BBDO leverages global strengths

On May 14 PNMD Communications officially became BBDO Montreal in an effort to bring the successful ad firm up to speed - ...

On May 14 PNMD Communications officially became BBDO Montreal in an effort to bring the successful ad firm up to speed -

at least in name – within the

wildly morphing world of global communications.

PNMD, which has had close ties to BBDO Worldwide for close to 20 years, ‘found that Quebec-based clients, whether they are Quebecois and only dealing in this territory or national in scope – or international – want to deal with people who have global connections and resources. So it’s extremely logical to take the BBDO brand and bring it to the marketplace,’ says Ray Boucher CEO of BBDO Montreal.

Boucher, who founded Scali, McCabe, Sloves/Quebec and PUBLITEL Communications, has been at the helm of PNMD since 1992. The agency’s clients include Alcan and Bauer, 7UP (across Canada), Neon (in Canada, Mexico and Latin America), not to mention a major new assignment from Bombardier Aerospace.

Allen Rosenshine, Chairman and CEO of BBDO Worldwide, was in Montreal to discuss how BBDO Montreal represents a force in Quebec and strengthens its global product offering.

‘For multinational clients, and from my perspective, there’s always more of a sense of having a network at our disposal when the resources around the world are branded BBDO,’ says Rosenshine, who has been recognized by Advertising Age as one of the most influential people in advertising over the past century. He has worked in the industry since 1965 when he started at BBDO as a copywriter, later rising through the ranks to his current position. In 1986, Rosenshine spearheaded the creation of Omnicom Group, which today is the largest advertising organization in the world.

BBDO Worldwide, owned by Omnicom Group, has more than 300 offices in 76 countries and annual billings of $14 billion U.S. The network manages 59 of the 100 largest brands in the world, including General Electric, Pepsi, DaimlerChrysler and Visa.

One of the major challenges for the agency stems from its DaimlerChrysler account. In order to better serve Chrysler, BBDO created PentaMark Worldwide, a separate Detroit-based division devoted exclusively to the carmaker. This, coupled with recent economic difficulties in the U.S., particularly within the automobile industry, has forced the agency to make some hard decisions regarding its international operations.

Strategy sat down with Boucher and Rosenshine to discuss the challenges that lie ahead.

Strategy: Can you talk about DaimlerChrysler and recent

experiences with that account? How will PentaMark help reconcile the differences between the success of the creative advertising and the current struggles of the company?

Rosenshine: It’s a matter of public record, the difficulties that the Chrysler group, in particular within DaimlerChrysler, is going through. It is our hope that with the new management in place, and with the new agency resource PentaMark, that we will be able to contribute significantly to an eventual turnaround.

The Chrysler Group in Detroit has announced their turnaround plan, part of which is a challenge to our agency to deliver new advertising that is more aggressive, more provocative – and we welcome that challenge.

While there is a limit to what an agency can do in an industry like the car business in terms of business turnaround, certainly it is our view that we will be able to contribute significantly as a global and total communications resource.

PentaMark is totally dedicated to Chrysler. It is multi-channelled and multi-faceted in its communications outlets and it is global in that PentaMark exists in every market that Chrysler will be doing business.

Strategy: Is there a crisis on the horizon as far as ad spending

is concerned given the recent

economic slowdown? Are you

concerned?

Rosenshine: Looking at BBDO both globally and on a U.S. basis, the word crisis would be a great overstatement. Concern, yes.

Have we seen the bottom of the downturn? I’m not at all sure. We see clients who are being cautious, but we have not seen any massive reduction in budgets. So I believe that while this will probably be the first really difficult year in the last five or seven, for BBDO as a whole, we’re confident that we can continue to show the kinds of growth that we’ve shown in prior years. It will not be easy, but I would certainly not use the word crisis.

Strategy: What are the unique strengths and weaknesses of Canadian agency operations?

Boucher: It has been hard for agencies, in English Canada in particular, to distinguish themselves vis-a-vis international clients as to the differences in the creative marketplace. They’ve been fighting that, but they’ve been winning a lot of those wars. Certainly from a Quebec perspective, it’s a different story. Things are not so much in question because the language is different.

In terms of Quebec agencies, we have a very thriving industry here turning out a product that’s getting better and better. We’re working, for example, on Telus with our friends at Lanyon Phillips in Vancouver. We have a growing relationship with these people and it’s very important to them to have national pan-Canadian – including some strong regional – capabilities.

Strategy: The New York Times reported recently that there is a further shift towards compensating agencies based on results. Can you comment on what kinds of things this opens the door to from an operational perspective and from the creative side of things?

Rosenshine: Compensation on a commission basis has been on the downturn for a decade. I can think of no clients we have [that] compensate us on commission alone. When you read about what a Unilever or what a P&G might be doing, they might be changing their compensation systems in a more massive way, but the changes they’ve been talking about have been in the works, in one form or another, for years.

Boucher: The same thing would apply here. There’s more talk than real action in terms of sophisticated performance based systems. In an informal way, most clients have some kind of recognition of performance and the way they treat you. And when you negotiate fees on an annual basis [it boils down to] whether you call it growth or you call it a bonus.

Rosenshine: At the end of the day, I think it’s fair to say that sometimes agencies have advocated totally performance-based systems and said that they welcomed it, but found no way to define the criterion upon which that would be acceptable to a client. If you are going to take the responsibility for accepting performance-based compensation, the areas of responsibility that the agencies would then have to take over from a client would be unacceptable.

Strategy: You might as well run the company.

Rosenshine: And vice versa. If the client decides to compensate the agency strictly on performance then there are so many things that the client does that impacts whatever the criteria are – that the agency has nothing to do with.

So there hasn’t been been a successful formula in which you’ve been able to come up with ‘Okay, here’s how it will work, and that formula spits out a number at the end of the year. There’s always a qualitative evaluation in the relationship and a belief in how the agency is doing and there’s always a combination – especially with the larger clients – of how compensation is arrived at.

Strategy: Since more rides on the message having an impact, what sort of threat does ad-blocking software pose to you?

Rosenshine: This only presents us with two challenges – both of which we welcome. It forces us to depend even more on our creative abilities to create messages and formats that people will not want to skip.

Number two is that it forces us to think about delivering our messages in ways other than traditional commercial pods, which the new technologies are enabling us to do in any event.

The threat that people don’t want to or will be more easily able to avoid watching commercials is one that we’ve lived with for a long time, but now it just becomes more poignant. I don’t see that as the end of advertising. I don’t see that as the end

of even traditional broadcast advertising. I see that as a creative challenge and as a media challenge for us to consider how to use the technologies that are being developed in

better and more focused ways for

our clients.

Strategy: In other words, you feel that advertisers have to do more targeted, content-relevant marketing?

Rosenshine: Absolutely, and the other thing I would add to that is that the economics are not at all set as to whether or not these technologies are even going to permit the skipping of commercials. Somebody, somewhere has to pay for content.