For an agency that seemed completely inert four years ago, Ogilvy has built up an impressive head of steam, and the momentum continued to grow in 2000, with organic growth at better than 40 percent and growth with acquisitions of close to 75 percent. In the U.S., the agency was expecting growth of closer to 90 percent, having already doubled its fee income since 1996. Alexander Ogilvy, acquired two years ago, led the way, with growth of around 75 percent. On a new business tear, Ogilvy picked up more than 100 accounts worth $250,000 or more in 2000, with highlights including Astra Zeneca, BP Amoco, EPolicy, Intelsat, Kimberly Clark, Merrill Lynch, News Corporation, Pitney Bowes, Rockwell, and SmithKline Beecham.
With a new general manager in Paul Hicks, the New York office continues to thrive: its healthcare practice is among the best in the city, its corporate practice establishing itself among the best, and a new Alexander Ogilvy office adds a technology capability. Overall, New York was up better than 40 percent in 2000, to around $25 million. The Washington office, which Marcia Silverman handed off to Steven Dahloff, continued to perform strongly, up 25 percent. Chicago is up 44 percent, based on growth in the corporate and tech practices. But perhaps the best news came from L.A., where new GM James Williams led the once-struggling office to better than 200 percent growth, albeit from a small base. Alexander Ogilvy offices in Atlanta and San Francisco added to the overall rosy picture. An interesting indicator of likely future growth is the firm’s success in Denver, where both Alexander Ogilvy and Ogilvy brands are working together and their joint office is now number one in the market.
While Ogilvy’s international operations are modest compared to some of its main competitors, the growth rate has been healthy—in large part without the help of the major acquisitions the firm has made in the U.S. market. In Europe, Ogilvy is up 40 percent to around $19 million, its London office is the fastest-growing in the U.K, and the firm is handling pan-European programs for IBM, Pfizer, Unilever and others. The only gloomy note is the departure of two key executives, European chief Bob Lear and U.K. chief executive Paul Philpotts. The Asia-Pacific region has been growing at a healthy pace too, up better than 30 percent to around $15 million in fees, and with interesting assignments including work in China for Viagra and Celebrex.
Since the acquisition of Alexander gave Ogilvy one of the premier tech practices in the nation, other acquisitions have rounded out the firm’s range of capabilities, with this year’s purchase of Baker Winokur Ryder adding an entertainment PR practice to the consumer marketing group. Corporate clients include Sony, e-Style, and Perrier-Jouet, alongside celebrities such as Brad Pitt, Ben Affleck, Michael J. Fox, and Chris Rock. The consumer group as a whole now has expertise in several areas: food and beverage; lifestyles; nutrition and health; retail; and fashion and beauty. Another strength is healthcare—with a pharmaceutical group that represents Astra Zeneca, Glaxo Wellcome, Merck, Pfizer and a host of other industry leaders; one of the two best social marketing practices in the industry; and now the biotech expertise of Feinstein Kean. The agency also expanded its investor relations capabilities, handling more than 30 IPOs and more than twice as many private placements.
The core management team, including Marcia Silverman, Paul Hicks, Kym White and others has remained intact since Bob Seltzer’s arrival as CEO, and the acquisitions have added considerable depth, with Pam Alexander and Sandra Moreland filling important roles. This year saw a handful of new hires designed to address very specific needs: Hank Spring as head of the New York corporate group, from Brunswick; John Lovallo from Makovsky to head IR; Chris Clark to head the New York operations of Alexander Ogilvy; Rich Barteki as senior VP in Chicago. Two additions from the corporate side of the business were Lisa McKendall (formerly of Mattel) and Wendy Schwimmer as senior VPs in Los Angeles and New York respectively. Departures included Nancy Rueth and Peter Maneri, who returned to the corporate world with Computer Sciences Corp.
Ogilvy has tripled in size over the past three years, and maintaining any kind of cohesive culture at that rate of growth is difficult, so the agency worked with consulting powerhouse PricewaterhouseCoopers to study its workplace programs and suggest improvements. A new initiative, tagged AGK (Attracting, Growing, and Keeping) includes a range of enhancements, including improved benefits, increased flexibility, and an evolving view of values—which had focused on client service but now emphasize human resource issues more strongly. The agency has also stepped up its commitment to training, with national, office level and practice area programs, and an expanded management training program.
Having launched several new Internet-related products last year, including eBrand—which helps Internet companies position themselves in a highly competitive environment—Ogilvy turned its attention this year to bricks-and-mortar branding, creating a new process it calls Brand Bonding, with diagnostic and analytic tools to find “triggers” for purchasing decisions and ensure consumer relevance. In the technology arena, meanwhile, Ogilvy and Alexander created Silicon Valley Impact, an executive program that emphasizes building relationships with key technology industry influentials
For a glimpse of the future, consider Ogilvy’s work for Healtheon/WebMD, which has grown into a major account that draws on the expertise of multiple offices and all five practices—plus Alexander Ogilvy. The assignment includes brand building, leadership positioning, assistance with eight mergers and acquisitions, participation at the Democratic National Convention and the SuperBowl, marketing to both consumers and healthcare professionals, and public policy counsel on privacy and other issues. Some of the firm’s best work has been in the public affairs arena, including global issues management work for Elf Aquitaine and Wyeth Ayerst, public policy programs for tech clients such as AOL, and continuing work for a host of utilities clients. On the corporate side, its work has included employee communications for BP, the global IPO for KPNQwest, and workplace programs for Comdisco, Motorola and others. On the marketing side, key programs include a cause-related initiative for Kimberly Clark, positioning for WingspanBank.com, and hospitality marketing for MasterCard.
While the Ogilvy name has been attached to public relations in one form or another (Ogilvy & Mather, Ogilvy Adams & Rinehart) for decades, it is only in the past couple of years that it has come to stand for great PR as well as great advertising. Bob Seltzer has embraced the Ogilvy heritage, and in the process made it deeper and richer. It began with internal initiatives, emphasizing vision and values, and continued with an external marketing program that raised the agency’s profile as a leader.
After three years of impressive growth, Ogilvy has moved up the rankings and is now clearly established in the top tier of international public relations agencies. Greater integration of the Ogilvy brand with the Alexander technology PR operations will strengthen the offering still further, but there is a lot of work to do on the international front. Fortunately, WPP has demonstrated its willingness to invest, and Seltzer has demonstrated an ability to pick good partners and make acquisitions work.