Global Agencies and the Role of Brands Online

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LONDON -- The growth of the Internet has pushed brands into the core of global DM and interactive agency concern to a point not seen "since mid-century when the guy who built the brand was still CEO."


Paul O'Donnell, OgilvyOne's executive vice president based here, said, "Brands have taken off and benefited massively from the Web. Everybody focuses on brands. We're seeing huge changes in people at Ogilvy who were doing conventional work and are now focusing on brand consultancy with clients.


"Brand discussions today are something CEOs worry about. Doing ads is still vitally important, but there was a level of how high you could get in a discussion of an ad -- if you got to the marketing director, you were doing well.


"Now you get to the top because the value of a brand to corporations has become apparent in ways not seen for decades. Today the brand is a mechanism for market entry, and that means a company's whole constituency needs to be refocused.


"Let me give you an example. We have been involved in the BP-Amco merger and the brand realignment that involves," he said. The territory in which they operate is complex in regulatory, environmental and consumer terms.


"BP was a British company and it is now very much an international one, and the elements of that shift need to be put together so that the new brand becomes meaningful to everybody from the government to the company's own staff.


"Once you have established or refocused that brand, the question arises of how to turn it into more of an e-business than it is. And that's not just a matter of portal development but a matter of where BP adds value.


"Huge opportunities exist for using e-business to make organizations more efficient and to explore just where their core competencies lie," O'Donnell said. That, he added, is where DM agencies with interactive capability can be most helpful.


Like most large networks, OgilvyOne has moved aggressively into the new technology to bolster its understanding of e-business and customer relationship management.


But he noted that Ogilvy cannot shuck its heritage of what he called "analog CRM" -- a basic understanding of how relationship marketing works on a human level.


Over the last couple of years Ogilvy has acquired a number of smaller companies in Europe, especially in France and Germany, that bring the agency a better understanding of the technology.


"The companies that we absorbed brought in new people, refreshing our gene pool if you will, and they understand different consumer groups in ways agencies may not have," O'Donnell said.


"What they lack is a relationship marketing heritage -- how you manage brands and consumer interface. But once you put their skills and ours together, you can begin to address issues that companies need to address today, specifically CRM or e-CRM opportunities.


"We haven't seen the death of the analog business, but the things we do for clients who were traditional direct sellers today involve a huge amount of interactivity. Yet CRM also involves mail and other traditional stuff.


"People need databases. You can't do anything without them, and just because you have a Web site doesn't mean you automatically have a database. And those needs influence how we manage this new agency.


"Over the last three years, we have put data management and the consultancy process at the heart of our business model rather than account management and the creative shop approach. That positioned us to address these changes."


OgilvyOne, O'Donnell said, was looking at plans for another restructuring this year to manage multinational business more efficiently, but did not know yet what shape that change would take.


The transformation taking place among corporations and agencies is analogous to that of a caterpillar into a butterfly. "It goes blind. Wings pop through its skin," O'Donnell said. "It's not nice being a caterpillar, but eventually it evolves into a beautiful thing."


The process involves growing pains. "We are suffering to get the level of resources we need behind things," he said. "The scales of engagement have increased, and it is hard to find good people able to take on huge engagements and managing projects of mind-boggling complexity."


OgilvyOne, O'Donnell said, has been growing at a 35 percent annual clip overall, with most of the growth over the past 18 months coming from the interactive sector, which now accounts for 20 percent of the company's worldwide revenues.


"The core has shifted," he said. "The center of gravity is now focused on CRM and e-commerce."
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