywriter (John Mescall) and the Most Awarded Art Director (Julian Frost). Being one of the top awarded agencies of the year is extremely beneficial, especially when looking for new clients. Over the past 12 months, the agency’s digital revenue has increased by 117% as it won projects from Google, Opel, Love NZ, and the Federal and Victorian Governments.
Key Success Factors 1. Having a diverse range of clients A range of clients in different market sectors will minimize revenue volatility. 2. Ability to vary services to suit different needs A wide stylistic range will attract a greater number of clients with diverse aesthetic and practical needs. 3. Degree of globalization in the firm Large companies demand brand consistency and often choose to use firms that have international reach. 4. Membership of an industry organization Membership of a national or international organization indicates professionalism in operations and reassures a client that the firm abides by an industry code of conduct.
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5. Having a good reputation To attract potential clients, a good reputation is generally supported by references from current customers and a portfolio of previous work. 6. Having an effective performance monitoring system: A performance monitoring system ensures that a firm can show clients the results of their expenditure and the direct outcomes of a particular campaign.
Agency Positioning Smartest Agency Goodby Silverstein and Partners Highly Creative Agencies Crispin Porter and Bogusky Droga5 BBH Wieden and Kennedy Most award winning and large agency BBDO Vulnerable BBDO Grey Y&R GSD&M Untouchable Wieden and Kennedy Droga5 Crispin Porter and Bogusky Butler Shine Stern & Partners DDB’s Competition BBDO, Grey, Ogilvy, McGarryBowen, McCann Erickson BBDO is the only agency that beat DDB as the most awarded agency network, ranking #1 (Gunn Report, 2012). BBDO has won this position for seven consecutive years. David Lubars, BBDO’s Chief Creative Officer and North America Chairman, was awarded the #1 ranking among creative leaders across the world. BBDO is strongly associated as one of the original large creative agencies, a position DDB is situated in as well.
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State of Our Agency Today History DDB was founded by Doyle, Dale, and Bernbach. Bill Bernbach, formerly the Creative Director at Grey Advertising, was a seminal figure in the advertising industry at large, influencing the industry with his attitudes and ideas about advertising. Bernbach ushered the ‘creative revolution’, setting a path of creativity that DDB has been inspired by. In 1986, Omnicom emerged from the merging of DDB, Needham Harper, and BBDO. At a Glance: DDB’s Most Famous Campaigns Volkswagen: Think Small, The Bug, Lemon Avis: We Try Harder Budweiser: Clydesdales, Wassup, Real Men of Genius
Product Quality DDB has been known for its strong creative presence. DDB, an integrated full service agency, offers services in both digital and traditional advertising, and approaches advertising with a focus on human insight. A review of its current advertising points to DDB’s advertising often as memorable and cleverly witty. Today, its commercials for Volkswagen, Skittles, Cialis, and the New York Lottery demonstrate the contemporary humor that resonates with the target market. Other commercials, for McDonald’s, John Lewis, and SAS Airlines speak to consumers in a more poignant manner, capturing the classic themes of special parent-child bonds (McDonald’s and SAS Airlines) and endeavors in courtship and love (John Lewis). NY City Ballet – September 11 DDB gained strong positive acclaim for its poetic and sensitive video homage “New Beginnings” for the New York City Ballet. The video highlighted the resilience of New York City post-9/11, focusing on the positive rebirth of the city and its ability to overcome hardships. McDonald’s In response to the poor publicity brought about by the Anti-McDonald’s rhetoric (regarding the detrimental nutritional quality of its food), DDB formulated the idea of being completely transparent about McDonald’s ingredients. In its campaign, McDonalds answered 20,000 questions posed by people across the country, garnering much social media following.
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Glad Tent Bags DDB approached the Glad consumer with an environmental focus, taking advantage of the growing trend of environmentalism. By creating the idea of transforming the trash bags into tents that could be used on campgrounds, DDB used an innovative solution to attract many followers at the SXSW convention. VolkswagenSuite DDB engineered the idea of a VolkswagenSuite, providing Volkswagen drivers free access to VolkswagenSuites (strategically set rooms in route hotels in locations across the country) with just their car key. The agency’s idea not only promoted safe driving by inviting drivers to rest at the suite while on long journeys, it seamless integrated the branding of the car into every aspect of the room itself.
Pressure from Existing Accounts McDonald’s is a crucial account for DDB. McDonald’s objective has been to increase sales across the U.S., and is looking to DDB and Leo Burnett, its main agencies, to increase the quality of the advertising so as to better reach the American market. Staff from McDonald’s have been reported saying, "We believe that some of the creative [national TV ads] that have aired in recent quarters in the U.S. have not resonated as well with McDonald's customer base as the company would like to see… We would also not rule out the possibility of adagency changes at some point.” This places a significant pressure on DDB to improve the quality of its advertising for McDonald’s in the United States.
Current Problem There is a growing distinction between DDB USA and DDB Worldwide. While DDB has been doing remarkably well outside of the US, the state of the agency and its work within the U.S. has come to a standstill.
Awards Cannes Within DDB USA, only DDB New York has won awards at the Cannes this year, signaling the poor record for DDB USA recently. DDB Worldwide however has been ranked among the top three networks at Cannes in 2013, bringing home a record 93 Lions and 205 Shortlists from 44 offices across the globe. Top honors received include the Mobile Grand Prix, 11 Gold Lions, two Creative Effectiveness awards and 30 Silver Lions. In fact, DDB has termed this year as winning the “Most Lions in DDB’s History at Cannes”
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Hashtag Killer/Water Is Life (Digital) - Silver World Medal and Bronze Lion DDB New York The Long Wait/John Lewis (Creative Effectiveness) - Creative Effectiveness Lion - Adam&Eve DDB London Believe/Steinlager (Creative Effectiveness) - Creative Effectiveness Lion DDB New Zealand Our Food. Your Questions/McDonald’s Canada (Websites) - Gold Lion DDB Canada Faile, Art Series/NYCB (Design) in Exhibitions and Live Entertainment. Silver Lion - DDB New York Ignite, Heineken (Design in Exhibitions and Live Entertainment) - Silver Lion - DDB Amsterdam My Third Eye/Starhub Singapore (Mobile Marketing) - Gold Lion - DDB Singapore Facebook 1914/Musee De la Grande (Social Media and Viral) - Silver Lion DDB Paris Coin Hunters/McDonalds (Digital) - Silver Lion Campaign - DDB Denmark Webby Awards DDB and Tribal Worldwide won 12 awards, with Tribal taking home “Agency of the Year” honors. This marks the second consecutive year that DDB and Tribal have been recognized as the most awarded agency group at the show. Clio Awards DDB won 37 awards across 12 media, including Hall of Fame honors in both Film and Print for Volkswagen.
The DDB Lifestyle Study The DDB Needham Life Style Study first began in 1975, and is an annual survey that is mailed to households across the country to gather an understanding of the American population’s behaviors, interests and attitudes. The results of the study are released, providing valuable insights into contemporary American culture. Recent reports have included reports on millennial behavior and trends of
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environmentalism and stay at home fathers.
New Ways to Advertise “Much of what we do now has to do with creating environments, as opposed to creating ads. If you look at a website as opposed to a banner ad, it’s all about bringing people into an environment.” – Mark O’Brien
New Business Vitality One of DDB’s main problems is the state of their new business acquisitions. The offices within the US have been struggling to win new business, and have at the same time suffered major losses over the last few years. Beginning in 2006, JCPenney, Dell and Home Depot left DDB. DDB also lost H&R Block, Midas, AT&T, Budweiser, and State Farm. Although State Farm has now returned to DDB from Draftfcb, the loss of Anheuser-Busch brands Budweiser and Bud Lite pose as a severe setback to the agency. Some of DDB’s most iconic work in the recent decades has been for Anheuser-Busch (Budweiser Clydesdales horses, Wassup, and Spuds McKenzie). Paul Guinness, former CEO of DDB-Chicago, claimed that the acquisition of Mars, Wrigley (Skittles, Starburst, and Milky Way) and Safeway would “compensate for the loss of Bud Light.” Furthermore, the new business would allow him to hire 15 - 20 more people. Nevertheless, this certainly does not make up for the loss of Anheuser-Busch. DDB Chicago’s biggest clients are McDonald’s, State Farm Insurance, and Capital One. In an interview this year, Peter McGuinness also announced his agency’s drive for new business, “This year, DDB is pitching hard for new business, going after everything from electronics retailer H.H. Gregg to Bulleit Bourbon. DDB is also a finalist for General Motors' Cadillac account. The luxury car company spent $244 million on advertising last year, according to Kantar.” The DDB-LA office is currently working on Wells-Fargo only, so it is trying to reach out to more. DDB California is currently working on Clorox, Wells Fargo, ConAgra, Qualcomm, and more.
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New Business Reebok: Reebok first started working with DDB in 2009, but then left the agency for McGarryBowen. Now, Reebok has once again appointed DDB as the official lead creative agency for the brand, which will begin Spring 2014. Novartis DDB Remedy (a health subsidiary of DDB) has won the pharmaceutical company Novartis business. “Project Cool” will be executed across the U.S., Europe, and Asia. Hestbaek Consult handled the pitch.
Our Agency in the News News about DDB North America is roughly divided into two parts: awards and buzz for the creative work done by the agency and the continual changing of management within the agency. Alma DDB (DDB’s Hispanic marketing arm) has been awarded two Mosaic awards for redesigning the Tobacco Free Florida website and for the social media campaign for State Farm’s Fan Pass. In the Wall Street Journal, Mark O’Brien, President of DDB North America, was interviewed for a piece on the viral sensation of the low-budget SyFy movie ‘Sharknado’, and the value of advertising on Twitter. Although the article is not about the DDB itself, O’Brien talks about the value of word-of-mouth advertising and is mentioned as “an early proponent of interactive platforms at the firm.” Findings from DDB Life Style Study 2013 have also been published in news publications such as the WSJ – reporting on the lifestyle differences of stay-athome-dads vs. other dads and stay-at-home-moms. The study also covers information on Millennials and attitudes towards environmentalism as compared to Baby Boomers, for example.
Staff Quality Chuck Brymer - Chief Executive Officer of DDB Worldwide Keith Bremer - Chief Financial Officer of DDB Worldwide Amir Kassaei: Chief Creative Officer of DDB Worldwide Joe Rigger - Director, Management Information Systems Judd Saviskas - Director, Human Resources
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Management Among management, there appears to be a high turnover rate, especially among top-level management. As the agency, across the board, struggles to attract new clients, each entrant into management is charged with a variation of the same goal. Chuck Brymer Brymer began his career in advertising in 1982 with BBDO in Houston, Texas as an account manager. In April of 2006 Brymer began working at DDB as the President and CEO of the agency. He was responsible for overseeing 206 offices in 96 countries and is known for provided creative business solutions to clients through various innovative media platforms. Previous to working at DDB Brymer was the head of Interbrand Group, which at the time was the world’s largest branding and design consultation service. Within this company Brymer was responsible for the strategic development of the company and managed other companies within InterBrand such as Design Forum and BrandWizard. Mark O’Brien O’Brien is the President of DDB North America, has been in his position since 2010, although he has been working with DDB since 1994. He is responsible for having established Tribal DDB (a digital subsidiary of DDB), and has established a key presence for DDB in Asia Pacific. California The CEO of DDB California, Mike Harris, is also relatively new, assuming the role in 2012. The California branch also brought in a new Chief Creative Officer from Deutsch LA in June 2013, after Lisa Bennett left the role to become EVP of Creative for DDB North America. While he does not have prior experience as a CCO, Elm is known for bringing in new business at Deutsch, which is strongly desirable for the agency.’ New York Peter Hempel, CEO and President of DDB New York, is known for successfully building brands across a diversity of industries, with experience ranging from pharmaceuticals, packaged goods, to financial services.
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Chicago DDB-Chicago, one of the most crucial offices for DDB North America, has faced a heavy turnover rate for top-level management. Rick Carpenter served as CEO until December 2010 until Paul McGuinness replaced him in July 2011. During the gap in time, DDB North America President Mark O’Brien served as interimCEO. McGuiness’ company goal was to broaden the client base and attract new accounts. Now once again, DDB-Chicago has a new CEO as Paul McGuinness leaves to work on the client-side for Chobani. Paul Gunning has stepped in with the same sight of revitalizing the agency. Having been DDB Worldwide’s chief digital officer for 13 years, Paul Gunning will be applying his digital insight to the creative drive behind the agency. He claims, "If I can successfully blend the best of what I've been doing from a digital perspective to the best of what's been happening here in the traditional sense, I think we've got an award-winning combination that's really going to separate us from the competition, and hopefully drive a ton of value for the clients.” DDB-Chicago’s Chief Creative Officer position is also crucial to the success of the agency. Ewan Paterson, DDB-Chicago’s CCO since 2010, has been considered an essential part of the agency. His departing from the agency places key accounts such as McDonalds in a precarious position, although the agency maintains that all accounts will remain stable and unaffected by the change in agency staffing. Catalyst Catalyst is DDB’s training program that provides employees the opportunity to improve upon skills and build upon their careers within DDB. The program could be better integrated into the agency, since sources from within the agency say that employees do not have new media training, and are therefore still “stuck in the old times.”
Staff Morale Due to the loss in clients, the staff morale has certainly dipped. Although some DDB employees feel that DDB has a small agency family feel to it, and that the employees have great working-chemistry, the majorities are dissatisfied. The overarching theme that employees have identified is the disconnect between employees and upper management. Communication from management appears to be poor, and employees feel that the leadership is not taking an active role in advancing the agency. Many employees feel as though there is no room for internal advancement within the
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agency, especially because of the corporate bureaucracy and DDB’s restrictions by its holding company, Omnicom. The staff desires better compensation, more training opportunities, and more challenges to improve the quality of work. They also believe that DDB could make more of an effort in improving its position in digital advertising, rather than only concentrating on traditional advertising. Employees also believe that the overall corporate culture needs to be strengthened and communicated to all levels of the agency. It is very important to keep the creative team happy: Justin Reardon, the creative behind Budweiser’s ‘Wassup’ campaign, was merely rewarded by DDB with a $250 bonus check and a baseball bat that said ‘way to go, slugger’ (Business Insider). Reardon left as soon as his contract ran out. Physical Space In an interview with Paul McGuinness, he comments on how physical space and structure affected the work environment within DDB, “We were not sharing ideas, we were not cross-pollinating, we weren't collaborating.” McGuinness explains that the office space in Chicago has recently undergone a transformation, explaining the effects this should have on the agency, “mashing up all the accounts, mashing up all the departments, and collaboration happens and combustion can happen, and ideas and sparks can fly." Reputation in the Industry DDB is regarded as an old agency that needs to enter the modern, digitalfocused era. DDB in the US is also viewed as losing its creative edge and a “slow to change agency.” An employee review of DDB reveals the following observation: “Time to join the 21st century and really put your work where your words are - time to show that DDB isn't the dinosaur that it is a perceived as in the industry and can do some good work.” Financial Stability/Independence According to Business Insights, DDB has gross billings of $5.5 billion, and its average sales per employee are $685,002, with 8,048 employees total. With DDB’s focus on client spending across traditional and digital media, McGuinness reports that it has allowed the agency to experience a 12% growth in revenue, and 20% growth in profit. Only 20% of the growth came from new business, however. The loss of Anheuser-Busch (Bud Light and Budweiser) has affected the agency in terms of morale and finances, as it once accounted to 10 – 20% of total agency billings. The JCPenney account was worth $430 million, which DDB had
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as a client for six years. McDonald’s and State Farm Insurance are some of DDB’s most important clients. McDonald’s spent $888.1 million in the U.S. in 2010, and State Farm spent $510 million. Importantly, the clients have both increased ad spending by 10%.
Weaknesses Strengths • Bernbach as founder: powerful legacy and brand • Large network • Powerful campaign history with iconic commercials: Lemon, We Try Harder, Clydesdales, and Wassup
• Too large • Unstable management - people are constantly leaving • Weak awards record for the US • Extremely low new business record • Has lost key accounts in major industries • Bob Scarpelli, responsible for nurturing and growing the DDB brand, retires • Low employee morale • Agency not in possession of cutting edge new media and digital skills
Opportunities
Threats
• Rise in user-interface design demand among consumers: DDB can apply creative talent • Innovative thinking in new media • Pharmaceuticals present a profitable opportunity
• Niche Agencies specializing in Digital are better equipped to serve new media needs
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The Agency We Want To Be Core Agency Equity/Positioning DDB will be the most effective creative in new media. It will approach each issue with strong creative strategy that uniquely suits the changing technologies and digital era of advertising.
Product Quality DDB will stand out for the work it does in the digital sphere. The Water Is Life: Hashtag Killer campaign will set the standard for the quality of innovative thinking and new media creativity that DDB will meet in its future work. Other innovative campaigns, such as the Volkswagen Suite from DDB Argentina, and the Heineken Ignite from Tribal DDB in Amsterdam, will set the standard for creative insight and solutions to problems facing consumers. In November 2013, BBDO and Publicis has successfully accomplished the most effective full service campaign. DDB will overtake this position, and prove its consistency with clients for being the most effective full service agency as it is merited by the IPA and Effie awards. DDB Worldwide has been renowned for having the most effective advertising campaigns. Winning these awards will display to clients that DDB has the best creative strategies and proprietary approach to effective advertising.
New Business Vitality We will gain new business in alcohol, financial, pharmaceutical, automotive, and technology industries, including the regaining of Anheuser-Busch.
Our Agency in the News Majority of agency news is about staffing turnover and new changes in management. We want to be in the news for cutting edge ideas, campaigns, and most importantly, new account wins.
Staff Quality It is vital for DDB USA to have a strong and stable management force at the top. DDB Chicago has faced four leadership changes at the CEO level within the last eight years alone. In order for the agency to operate successfully, a singular vision and objective must be conveyed to all respective parts, with a united management team to oversee that long-term goals are met. With Ewan Paterson’s departure as CCO from DDB-Chicago, it is essential for the agency to hire an extremely competitive CCO to fill the position. All DDB staff will have up to date expertise on current and relevant technology, with a diverse range of
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experiences.
DDB will have a strong team of design and user-interface experts, including engineers, who will lead DDB in creative design and strategy. With user-centered design and interfacing a strong necessity in marketing today, DDB’s human talent will prove strategic and advantageous.
Staff Morale Employees will be proud to work at DDB. It will rank among the best agencies to work for. The management will foster an open network of communication and will be actively involved at each level of the agency. Although the agency will remain vertically structured in terms of organization, employees will have an active role in decisionmaking for the agency. A diverse array of clients and a steady stream of new business will create a challenging and positive environment for staff to work in. Employees will have a chance to develop their careers at DDB, and they will feel inspired to place their work into DDB and aspire to be leaders in the agency.
Reputation in the industry DDB US will be synonymous for out-of-the-box creative in new media. Its campaigns will consistently be discussed in not only trade and industry publications, but also in the New York Times and Wall Street Journal. The agency once enjoyed the fruits of Bernbach and his pioneering work in advertising. Now, the agency will carry forward the legacy of Bernbach into the new frontier of advertising. DDB is to the new advertising landscape what Bernbach was to his era: the pioneers of the creative revolution.
Financial Stability/Independence DDB will achieve a level of semi-autonomy from Omnicom in terms of fiscal and management decisions. DDB will establish the level of independence at which point it can selectively decide the clients it can take, and whom it will not. DDB will have the independence to take creative risks with clients in order to enjoy greater possible returns for both the client and agency.
What will it be like to work at DDB? Although DDB is extended across the country and the globe, the agency will forge strong roots and communication across all branches, ensuring a small-agency feel while providing the benefits of a large agency. Employees will have the opportunity to rotate at different locations across the world if they would like to live abroad. The flexibility of the agency will also allow employees to explore different specialties, with Catalyst ready to assist them. Lastly, employees will be united under the singular pride of consistently being recognized for creative work in new media with the most exciting and high profile clients. The work environment will be a fun, family-oriented, youthful agency that promises to deliver success and growth for its employees.
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Agency Revitalization Plan Global Hierarchal Structure Because DDB US needs a stable management force, the CEOs for DDB-New York, Chicago, and California will remain as is. While the agency will retain its vertical management structure, the DDB US team will operate as a more cohesive unit under the leadership of the new DDB CEO. Since DDB is proving strong in parts of the world outside of the US, it would be best to bring in fresh international talent to help steer DDB in the US towards the same success.
People Nigel Jones (now Chief Strategy Officer worldwide for DraftFCB) began his career at BMP DDB in 1994. At that time, the agency introduced numerical measurements for measuring ad effectiveness and econometrics. It is crucial to bring Nigel Jones back to DDB so that he can apply his leadership expertise and background in strategy and effectiveness to the agency.
Evaluation Branch CEO’s will be responsible for implementing a uniform system of evaluation that will be used across the offices at DDB North America. Team Effectiveness. After each campaign, every team will be asked to fill out a feedback form rating the experience of working with their fellow team members. Upon review, HR will take note of any serious gaps in communication or working styles. Teams will be given the opportunity to provide a formal critique of the way the campaign was carried out: as such, all opinions and suggestions will be taken into consideration. This ensures that changes are made within the work environment as soon as possible, to ensure the best product output. Advertising. Every fiscal quarter, the Chief Creative Officers, Chief Strategy Officers, and Chief Executive Officers will convene to provide an open critique on the quality of the agency’s advertising, across the regional offices. The exchange of ideas and collaboration, along with the feedback provided from the teams working on the campaigns, will allow for changes to be made for future campaigns. Management. In order for employees to experience an open channel of communication, each employee has the opportunity to submit a random evaluation of any member of the management, whenever they woud like. Submissions will be reviewed on a monthly basis. Client Satisfaction. The CEO and CAO of each branch must have a face-to-face meeting with the client, for the singular purpose of determining whether the client
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 service experience was positive, and how it could be improved.
Hiring DDB will concentrate on hiring young professionals. Hiring emphasis will be placed upon hiring digital and new media experts; design and user-interface experts; brilliant creatives who have proven excellence at other agencies, as well as fresh young talent from diverse backgrounds. With the help of evaluations, project managers, and human resources, management will identify employees who are unwilling to take advantage of Catalyst to further their talents, or are consistently failing to improve upon their results, will be released from employment at DDB.
Training & Future Evaluation/Goal Setting The Catalyst training program will be seamlessly integrated into the everyday workings of the agency. Employees, regardless of how long they have been working, will be required to be enrolled in some form of training class at Catalyst. This will not only ensure a workforce that is continually updated with new methods and technologies, but will uphold the culture of learning and self-betterment that is within the agency culture. The rule will apply to every member of the agency, all the way to the level of CEO of North America. Employees will be required to set personal work goals for themselves for each year, and Catalyst will work with employees to help them achieve these goals.
Goals for DDB Win first ranking at the Cannes Beat the competitors at the Cannes, One Show, and D&AD Win the most effective awards/ Be known in the industry as the most effective agency in translating ads into client success. Gain recognition for creative work. Develop and Improve the Client-Agency relationship: improve the quality of communication between DDB and the client. Be responsive to the client’s needs.
Rewarding/ Retention The rewards system will be based on improvement. Employees will be required to improve upon their personal record, so that they are consistently striving for improvement. The evaluation system will also play a role in determining who will get rewarded. Rewards will be commensurate with the degree of improvement or success brought to the agency. There will also be milestone awards to reward those who stay at DDB for extended amounts of time
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Product Opportunities The liquor and spirits, automotive, finance, and technology industries present opportunities to DDB that can take advantage of. In line with DDB’s aim to position itself as innovative creative in new media, DDB will leverage the huge consumer demand to its advantage by launching creative media in experiential, live exhibitions, and digital campaigns that will engage the consumers. Maintenance DDB will retain key clients such as McDonald’s, State Farm Insurance, Pfizer and Merck, and Unilever. Elimination DDB’s current accounts are valuable and are an asset to the agency; DDB must not eliminate them; however, it must work to attract new clients from the key industries mentioned. Awards/Recognition DDB Worldwide is already enjoying a good reputation in the awards networks; however, by changing the agency functioning, DDB USA will be in a position to produce quality creative work that will allow them to win more awards at the Cannes, Webbys, IPA, and One Shows. Areas of Expertise/ Proprietary Philosophy and Systems The DDB Lifestyle Study, and the annual results from this study, represent the agency’s commitment to uncovering human insights and understanding human behavior. The Life Style Study will be positioned as a core pillar of DDB, and the motivations in pursuing this study each year will serve both as DDB’s proprietary philosophy and area of expertise. PR DDB will improve upon its social media communications, including fast response times on Facebook and Twitter, and will improve the user experience of owned media, specifically the website. The pro-bono work that DDB does with the Partnership for Drug Free America always serves as good PR for the agency. DDB has garnered positive publicity for the work done for social causes, such as as the Water is Life campaign, and its commitment to the American public in its 9/11 tributes for both NYCB and Budweiser.
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Client Relationships Evaluation Strong talent, open communication with the client, provide insights from proprietary research for client benefit, ensuring efficiencies to offer client best deal - don’t waste client’s money.
Growth in Business Objectively, DDB will target new business from: Health and Pharmaceutical, Automotive,Spirits, and digital/tech companies. DDB will create a two part focus to expand new business development by integrating campaigns in the asian market and accounts for the industries listed above.Since Asia is the fastest growing market in the country. With 13.1 million strong, this segment is evolving at a rate of 9% and has the second largest market for average household size at 3.5 Households average 52K > on average a year with only a minute 10% of the market that are impoverished. This market is made of 6 groups: Chinese American, Filipino American, Asian Indian American, Vietnamese American, Korean American, and Japanese American.. Altogether this demo really embraces the high life of luxury with major interests in technological appliances, automobiles, Television, and cameras to name a few. This creates a great opportunity for the digital clients we hope to attain as well automotive (yahoo business). Already DDB has began to extract the benefits this highly potent market by winning its’ first Grand Prix award in the mobile category in the Philippines for innovating “smart textbook sim cards” (O'brien, Adforum) DDB is glad to be one of the first to tap into this market as the world is forced to recognize the creative revolution spawning in the Asian markets. Being first to maximize the opportunities for a growing trend like the Asian markets will differentiate DDB from other agencies by exploiting the values of a profitable untapped market. Health and Pharmaceutical Opportunities With almost a third of DDB’s client base being made of the health and pharmaceuticals segment, it is clear that DDB can be considered an expert for properly applying the most efficient campaign strategies toward targeted consumers. Not only do they make up a third of their clients, they also rank as the tier 10 companies in the world for their sector. Having this sweet spot puts DDB at an advantage to really dominate this industry. By strategically persuading existing clients to recommend our services to their suppliers or distributors we can further expand control of clients in the industry. Additionally, persuading clients to reach out to other companies in alliance will help promote growth for DDB’s new business development. Knowing this, Companies like Wyeth, Roche, and Glaxosmithkline would be prime candidates for new business and further expand our dominance as the leading market share for health and pharmaceutical clients. Wyeth is the fourth largest, manufacturing 13 drugs. Roche is seventh, manufacturing 11 drugs. Lastly Glaxosmithkline is ninth, manufacturing 9 drugs. Each company is valued at roughly $20 billion plus annually, which is in close proximity the client value of our current healthcare and pharmaceutical clients such as Johnson and Johnson, Merck,
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and Nortvarius to name a select and the best few. Automotive After losing Volkswagen, DDB will look to corner Daimler AG (Mercedes Benz) and Toyota. Our success stories for positioning a German Volkswagen car in the US. should allure trust and enough interest from Daimler AG as a fellow German automotive manufacturer as well. Already DDB has looked to replace Volkswagen with its new client BMW, which can be a great lead into Daimler AG in future by creating a rewarding campaign for BMW. Additionally, Toyota has expressed a search for new direction with their automotive positioning. In the past year alone, they hired 6 different agencies to pitch a tagline for their new campaign “Let’s go places” (business insider). Knowing that the Asian market is growing exponentially, this would be a key win for DDB and opportune them with a client who has a large advertising budget. Spirits With a detrimental loss of Budweiser, DDB looks to raise the bar a notch higher to attain the best selling beer in the world, Snow beer. Snow beer sales 50 million barrels of beer a year and is has double the notoriety as bud light. It would yet again prove to be another vital opportunity to tap into a highly valuable Asian Market and potentially brand an American version of the beer as well. Additionally, Asahi beer would be another great potential client to add to the Asian Market portfolio as it ranks 10th overall in beer sales. Of this same ranking Budweiser ranked second, saling 45 million barrels annually, which proves both Snow Beer and Asahi to be avid replacements for the Budweiser account lost. Technology Ideally big data is on the cusp of breaking new barriers for both consumers and clients alike. With this is in mind, DDB envisions Bing as the perfect potential candidate for new business. The brand is fairly new and has only 30 % of market share. If we can make them increase share to compete with Google we should be in great position to build new digital leads.
DDB’S Win Rate In 2012 DDB won 27 out of its 36 clients making additional 38% revenue for new business (Agency of the year). Their efforts averaged a 75% win rate. However, due to major account loses such as Wrigleys, Clydesdale, and A-B, the company is losing merit with creative clients. They have lost key accounts and advocates for leads into new business clients, which really harms the agency’s brand (Media Buzz). DDB seems to have lapsed on staying relevant and have become stuck in their traditional forms of advertising while others advance to equip their services with strategies necessary to meet the needs of the digital age.
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DDB’S New Business Plan DDB will execute will first replace key client advocates from client accounts recently losts with new business and existing clients like Mcdonalds to acquire struggling prospects like burger king for example. Secondly, DDB will send direct-mail to potential clients to express directly our interest on how our business to client relationship can offer extremely valuable benefits. To better our win rates, we will only provide specs of success stories and pitch concepts when contracted and compensated for a minimum of 30% of the negotiated fees. This way we can separate which clients are seriously considering our valued work and not pilfering ideas to compare to multiple agencies. DDB will lastly hire a new business supervisor to properly manage the goals set for increasing new business revenue.
Financial Management Currently DDB is at a struggle to maintain a healthy income to the agency. They are unable to provide their employees with a proper paycheck and yearly bonuses, which has had an affect on the employee stamina at the agency. It is necessary then for DDB to figure out a new system to bring money back into the agency and able to provide its employees with an appropriate income to maintain a good relationship with them. However, to make up for the lost profit, DDB must let go of their employees that no longer provide quality work for the agency. This approach has been chosen over eliminating clients because they are all important to maintaining DDB at the moment. All of their clients are strong and provide a decent profit to the agency. It will be important for DDB to maintain those relationships to bring income into the agency whereas employees who do not benefit the agency are wasting money. To do this, DDB must first begin working on their new evaluation system discussed above. They must determine which of their employees are the most beneficial and profitable to the agency, and which ones are lacking in the necessary talent to produce quality work. Once this evaluation is completed, DDB will have eliminated a section of the agencies employees that will result in a proper balance of the finances within the agency and hopefully allow DDB to rewards its remaining employees with decent paychecks.
Publicity Plan Because DDB’s main issue is it’s employees opinions towards the agency, it would be beneficial to promote the agency as an innovative workspace that the employees want to work in. To do this, DDB will give their employees an experience they will not forget by sending them on exploratory trips around the United States. Employees will be selected based on their quality of work done for the agency and then asked to maintain a blog throughout their experience. People then outside of DDB will then be able to digitally interact with them through the blog to learn about the trip and the life inspiring change
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DDB is helping its employees go through.. As a result of this trip not only will new people develop new positive insights towards the agency through the blog, but also allow the employee to grow a better understanding of what social creativity means to them. When they return to DDB, they will want to start producing inspiring work that DDB was once known for and feel a strong sense of companionship towards DDB.
Launch Plan Month 1: New management will be put into place, regional CEOs and CEO of DDB North America will meet to review the agency plan, and write down specific, measurable objectives with key strategies that will be used to meet these objectives. Goals will be reviewed at monthly board meetings to ensure that the agency is on track. Month 2 - onwards: CEO’s of each office will meet with their clients to gather feedback on client-service satisfaction and overall quality of campaigns. Changes will be made to next campaigns based on feedback. The evaluation system (for team effectiveness, advertising, management, and client-service) will take effect immediately. Month 3: Establish new budget, taking into consideration the need for investment in new media research, the launch of the Life Style Study, employment hiring/firing, the evaluation system, and the Catalyst program. Month 4: DDB will relieve employees who have been underperforming and who have not been taking advantage of the opportunities present in the Catalyst training program. DDB will also recruit new employees who are skilled in user-interface design, creative work, and new media technology. Month 4: For brand development, DDB will boost publicity of the Life Style Study, with PR promoting the agency philosophy and Bernbach’s legacy, and seamlessly integrating it into the motivations behind the Life Style Study. Positive publicity and perception of DDB must begin at least two months before aggressive client pitches begin. Month 5: DDB Catalyst and the agency-wide policy of mandatory participation in the program, giving employees and the program adequate time to restructure the courses and program. Month 5: Research and development of new technologies, methodologies, and training for enhancing the digital services experience will take place. Month 6: Begin aggressive new business pitches with identified clients.
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