Mainardo de Nardis, CEO of OMD Worldwide, pegs finding and retaining the right people as the core target to help the agency achieve its 2020 ambition
By Srabana Lahiri
Mainardo de Nardis, Chief Executive Officer of OMD Worldwide, wishes there were 24 hours more to a day to be able to tick all the points on his daily to-do list. In the course of managing OMD’s team of 8,500 professionals spread across geographies, cultures and disciplines, he has set finding and retaining the right talent as the core target to help the agency achieve its aggressive 2020 ambition. On another front, his desire is to go to every hitherto unexplored market, spend more time with clients, learning from them and nurturing that intelligence to provide sharper solutions. His energy has brought visible results - OMD has been recognized as the world’s most creative media agency for an unprecedented 10th time by The Gunn Report; it has seen significant growth in business and been the recipient of awards on multiple platforms.
Mainardo de Nardis, spoke to IMPACT on the sidelines of the exchange4media Conclave in Mumbai, where he was the keynote speaker. Here are edited excerpts from the conversation.
Q] Give us your progress report on OMD. How has the agency fared in the last 12 months?
Overall, 2016 has been a great year from the business point of view as well as from the awards point of view. We have a unique balance between global clients and local clients. Roughly 50% of our revenue comes from global clients and 50% comes from local clients, which means that we have got different centres for decisions. We did very well in Cannes, and in other countries. In India, so far we have won 66 awards this year. We have been the most awarded agency in the world for the past 10 years and we intend to remain in that position for another 10 years!
Q] What are your top priorities in leading OMD globally and charting its growth strategy in the next couple of years?
Talent, talent and talent. Finding and retaining the right people, to help us achieve our 2020 ambition. It’s all about the talent. That’s what is important for our clients. They know that we are a large agency. They know what we stand for. They know about the investments we have made in technology and in the systems and tools to provide benefits to their brands. They know of our consistency across the globe. What everybody needs is talent, to cover the old areas and especially the new areas. One example I can cite is that in New York, we had 12 or 15 data scientists. Today, we have got 157, in just one office. That shows the level of change that we are going through, and the need to bring new people and talent to this industry.
Q] Tell us about the talent pool at OMD… how do you align it to deliver to the goals of the organization?
We know the people we want. We know the kind of skills that they need. What we are struggling more as an industry, not just ourselves, is finding these people at an early age, straight out of college, in their first or second job. Marketing services are not a natural destination. We haven’t worked enough on converting them while at university or school. As an industry, we need to do a lot more in making our businesses interesting for people of a minority age making it a destination and part of career perspectives. We are not there yet. We are all struggling and fighting for the same people.
Q] What would be the split between revenue growth on account of existing big clients and that from major account wins this year at OMD?
There have been less big pitches in 2016 in comparison to last year. That favours our business model, because our major source of revenue growth has to be our existing clients, local clients and global clients in terms of new services, new geography, new opportunities with them. Every year, that’s our biggest source of revenue growth. And it’s also important because the way of consolidating the relationship with those clients is making ourselves more indispensable, becoming more relevant to the business across multiple sectors. And then there is new business, which is important, but not as important as growing revenue with our existing clients, because it means believing in what we are doing.
Q] Which emerging markets have been delivering the best performance for OMD lately?
Asia in general and Latin America are growing fast. In Asia, there are 2-3 different speeds according to the markets. A few markets have grown particularly quickly in the past 12 months. The UK and Australia have had two fantastic years; these are well-consolidated markets with very fast growth. And then the US is growing, Europe is growing, despite challenges in its economy. We are very satisfied with the growth.
Q] What is the nature of your conversations with clients today – what does the advertiser want?
The main element is reassurance, that at a time of dramatic changes, their agency is still well-positioned to deliver the benefits and the growth that they expect. They want reassurance that we have the right talent, have invested in the right areas, have the right technology, the right data and that we manage data in the right way to be as relevant in the next three years as we have been in the last three years. It’s the reassurance of certainties at the time of change. The second one is deeper understanding of marketing investments on the brand, where is the return, how to measure it, what is the real return of investments linked to the business, not just marketing KPIs, what difference is it making to their business in the short term, or in the performance area in the long term, or in the branding area.
Q] You spoke about advertisers behaving like ‘data day-traders’ during your presentation at the exchange4media Conclave. How serious is the issue of marketers having a short term view of media planning?
I think there is an unbalance between short and long term, which is transforming itself into techniques as well, more in performance marketing than brand building. It is difficult to generalize because every brand has its own needs, but it’s important to always look at one and the other because the world is not going to end at the end of the quarter and we need to make sure that we protect the brands that we have been building. The cost of acquiring new customers is significantly higher than retaining the ones that we have; we have to think long term.
Q] What is your view of automation in the business? Do you see a tilt towards programmatic media buying over traditional media buying?
If something can be bought programmatic, it will be bought programmatic, because it’s more efficient. You can measure the result better. We are learning how to manage content in a programmatic way, and to experiment and verify what is working better than others. Is data, media and content, all coming around our understanding and knowledge about the consumer to make it more efficient in the right context, at the right price, the right format on the right screen, and the right time to generate benefit for the brand? In very simple words, anything which can be bought programmatically will be bought programmatically. Even clients are pushing us on this, because the real benefit is for the brand.
Q] Media agencies have already evolved to become strategic partners for clients. So, how does the agency-client relationship grow further from here? What is the next level?
We have deep relationships with our clients, right from the bottom, at product manager level to CEOs and CFOs. They are great partners. An evolution of the relationship is that, one we have to become more involved in the business results that we are trying to help them achieve. Two, remunerations would have to be linked to the results over time, so that we have more of a pay-for-performance approach with higher incentives for delivering more to specific brands. If they do well, we do well.
Q] OMD has been in the news, gaining recognition for marketing communication effectiveness for brands like Waterwipes, Eurotunnel, Pepsi Max, etc. What are some of the things that you do right to enable this?
An integral part of what we stand for is what we need to achieve for our clients. We treat awards like a business KPI. We measure it on a monthly basis. We make it important in the company. We celebrate successes because an award is a proxy for innovation and creativity, not just a Cannes Lion adorning the reception area. If we win more awards, we will always be the most creative and innovative agency in the world. We want to do well at the Cannes awards which are more about big ideas. And we want to do well at awards like the Effies, which is all about effectiveness, return on investments and what have we achieved for the business of that brand. This is a unique part of the OMD positioning and it’s what makes us stand apart. It doesn’t matter if we have been doing this for 10 years, we will continue to do this for the next 10 years. It’s just innovation and creativity applied to different marketplaces. Data plays a bigger role in innovation now than it did 10 years ago.
Q] You have been experimenting with content creation and pop culture media collaborations with big success. What are some of the best innovations from OMD over the last few years?
One that I particularly like is our work on Pepsi Empire with Fox where if you saw the case study, we penetrated the programme and the actors were actually the people who developed the creative advertising and they launched the spot as part of the story. It was all based on the insights that we have, the insights generated by big data which helps to identify big trends and small data which really helped us dig deeper into what the real expectations of the consumers are.
Q] Social media now allows consumers to comment on brands, generating positive and negative communication in real time – how has this impacted media planning?
Being able to forecast the results of owned and earned media is very important. We do a lot of social listening. We hear what consumers are saying about the product across any platform and across the world. We generate content literally within minutes to follow those conversations, because we want to capture the emotions and interest that people are expressing, become a part of those conversations with specific content which then is accepted, shared and re-distributed by the audience.
Q] There has been much consolidation in the media agency domain, with mergers and acquisitions galore. Do we expect any news on this front from OMD?
OMD has not grown through acquisitions, though over the years we have done a few to fill in certain situations, but overall we have grown organically, by creating new services that are relevant for our clients and then scaling them across the world. We started content that way by working on specific clients, creating the teams and then generating it. Perhaps the only big acquisition we have made over the years is search agency Resolution. But on everything else, we prefer to be a bit slow and proceed organically and in a relevant way for our clients. The key is to be fully integrated within their teams. As 48 global clients form 50% of our business, we know exactly what is needed and are very focused on that.
The big benefit is that it is relevant to our client needs; besides there are less issues in integrating the people, or chances of losing talent after an acquisition. That is really how OMD has been created, and we don’t want to change that.
Q] Omnicom now has three media agency brands with the launch of ‘Hearts & Science’. Has there been any internal strategization on how you will approach the markets or work along with sister brands PHD and now Hearts & Science?
No, I don’t think we have planned an approach to the market because the philosophy is always the same - that we all need to grow and sometimes compete in the marketplace. Of course, we have got different strategies. OMD has the vast majority of categories occupied by clients. So our growth has to be in specific areas where we don’t already have big clients working with us. PHD probably has more categories to conquer with their own specific and unique positioning. And Hearts & Science is being built more on the back of larger digital-driven clients. But it’s not a conscious positioning of all the brands. It’s just the history and the DNA of what they stand for. We will continue to grow with our big global clients and that’s what we are - specialists in managing big portfolios of incredibly high quality blue chip clients.
Q] What are the challenges that you faced overall at OMD last year? And what are the challenges you foresee in the coming year?
The challenge of the past year has been in making sure that all the services that we provided – be they inside OMD, or part of Omnicom Media Group, or part of Omnicom even – are delivered in a fully integrated way to our clients. The challenge was to make sure that it was always one voice, one strategy, one direction integrating whatever service came from inside or outside the specific OMD agency. The challenge for next year is continuing to have the right talent and to be able to deliver this and to scale it to every client and every market. So, challenge of 2016 – integration. Challenge of 2017, 2018, 2019 and 2020 – talent.
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