Industry Update

Home , Advertising agency, MullenLowe Group, The Marketing Arm, The Martin Agency, TM Advertising, Wavemaker (media agency)

Industry Update

A summary of newsworthy client/agency relationship developments and relevant marketing or agency management trends from the past month. Volume 42

Executive Summary—Monthly Recap TALENT: securing the right talent and resources Buzzwords in 2019 were “Brandformance”, “Storyliving”, “Snackable,” and “Hyper-relevant/targeting.” So 2020 is What will 2020 be known for as it relates to talent? Agency supposed to bring a bit of maturity to an industry that is simplification and consolidation, the impact of automation and sometimes chasing change for change’s sake. Is the AI, the continued rise of in-house agencies, and mergers and agency business still facing a perfect storm of budget acquisitions activity are the top headlines this year, as they reductions, in-housing, talent shortage, and identity were in 2019. Diversity seems to be a big part of the talent crisis? We will see. narrative. Diversity, however, is a loaded concept. Age is not as commonly brought up in that context along with gender CPG giant Procter & Gamble Co., once again the and ethnicity. Yet agencies and advertisers must consider largest advertiser in the world, is in the headlines. hiring people of different ages where hard-earned wisdom Is cutting creative and media budgets truly forcing and experience can be fully leveraged by the entire firm. agencies and marketers to produce higher quality • Are these books on your reading list? Per work that has more impact? That’s apparently what Strategy+Business, the best business books of 2019 led Ad Age (among other reasons, such as the use of included: Unlocking the Customer Value Chain: How disruptive and innovative creative tactics) to select Decoupling Drives Consumer Disruption, The Age of Intent: Procter & Gamble Co. as its Marketer of the Year. Using Artificial Intelligence to Deliver a Superior Customer Experience, and Agency Mania: Harnessing the Madness of The giant advertiser continues to experience solid Client/Agency Relationships for High-Impact Results. growth at a time where it’s cutting its agency, production, and media budgets. P&G was also • Per Forrester’s “Predictions 2020: Agencies,” expect the front and center at CES with innovative concepts, following trends: 1) Automation will reshape the agency workforce, but not without sacrifice, 2) The creative inviting us to think about marketing process will subsume technology and new tools, 3) and customer engagement in less New operations-focused leaders will begin centralizing traditional ways. agencies, 4) In-house agencies will absorb even more media capabilities, 5) Independents and mid-size agencies will flourish beyond being specialists. Bruno Gralpois • Per Ad Age Datacenter and the Bureau of Labor Statistics, Co-Founder & Principal US ad agency employment rose 28% in the past decade. Agency Mania Solutions PR agency employment rose 39%. Job growth has outperformed overall US job growth since 2010. • MDC Partners announced its new network and creative hub, led by Doner, to offer broader services, streamline back-office Newsworthy reports and recent developments operations, and promote better cooperation in the delivery of new marketing offerings. It brings together Veritas (with At AMS, we approach the agency management discipline as four distinct but complementary practice areas—Talent, Meat & Produce), 6Degrees Integrated Communications, Work, Financials, and Performance and Value—which is Yamamoto, Union, KWT Global, and HL Group. how we’ve organized industry developments to follow. • S4Capital’s MediaMonks merged with Delhi-based content creation and production company WhiteBalance, Table of Contents which includes an art content studio as well as in-house Talent...... page 1 film, 3D, and post-production capabilities. The move Work...... page 3 strengthens the group’s position in the APAC region and India specifically. Financials...... page 5 Performance and Value...... page 5 Agency Reviews and Roster Changes...... page 7 • S4 Capital acquired Mexico City-based multicultural digital • WPP’s GroupM merged its [m]Platform with 2Sixty, content agency, Circus Marketing ($38 million in revenue the machine science and software development and 350 employees) to expand the firm’s footprint and unit housed within Essence, in a move to improve broaden its integrated offering to blue-chip clients. “consistency” and optimize the group’s global resources • Story Worldwide acquired VonShine Industries to bolster (Search, Social, Programmatic, and Ad Operations) as the brand agency’s influencer marketing and social media part of GroupM’s restructuring. expertise. The firm is expected to launch StoryScore2.0, a • WPP sold its majority stake in data analytics and sports measurement tool to track the creative impact of content. marketing agency Two Circles, which sat within WPP’s • UK media agency The Specialist Works (TSW) acquired ESP Properties division, an arm of GroupM, to Bruin Sports Toronto-based sample distribution and inserts platform Capital. Two Circles’ clients include the NFL, Premier Connections from Exact Media (now called Connections by League, Uefa, Formula 1, and Wimbledon. The Specialist Works) to expand its North America presence. • As part of WPP’s ongoing streamlining and simplification • A digital consultancy and product development company, efforts, several of its digital agencies merged into Wunderman Thompson called CourtAvenue, was launched by two digital agency , including Mirum, iStrategyLabs, veterans from Rockfish and Mirum. Among other things, and Possible. the shop employs software engineers and developers to • Google announced its decision to exit Managed Services rethink employee and customer-facing applications. in the US across Google Display & Video 360, Search • Leading independent marketing and media consultancy Ads 360, Google Analytics 360, and Campaign Manager. Ebiquity acquired digital media monitoring firm Digital Programmatic in-housing is on the rise, but a vast Decisions, a solution platform to monitor and optimize ecosystem of digital agencies and Google partners (like digital marketing and media buying across geographies Jellyfish, MightyHive, etc.) can provide managed services. and buying platforms, to expand its offering. • Publicis Media is close to finalizing its merger of agencies • Healthcare marketing group W2O acquired 21GRAMS, Spark Foundry and Blue 449 in order to create a single a strategic and creative agency specializing in medical unified entity that will retain the Spark Foundry branding, a advertising, expanding the agency’s offering, which move initiated by recent Publicis consolidation efforts. includes advertising, patient storytelling, medical • Citi built an in-house creative agency, “a creative center education, strategy, analytics, and TV production for 24 of of excellence,” designed to handle go-to-market creative the top 25 global pharmaceutical companies. strategy and to speed up communication between its • W2O also acquired Radius Digital Science to expand the agencies and internal stakeholders. agency’s scientific marketing communications services • R/GA Ventures and parent Interpublic launched a new and medical marketing offering. Radius will now operate as initiative called the RG/A Data Venture Studio, designed to W2O radius, under the broader W2O Science network. connect companies with startups and fill gaps in their data- • Holding company Dentsu cut 11% or 1,400 jobs in seven management models. struggling markets—Australia, Brazil, China, France, • Purpose-focused agency Matter Unlimited acquired Germany, Singapore and the UK—as a result of downgraded experiential shop Agent of Change Events. Both agencies revenue and profit forecasts. The layoffs represent 3% of its worked on topics like social justice, education, health and total workforce. The US is not impacted. wellness, climate change, sustainability and women’s rights. • Havas Group acquired London-based management • Per The World Federation of Advertisers and OxfordSM, the consultancy specialists Gate One, in a move to make holding-company agency model doesn’t appear to deliver on Havas a more integrated service provider that can its core value proposition: better integration and performance. compete with consultancies. • Dentsu Aegis Network acquired E-Nor, a consulting firm that • Havas Group acquired Indian experiential agency Shobiz, specializes in Google Analytics and is a major reseller, sales/ its third agency acquisition in the country this year (it also service partner of Google Marketing Platform with clients acquired Think Design and Langoor). like Salesforce, Blue Cross, and Accenture. The firm will fold into Cardinal Path, a consulting group Dentsu acquired in 2016. The combined entity will be able to integrate multiple systems to run cross-channel marketing activities.

2/12

See how stronger relationships contribute to better marketing. Contact us at www.agencymania.com. If others in your organization are interested in receiving this Industry Update, please let them know that they can sign up on our site at www.agencymania.com/subscribe.html. Noteworthy quotes: • As observed at CES, the future of TV might include new »» “I’d like to take credit for replacing the three-piece suit technologies and formats, including short-term mobile with shorts and sandals.”—Lee Clow, chairman emeritus, content (new platform Quibi launching in April), pause ads TBWA\Media Arts Lab (AT&T’s advertising unit Xandr), linear addressable (Project OAR), vertical and horizontal orientation TV (Samsung »» “We haven’t commingled our brands. We’ve used Sero), NextGen TV (Samsung, LG, and Sony), and more. open architecture as our go-to-market strategy.” • Quibi is the highlighted anticipated streamer, mobile- —Michael Roth, CEO, IPG first entertainment play (led by CEO Meg Whitman and »» “Diversity in all forms leads to better work environments Founder Jeffrey Katzenberg), from daily essentials to and better ideas. And better ideas lead to success, breakout, story-telling shows delivered right to your phone. including financial success.”—Barry Lowenthal, CEO, The short-form (less than 10 minutes) streaming-video The Media Kitchen service has already achieved $150 million in ad sales, »» “Reinventing advertising means reinventing agency landing big brand names, per the Wall Street Journal. partnerships moving from brand people who outsource • Per AMS, the top skills that marketers must master too much of their work to brand entrepreneurs with their in 2020 (see visual below) are: 1) Aligning the right hands on the keyboard.”—Marc Pritchard, chief brand agency partner to the right assignment, 2) Clarifying officer, P&G SOW expectations through comprehensive planning and »» “Over the last decade or two I’ve probably watched resource allocation, 3) Translating needs into regular 100 agencies be acquired by holding companies and and clear input briefs to the agency, 4) Influencing great the problem is I have yet to see one that got better.” work with ongoing thoughtful and actionable work input, —Stan Richards, founder and principal, The Richards Group 5) Offering practical and constructive feedback about the performance and relationship, and 6) Nurturing the »» “Just because we have this one operating model for an partnership by being a great collaborator and facilitator. in-house today doesn’t mean that’s going to [be] the TM Advertising same next year or the following year... we have to be • Dallas agency closed its doors last agile and be able to pivot at any given point.”—Kwan Yim, October after 85 years in business, but then managed to sell the agency’s domain, tm.com for $1.25 million. director and head of global agency management, Citi • Comcast’s NBCUniversal announced it will offer advertising »» “We don’t need 500 brands at WPP. We need 12 to 15 buys that span linear and digital inventory across all its really strong brands and maybe we need some smaller platforms on local, national, and global levels using One boutique brands.”—Mark Read, CEO, WPP Platform, it’s new unified planning/buying capability. • Sam’s Club acquired the proprietary tech stack developed WORK: producing great work and outcomes by WPP’s ecommerce media sales unit Triad Retail Media that the firm had developed for the Walmart subsidiary. The nature of advertising and the work itself is changing • Per Advertiser Perceptions, Amazon continues to be the as a result of new, more embedded and personalized demand-side platform (DSP) of choice among advertisers, technologies, as evidenced by CES this year. The largest followed by Trade Desk, Google, MediaMath, Adobe consumer technology show (CES 2020) once again drew Marketing Cloud and AppNexus. 46% of advertisers claim 170,000+ attendees and more than 4,000 exhibitors in Las to have used Amazon Advertising in the past 12 months. Vegas displaying the newest, most exciting innovation in Papa John’s consumer products ranging from self-driving cars, short- • Founder John Schnatter filed suit against the form streaming services, and DNA-based shopping to company’s former ad agency Laundry Service for breach “intelligence of things” gadgets in every facet of our everyday of contract (confidentiality provisions) and other claims, life. Main topics ranged from consumer privacy concerns, 5G including that the agency secretly taped conversations. enabled capabilities and their impact on new applications, • Per 4A’s and The 614 Group, 58% of industry leaders new personalized offerings, the emergence of subscription consider attracting and retaining the proper talent as the models, and “social media recession” (read: influence biggest challenge to in-housing programmatic capabilities. marketing slowdown and concerns). 41.1% believe in-house talent won’t keep up with the latest • CPG giant Procter & Gamble (P&G) pushed for product developments in ad tech. 53.9% view marketer control of innovation with its AI-equipped and internet-connected first-party data as the main benefit of in-housing. Oral-B toothbrush that provides detailed brushing feedback, • Twitter published a report that reveals 18 significant US its Lumi baby care system for parents offering digital diapers cultural trends based on tweets, categorized by six key and video monitoring. The brand also just acquired Billie, themes: well-being, everyday wonder, creator culture, my the subscription-based shaving brand for women. identity, one planet, and tech life.

3/12

4/12

Amazon, Booking.com, eBay, Facebook, IAC, JD.com, Netflix, FINANCIALS: driving efficient use of resources and Uber, which account for $36bn in global spending. • Per Instascreener, influencer marketing spend in the As the old saying goes: “Numbers don’t lie.” Well, let’s at least US and Canada grew 83% year-over-year. Fashion Nova agree that numbers provide a good optic on the health of our was the top spender, followed by vodka brand Ciroc and industry and current trends. Everyone speaks to a slowdown of Flat Tummy Co. the advertising category, yet projections still indicate a healthy OMD growth, fueled by a strong global economy and major political • Per COMvergence, was the top-ranked global media and sports events on the near horizon (US elections, Olympics, agency by billings in 2019 ($19.6 billion, up 6.1% from etc.). In the meantime, here are two companies with numbers 2018), followed by WPP’s Mindshare and Dentsu’s Carat. that are difficult to argue with: Amazon became the world’s most By holding company, GroupM is top ranked globally, while valuable brand at a third of a trillion dollars, and P&G reclaimed Publicis Media is number one in the US. its number one spot as the largest global advertiser in the world. • Per Allied Market Research, the global video streaming market • Per GroupM, the international advertising market is will reach $149.34bn by 2026, as a result of expected to slow down its growth in 2020 to only 3.9% demand in cloud-based video streaming solutions and (vs. 4.8% last year). Primary drivers: new barriers to global video game streaming. trade and macro-economic uncertainty. • Per the ANA, 60% of advertisers claim that media rebates, discounts, AVBs • GroupM expects that worldwide advertising will grow , etc. are not considered as part of the in 2020 to $628 billion, or 3.9% YOY. Zenith and Magna agency’s compensation, and the advertiser receives their fair estimate slightly higher growth. Per GroupM, 2021 growth share return of any rebates. Only 42% claim to receive full and is forecasted at 3.1%, due to the economic slowdown. complete details of their agency’s programmatic media costs. The US remains by far the largest ad market ($250 • Per Kantar’s BrandZ Top 100 valuation ranking, Amazon billion). TV and digital combined will account for 80% of all became the world’s most valuable brand at $334.65 advertising, with digital accounting for 52% in 2020. billion, or a third of a trillion dollars—the highest amount in • Advertising dollars continued to shift to digital from the ranking’s 14-year-history. Amazon gained 20% value TV, including search, video, social (the fastest growing and is now ahead of both Apple and Google. category), and display this year. Digital ad sales grew 15% Noteworthy quotes: and are expected to account for more than half of global »» “I lead with a business or leader mindset and I put on ad sales ($306 billion) per Magna. my marketing hat when appropriate.”—Janine Pelosi, • Procter & Gamble spent $10.1 billion on advertising, CMO, Zoom marketing services, and digital marketing per Advertising »» “Restructuring has shifted attention away from Age, reclaiming the number one spot among the world’s volume and forced holding companies to attend to largest advertisers, despite cost reductions. The CPG giant integration.”—Greg Paull, principal, R3 is followed by consumer electronics and appliance maker Samsung Electronics Co., the #2 global advertiser, L’Oréal »» “We also have specialists reviewing quotes to make (#3) and Unilever (#4). Procter & Gamble is fourth among sure the agencies are using the rate terms, that they’re the largest US ad spenders at $4.3 billion. staffing appropriately, and that the induction costs are also in line with the industry.”—Alessandra Scocco, head • MDC Partners cut $30 million in spend by restructuring of category management, marketing, Google expenses and assets like real estate and policies. Another $30-to-$40 million in costs is being targeted for elimination. »» “One of the key challenges any CMO has these days is how to balance the short-term and the long-term.” • Per Zenith, an average 6.1% increase is expected in Burger King media prices in 2020. Price inflation is expected to —Fernando Machado, chief marketing officer, counterbalance the decline in global audiences for TV. Internet ad spend is expected to keep growing as a PERFORMANCE: driving stronger performance and category but at a slower pace than the 11% in 2019. value from the partnership • Per R3, marketing services-related M&A deals (489) totaled $27.7 billion in 2019, down 15% YOY. Publicis Groupe was In a recent article titled “A Cure for The Common Pitch,” pitch the most aggressive with its $4.2 billion acquisition of data season is compared to the flu season... inevitable and nasty at giant Epsilon, followed by Bain Capital (with its acquisition times, leaving many in dire situations. Not to anyone’s surprise, of Kantar) and Accenture (with its acquisition of Droga5). marketing performance (or lack of thereof) remains one of Dentsu was the most acquisitive with 12 deals. the major criteria for agency reviews. Yet, performance lacks • Per Publicis Groupe media agency Zenith, global consistent KPIs at times and the industry is constantly improving programmatic trading will reach over $100 billion for the and creating new standards. Is bad publicity sometimes good? first time in 2019 (or 65% of all digital media), increasing We all recall the recent Peloton advertising controversy. The to $127 billion in 2020 and $147 billion in 2021. ad released in late November was considered by some as • Per GroupM, the ad market is increasingly consolidated confusing, sexist, and classist. The brand experienced a among a small number of tech players—Alibaba, Alphabet, $942 million (or 9%) drop in market value in a single day amid backlash to its controversial holiday ad on social media. 5/12

See how stronger relationships contribute to better marketing. Contact us at www.agencymania.com. If others in your organization are interested in receiving this Industry Update, please let them know that they can sign up on our site at www.agencymania.com/subscribe.html. • Procter & Gamble was recognized as marketer of the year • Per COMvergence, independent media agencies won by Ad Age. Primary reasons provided included “ingenuity 34 of the 138 pitches in 2018 (nearly 25%), representing in creative marketing tactics”, “reduction of its agency, $1.9 billion of $12.3 billion in spend (15%), rising to 56 production, and media waste by $1 billion in less than four of 149 pitches (nearly 38%) in 2019. In 2018, 40% of 134 years”, “clarity and accountability,” and the “resilience of newly appointed/retained creative assignments went P&G people.” For example, P&G enlisted a broad array of to independent agencies, jumping to 44% of the 70 outside contributors like National Geographic and Arianna assignments in the first half of 2019. Huffington’s Thrive, for documentaries and “micro-habits.” • Per The Drum, top independent agencies in the UK • Per Ad Age’s 2019 Marketers of the Year list, winners include Jellyfish, Sideshow Group, Brainlabs, Leagas were: 1) P&G, 2) Popeyes, 3) White Claw, 4) Target, 5) Delaney, George P. Johnson, BBD Perfect Storm, Push, Barbie, 6) Disney, 7) Ally Financial, 8) Greta Thunberg, 9) Transmission, The Goat Agency, and Dept. Microsoft, and 10) US Women’s Soccer. • Watson Advertising built Advertising Accelerator, a dynamic • Adweek nominated Droga5 as the Agency of the Decade, creative optimization (DCO) and AI combined tool that predicts mostly due to its rapid growth (annual revenue growing the best ads and quickly tests versions during a campaign. from $14 million to $200 million over the 2010s or 30% • Per JP Morgan’s annual holding group new business rankings growth per year on average) and its reported “dominating for 2019, Publicis Groupe ranked as number one (second year creative force” (three-time winner of Adweek’s US Agency in a row), mostly fueled by big wins from Disney, LVMH, and of the Year and was crowned Cannes Lions Independent Nivea, and an estimated $77M in additional revenue. Publicis Agency of the Year for 2015, 2016, and 2017). Groupe is followed by Interpublic Group (IPG) and Omnicom. McCann Worldgroup • was named 2019 Global Agency • Following a pilot/trial in which artificial intelligence (AI) of the Year by Adweek. Key global wins included: eBay, outperformed humans for tasks such as writing ad copy, Fujifilm, Sarepta Therapeutics, Saudi Aramco. The agency Chase hired Persado, a company that applies AI to grew 2.5%, reaching $2.4 billion in total revenue. marketing creative, for a five-year deal. Chase reported • Beer giant Anheuser-Busch InBev announced it’s going achieving up to a 450% lift in CTRs. through a transformation journey in partnership with its agency • Per cybersecurity company CHEQ, online fake news is partners like Dentsu Aegis Network’s Vizeum. The brand, estimated to cost the global economy $78 billion annually. which spent +$1 billion in media across 50 markets last year, Brands are reported to lose $235 million annually from declined the rumors of a current or imminent media review. unknowingly running ads alongside fake news. The Drum • editorial team’s carefully selected noteworthy Noteworthy quotes: agencies of 2019: Rothco, McCann, Droga5, Sparks & Honey, Johannes Leonardo, and Mother. »» “Machine learning is the path to more humanity in marketing.”—Kristin Lemkau, CMO, JPMorgan Chase • Cannes Lions International Festival of Creativity added a new Lion to its list of awards: Creative Business »» “Through a proliferation of tech and network Transformation. The new Lion invites consultancies and partnerships, independent agencies can compete with agencies in experience design, creative innovation, and anyone globally, whether they’re holding companies or digital transformation that produce customer experiences not.”—Andrew Fischer, CEO and co-founder, Choozle and drive operational shifts to a brand’s core business. »» “If you create something that looks, feels and smells • MediaPost’s 2019 Agency of the Year Awards Honorees: like an ad, it’s probably not a good ad.”—Fernando Mindshare (Media Agency of the Year), Omnicom (Holding Machado, chief marketing officer, Burger King Company of the Year), USIM (Independent Agency of the »» “There is no reliable shortcut around the investment Year), BBDO (Creative Agency of the Year), 360i (Search a strong agency partnership can deliver to a brand’s Marketing Agency of the Year) and Target (Client of the Year). growth.”—Marla Kaplowitz, president & CEO, 4A’s Facebook • Social platform expanded its campaign »» “The most common misconception about the embedded reporting services to include a cross-account reporting model, however, is that simply putting people together service (reach, impressions, and conversion details for in the same space is the solution. It takes a lot more than numerous ad accounts) and a custom metric building tool. that. ‘Embedded’ means teams are involved in strategic • Retailer giant Kohl’s incorporated AI into email subject conversations much further upstream, it means that lines and banner ads and its digital media buying to teams are briefed differently, in many cases, briefing expand results from a trial with Google. themselves, and openly collaborating on an assignment • French born agency, BETC, was named international Agency to the point that ideas can flow more naturally, and of the Year by Adweek. Clients include Lacoste, Lego, decisions are made faster.”—Warren Marenco Chase, Firewood Marketing Bouygues, Evian, and Pornhub. Key client wins include chief operating officer, Danone-owned Danette, Givenchy, Leclerc, Michelin, »» “If brands truly want the most out of their agencies, they Mondelez-owned Prince. The agency grew 7.9% YOY. need to give access to whatever they need to make strategic decisions, such as proprietary data and high- level business goals.”—Emily Wilcox, head of account management, Johannes Leonardo 6/12

MEDIA AGENCY NETWORKS TOP 5 PITCHES 2019 DEPARTURES COMvergence has assessed about 20 billion US dollars of media spend OF GLOBAL HEADS reviewed during the year 2019 – representing nearly US $9B as follows TOBY JENNER Global COO promoted to Global CEO Wavemaker CHRISTIAN JUHL Global CEO promoted to Global CEO GroupM

$2,000M MIKE COOPER Worldwide CEO $550M $400M $300M $260M promoted to CEO, OMG APAC & EMEA SCOTT HAGEDORN Global CEO promoted to CEO OMG North America OMG23 Publicis Imagine GLOBAL Platform GSK LISA DONOHUE Global CEO MAIN INCUMBENTS INCUMBENT INCUMBENT MAIN INCUMBENTS MAIN INCUMBENTS DARYL LEE Global CEO OMD, Carat, Starcom Wavemaker MediaCom, Blue 449 Horizon Media (US), promoted to Global CEO Mediabrands Mindshare, Zenith Havas Media TIM RINGEL Global CEO

RUTH STUBBS Global CEO appointed to Wavemaker EMEA CEO

* $2,750M NORTH AMERICA $450M $425M $365M $220M MULTI-MARKETS EMEA EUROPE MULTI-MARKETS APPOINTMENTS OF GLOBAL HEADS 80% 20% TOBY JENNER Global CEO MAIN INCUMBENTS INCUMBENT MAIN INCUMBENTS KATRINE GRAUGAARD MAIN INCUMBENTS

MULTI-MARKET Wavemaker Havas Media Wavemaker, Global Head of Marketing Mindshare Carat, MAIN INCUMBENTS PHD, Vizeum ANNA HICKEY Hearts & Science PHD, Carat (China) Global Client President NICK LAWSON * Australia, New Zealand, Ireland, India, Qatar and Netherlands were not part of the pitch. Global COO KYOKO MATSUSHITA Global CEO PHILIPPA BROWN $340M Worldwide CEO $295M $200M $140M MATT JAMES $230M Global Brand President USA MICHAEL EPSTEIN Global CEO EILEEN KIERNAN INCUMBENT INCUMBENT INCUMBENT INCUMBENT INCUMBENT Global CEO MediaCom KWG OMD in-house Essence DIMITRI MAEX COMvergence’s net media spend estimates are sourced from (net estimated) Nielsen / Kantar data. Global CEO MAJOR DEVELOPMENTS / ACHIEVEMENTS Adweek’s Global Agency of the year 2019, OMD has secured the biggest successful Evolution of Spark Foundry and Blue 449: dentsu X has been recognized as the launched a global end-to-end process called OMD retention pitch of the year, Novartis. United the global networks to create one fastest growing agency in the world with Design that ensures better business outcomes. It scales innova- Adweek Media Plan of the Year: Best Use of Branded Content/ global powerhouse proposition under the Spark Foundry 40% YOY growth rates; and continues tion through the practice of empathy & is fully connected into Entertainment, Samsung’s “#DoWhatYouCan’t”; Best Use of brand in majority of markets. Also the network was named massive expansion and scale with 63% growth in China, on- Omnicom’s precision marketing platform Omni. George Manas Programmatic, Van’s/VF Corp “Not Just One Creator” “Strong Performer” in The Forrester Wave™: Full-Service Me- boarding Gravity in the US and in the UK bringing together appointed President & Chief Media Offi cer OMD USA. dia Agencies, Q1 2019. Fetch and 360i. named Media Network of the Year played a key role in partially securing the big- named Erin Matts US Chief Executive at the 2019 Cannes Lions Festival of gest pitch of the year, Disney. Adweek’s 2019 New strategic direction and a new common Offi cer. She replaces Scott Hagedorn Creativity as well as at Global Festi- Media Plan of Year: Cause Marketing, Verizon’s mission: make a meaningful difference to who has been promoted to North America CEO of parent fi rm val of Media Awards. Also named Global Mobile Agency of the “The Team That Wouldn’t Be Here”; Best Use of OOH, Visible’s brands, businesses, and people. The Group Omnicom Media Group (OMG). Year by the MMA for the third year in a row. “404 Store Not Found”. Aligned Zenith USA with sister agen- has tripled its presence in India (3 acquisitions in 2019) and cies Moxie and MRY under one CEO, Lauren Hanrahan. opened 7 new villages (62 across the world). Awarded P&G US media business in largest Received Agency of the Year recognition single agency consolidation of 2019 in January. from both Adweek and Mediapost. Appointed Michael Epstein as Global CEO and Angela Steele as enjoyed another strong growth year with the promo- US CEO. Epstein also named Adweek Media Executive of the year. tion of Eileen Kiernan, former head of dedicated J&J In the face of strong headwinds, a declining Transformational year of global growth, unit J3, addition of new accounts Nestlé, Levi’s Strauss market and a highly competitive environ- Named Media Network of the Year by & Co, Mattel, Energizer, Just Eat, CVS Health Aetna, and Shan- delivering new models for clients and now 7/12 ment, Initiative won and retained between with more than half its staff in embedded onsite teams. Spikes Asia, M&M Global and WARC gri-La Hotels, and win of its fi rst Entertainment Grand Prix at $700M and $1B in billings. This strong growth was coupled in 2019, and topped the year by winning Campaign’s Agen- the Cannes Lions Festival. with Initiative being named Adweek’s Media Agency Of The cy Of the Decade (the second decade in a row). #4 globally, Year and Ad Age’s Comeback Agency Of The Year in 2019. named “Strong Performer” in The See how MediaComstronger is the fastest relationships growing Top 10 agency contribute network. to better marketing. Contact us at www.agencymania.com. Forrester Wave™: Performance Marke- ting Agencies, Q3 2019. A top fi ve global media agency, Wavemaker retained their Eurobest Media Network of the If others in your organizationhas added a range of areclients includinginterested AXA in receivingYear title forthis the secondIndustry year, developed Update, their please let Vizeumthem had know two critical that appointments they in can sign up on our siteInsurance, at www.agencymania.com/subscribe.html and exceptional award wins inclu- relationship with Pokerstars. to win The Stars 2019. Paul Wilson was appointed Global named a Leader (for the 4th consecutive ding the Cannes Lions Glass Grand Prix. Now looking at a strong Group global account, as well as winning the Delta Airlines, LG Chief Strategy Offi cer and Ashley Earnshaw year) in Gartner’s 2019 Magic Quadrant for 2020 under the new leadership of Global CEO, Toby Jenner. Electronics, Singapore Airlines and Tik Tok global accounts. as CEO, Vizeum Australia. Global Marketing Agencies. KEY HIGHLIGHTS 2019

MEDIA AGENCY GROUPS/HOLDINGS HEADCOUNT AND BILLINGS

130,000 79,850 70,400 62,600 54,000 20,000

36,000 23,500 21,500 47,000 13,000 10,600 $50.05B $33.78B $31.37B $24.35B $17.21B $9.08B

* Projected 2019 Global Billings ﬁ gures are sourced from COMvergence estimates released in Nov.2019.

51 MARCOM AGENCY ACQUISITIONS

12 (19 in 2018) 6 (8 in 2018) 2 (1 in 2018) 1 (1 in 2018) Including Ugam Solutions (1,840 staff) Including Epsilon (9,000 staff) Including Jellyﬁ sh (780 staff) Inside Ideas Group (1,500 staff)

7 (7 in 2018) 3 (3 in 2018) 2 (3 in 2018) 1 (6 in 2018) Including Dogra5 (500 staff) Including MDC Partners (6,000 staff) Including Smart Digital (60 staff) Pervorm (30 staff)

7 (2 in 2018) 2 (5 in 2018) 1 (1 in 2018) 1 (12 in 2018) Including Firewood (300 staff) Including Winter Agency (100 staff) Love Agency (40 staff) AQuest (70 staff)

(3 in 2018) 6 No acquisitions recorded for IPG, Capgemini, IBM iX, M&C Saatchi and PwC (Digital Services) in 2019 Including Shobiz (330 staff)

DEPARTURES APPOINTMENTS OF TOP HEADS OF TOP HEADS CHRISTIAN JUHL Global CEO PHILIPPE KRAKOWSKY Global CEO MARK PATTERSON Global COO while remaining chairman of Mediabrands KELLY CLARK Global CEO BRIAN WIESER Global President JODIE STRANGER Global Practice COLIN GOTTLIEB CEO OMG EMEA of Business Intelligence Lead, Business Development Chairman OMD Worldwide JACKI KELLEY CEO Americas DAVE PENSKI, COO, PM Americas, NIGEL MORRIS Global Chief and Chairman, PM Exchange DARYL LEE Global CEO Strategy and Innovation Offi cer ERIN FLAXMAN Global Chief Growth NICK BRIEN CEO Americas SOFIA COLANTROPO Global Offi cer Chief Marketing Offi cer

For more informationMAJOR about major developments DEVELOPMENTS and achievements from / these ACHIEVEMENTS agencies or the above summary, please contact Lisa Spielman. Creation of INCA, their infl uencer marketing solution, in APAC. Creation Through continual developments to appointed Daryl Lee as its new global of New Majority Ready Coalition with media partners in the U.S. Omnicom’s marketing and insights CEO, and launched Kinesso IPG’s Forrester cites GroupM Performance as a Strong Performer in their platform, Omni was recognized by new marketing intelligence engine Forrester Wave report. First Holding Company to become an Adobe Ambassador. Forrester as “The most creative integration of that works seamlessly across audiences, planning Disclaimer: The reviews listed often capture larger review activityagency platforms reported to date.” in the industry tradeand activationpress, towhich drive insights we understandand meaningful to marketing results. be only a subsetPublicis of Groupe’stotal reviewacquisition ofactivity. Epsilon has Specialist turbocharged its reviews media, (digital, social, PR, etc.) are rarely reported in the trade press. Also, due data, tech and creative offerings, putting people at the center by In addition to a strong year for new launched the Mx System which to the increasingbuilding number a unifi ed customerof project identity unlikereviews any other. (versus Publicis MediaAOR/retainer business, reviews), Dentsu many Aegis of thoseNetwork are not receivingis a new mediamethodology attention that goes and therefore are notwas the included fi rst holding companyhere. to receive Trustworthy Accountability completed 3 strategic media acquisitions beyond traditional media planning Groupe “Platinum Status” – obtaining all 4 available “seals” (TAG Certifi ed Against in 2019 – all through iProspect: Ambient to create meaningful media experiences. Mx Fraud, TAG Certifi ed Against Piracy, TAG Certifi ed Against Malware, compliant Digital, EBP and MuteSix, one of the world’s largest operates through a four-tiered framework to ensure w/ TAG Inventory Quality Guidelines). direct-to-consumer marketing agencies. a seamless and consistent workfl ow globally.

8/12

See how stronger relationships contribute to better marketing. Contact us at www.agencymania.com. If others in your organization are interested in receiving this Industry Update, please let them know that they can sign up on our site at www.agencymania.com/subscribe.html. • Anheuser-Busch InBev selected Wieden+Kennedy New York • The US Navy kicked off its review of its advertising and as its new AOR to handle its Michelob Ultra brand, replacing marketing recruitment contract scheduled to take effect incumbent FCB Chicago, which will remain involved. in May 2021 (initial one-year term with annual renewal • McCain Foods selected Smith Brothers as AOR for its options for four additional years). The last contract was food service business, following a review. The agency will awarded to WPP’s Y&R (now part of VMLY&R) back in 2015 handle strategic planning, creative, production, media, and is now up for review. analytics, and web development. • Natural and organic meats producer Applegate hired • Marriott International appointed award-winning agency independent New York-based shop Terri & Sandy as its Alma (which is part of DDB Latina) as its social media AOR creative AOR, following a review. The brand previously for the Caribbean and Latin American region across its 30 worked on a strategic project with the agency as well as global brands, following a review. other creative agencies on a project-by-project basis. • Beans maker Bush Brothers & Co. selected a new • LVMH Moët Hennessy Louis Vuitton-owned beauty retailer Sephora integrated and strategic AOR, Interpublic Group of Cos.’ kicked off a review of its North American media Carmichael Lynch, replacing 23-year incumbent MDC account. Parent company LVMH selected Dentsu Aegis Partners-owned Doner, following a review. Network as its media AOR across all brands last year. Incumbent Dentsu Aegis Network is defending. • Real estate company Zillow selected New York shop Fig Pinterest (originally Figliulo & Partners) as its lead creative agency, • hired Interpublic Group of Cos.’ Mediahub following a review, replacing incumbent since 2012, and MDC Partners-owned 72andSunny as its respective Interpublic Group of Cos.’ Deutsch Los Angeles. media and creative agencies of record following separate reviews. The brand previously handled creative work in- • International real estate franchisor RE/MAX selected house and worked with Giant Spoon on media. Knoxville-based Tombras as its media AOR, following a Marks & Spencer (M&S) review and replacing incumbent Dentsu Aegis Network- • selected NMPi to handle the owned Carat. The agency will collaborate with creative brand’s social and display advertising account, replacing AOR Havas’s Camp + King. incumbent GroupM’s Mindshare. Bayer • The Kraft Heinz Company’s Philadelphia Cream Cheese • added Interpublic’s MullenLowe Group to the brand selected Miami-based indie shop Gut as its creative agency roster for its consumer health division, following AOR. The agency previously worked with the brand on a a review and replacing incumbent BBDO. The agency project basis. will handle brand and digital strategy and creative development. Omnicom’s BBDO will continue to work on • Car maker Audi retained BBH London, its AOR for four other Bayer Consumer Health brands. decades, to handle its creative account, following a review Brown-Forman Corporation against Engine. BBH will collaborate with the brand’s new • Spirit company selected global advertising agency, MDC Partners’ 72andSunny and Energy BBDO as its global creative AOR for the majority of its Amsterdam office, as well as Audi’s media AOR, PHD. its global brand portfolio including Jack Daniels, following a review and replacing incumbent Havas’s Arnold. • Boston Beer Company hired The Martin Agency as its McCormick AOR for its Twisted Tea hard iced tea brand, replacing • Spice and seasonings marketer selected incumbent Barton F. Graf, which is closing doors. The Publicis Groupe agencies (Leo Burnett for creative and agency’s “highly relevant, culture-bending work for other Publicis Media for media and ecommerce) to handle consumer-focused brands” was cited as the primary creative and media duties in Europe, Middle East, and reason for the assignment. Africa regions after a review. The agency created a custom unit called Publicis Kitchen. • Hawaiian Airlines selected Interpublic Group of Cos.’ AXA Mediahub (for media) and MullenLowe (for creative), to • Insurance giant hired WPP (Wavemaker for all handle its media and creative duties, following a review geos, except France handled by GroupM) to handle its and replacing incumbents Anthology Marketing Group and global media business, following a review and replacing Publicis Sapient. incumbent Havas. Publicis Groupe retained global creative duties but will handle media in a few geos. • GSK consolidated its Pfizer consumer healthcare media The Lufthansa Group business (estimated at $400+ million with brands including • Airline conglomerate selected GSK’s Sensodyne, Voltaren, and Panadol, and Pfizer’s Mindshare as its new global media AOR after a review, Advil, Centrum, and Caltrate) under Publicis Media without replacing 20-year incumbent GroupM. The agency will a review, replacing incumbents WPP’s Mindshare and handle work for the flagship brand and other brands, Dentsu Aegis Network. The work will be handled by the including Austrian Airlines and Swiss Air Lines. bespoke platformGSK entity launched by the Groupe last year after winning the media account.

9/12

agencies like Translation, Alma, Rogers Townsend, Fluent Help Guide: WHITE PAPER / BEST PRACTICES GUIDE The most common challenges include overly manual, labor intensive processes between marketers and their agencies 360, and others. Both long-term partners—The Marketing How to Successfullythat are slow, too cumbersome,Secure or simply Funding consume too many for resources. Your Ultimately, those get in the way of productive relationships and strong business Someoutcomes of these at times benefits where are resources more tangible are limited than othersand expectations and therefore are easier greater to describethan ever. in quantifiable terms, but all of Agency ManagementIdentifying and documenting Software thesethese pain benefits points orhave Solutionsinefficiencies a direct impact will onhelp the establish marketing a strong function. case for change and continued Arm and DDB—will continue to collaborate with media improvements using agency management software solutions.Here is an example: By: Bruno Gralpois Author/Speaker, Thought-provocateur, Client/Agency Guru, Entrepreneur, ImprovementInnovator Opportunities AOR, OMD. Challenges/Pain Points Implications ImprovementHere Opportunities is an example: Standardized and automated Software solutions dedicated to betterLack of managingeffective agency or consistent activities are Excessiveincreasingly re-briefing, common excessiveas brand use advertisers lookStandardized for and automated solution solution to improve input briefing Expected Business Impact more systematic and automated waysclient to inputenable briefing and foster these importantof agencypartnerships, resources, anywhere poor guidance from roster, scope,to improve input briefing quality and quality and consistency CKE Restaurant Holdings briefing, and training to performance management. Although where the orresponsibilities output lie varies widely within• a Improvedgivenconsistency client work output quality as measured by the number of creative rounds • (which owns Carl’s Jr and Hardee’s organization (Marketing Ops, Procurement, or Agency Relations), the need to secure support and funding for theseand client types satisfaction of solutions remains universal. • Efficiency gain by reducing the amount of agency time and resources involved franchises) selected MDC Partners’ 72andSunny as its Articulating benefits in repeat briefings and poor guidance As such, we’ve identified common bestThese practices improvement on how to opportunities manage this process should successfully,then be expressed as highlighted in terms• Improved in thisof their guide: tracking business and impact. reporting Benefits of briefing are activities by senior management commonly organized around the following pivots: • Improved transparency and visibility into ineffective teams by analyzing Contents briefing changes through versioning control creative AOR, replacing incumbent Havas and returning to its Effectiveness: improving Marketing’s ability to produce higher-quality work that performs well. Defining needs...... 1• Productivity gain by reducing the number of hours by marketer required to Efficiency: driving cost savings or contributing to cost avoidance. brief and re-brief agencies Articulating benefits...... 2 former creative partner from a few years back. Productivity: reducing manhours required to complete certain tasks and activities. Getting buy-in Getting buy-in...... 3Teamwork: improving team collaboration and output. Once the benefits to the organization have been carefully defined and documented, it becomes equally Justifying ROI...... 4Transparency/trust: improving visibility and data integrity. being requestedimportant by the to organization. seek internal Therebuy-in are by oftenhaving majormany legitimate stakeholders priorities express theirbeing supportpursued forinternally. the improvements Only those with Addressing common objections...... 4Improved decision-making: providing timely access to actionable data for better decisions. • Volkswagen Group-owned luxury brand Audi selected the highest level of support are likely to receive full support and funding. The buy-in is often captured in forms such as Implementing for success...... 4email endorsements provided as additional documentation by the project sponsor. 72andSunny for a global campaign. The brand will Accessing other relevant whitepapers from AMS...... 5Agency Management Contact Information...... 5! Improvement OpportunitiesThe ultimate marketing enabling function. Implement continue working with San Francisco-based Venables Bell Why Customer What Here is an example: Standardized and automated Address success Endorsements The CMOsolution to improve inputData analyzer& ROIbriefingJustify Enabledthe objections by agency management Receive the ROI quality and consistencyjourney orchestrator competencies that... & Partners, its creative AOR in the US. imperative “Our teams have repetitively expressed concerns about the quality of the Articulate the buy-in Growth the bene t briefing De ne accelerator Improve planningprocess. and guidance Our agencies have formally provided feedback in our last the need performance review that the quality of the briefs has a direct impact on their Brand Leadership Improve output quality & performance ability to operate efficiently and produce the type of quality work we demand • Skin care company Beiersdorf expanded its relationship Efficiency protectorBrand Effectiveness Improveof them. readiness We & accountability see great value in standardizing our scoping and briefing practices Defining needs using online templates and an online repository of submitted briefs for easy Agility optimizer Budget Make more effective use of resources The discipline of AgencyTalent Management is an increasingly critical supportaccess function and reporting. to effective I highly supportmarketing. this The project as I see this as a great with WPP (a WPP team comprising Wunderman Reduce waste & ineﬃciencies Marketing organizationGrowth benefits from having automated processesopportunity and resources to provide at their our teamfingertips with the to tools manage they need to do their job most

Innovation Foster stronger team (internal and external) driver effectively.”

Talent their work relationship with their agencies. Agenciesassembler benefit as well fromcollaboration more efficient— North ways toAmerica interact Division with Leadtheir client Thompson, German agency thjnk and the WPP Health teams, share information, or collaborate. And client senior managementProvide better accessmust & increasinglyuse of talent rely on actionable data to make more informed and timely decisions that impact the efficiencies and productivity ofHow their internal and external organizations. 1/5 to learn more “As your agency partner, it’s clear that we would360 operate far more effectively Brief

Scope 425.999.3992 if guidance improvedToolset during the initial briefing process. NoRoster more guess work

Practice), selecting the holding company as its global & Training evaluations or failed expectations due to poor briefing.onboarding Strong and more consistent briefs performance

management management management allow us to start our work with a strong foundation, improved clarity of goals, | Contact us at www.agencymania.com or call us at communications partner for its Eucerin and Hansaplast/ and, in the end, would prevent us from wasting valuable time and agency resources when those are already so scarce.” — Account Supervisor, Agency A | Contact us at www.agencymania.com or call us at 425.999.3992 to learn more

Elastoplast brand portfolios, following a review and | Contact us at www.agencymania.com or call us at 2/5 replacing incumbent Wunderman Thompson, which was 425.999.3992 to learn more lead digital agency for that business. It also appointed Publicis Groupe as the global agency and “marketing transformation” partner for its Nivea brand, following a 3/5 review. Publicis Groupe created a bespoke unit called “One Touch” to handle the account across 40 markets. • Make-A-Wish, the organization that fulfills wishes for children with critical illnesses, selected Publicis Groupe and its agency Team One as its new brand AOR on a pro- bono basis. • Global commerce platform Groupon chose Omnicom’s TBWA\Chiat\Day New York as its global creative AOR, replacing incumbent O’Keefe Reinhard & Paul.

10/12

Client Incumbent Change/Scope Focus Area New Agency Review?

Anheuser-Busch FCB Chicago Brand Global Wieden + Kennedy N InBev

Applegate Creative U.S. Terri & Sandy Y

Audi BBH London Creative Global BBH London Y

Global Venables Bell & Audi Creative (except 72andSunny N Partners U.S.)

Global AXA Havas Media (except Wavemaker Y France)

AXA Havas Media France GroupM Y

Strategic + Bayer BBDO Global MullenLowe Y Creative

Beiersdorf Marketing Global Publicis Groupe "One Touch" Y

Wunderman Beiersdorf Communications Global WPP Y Thompson

Boston Beer Barton F. Graf Brand Global The Martin Agency N Company

Brown-Forman Arnold Creative Global Energy BBDO Y Corporation

Bush Brothers & Doner Strategic Global Carmichael Lynch Y Co.

CKE Restaurant Havas Creative Global 72andSunny N Holdings

O'Keefe Reinhard & Groupon Creative Global TBWA\Chiat\Day New York N Paul

Mindshare and GSK Dentsu Aegis Media Global Publicis Media N Network

Anthology Marketing Hawaiian Airlines Media Global Mediahub Y Group

Hawaiian Airlines Publicis Sapient Creative Global MullenLowe Y

US/EU/ Kimberly-Clark WPP Creative Middle Accenture Interactive, Droga 5 N East/Africa

Kraft Heinz Creative Global Gut N Company

Make-A-Wish Brand Global Team One N

11/12

Client Incumbent Change/Scope Focus Area New Agency Review?

Marks & Spencer Mindshare Advertising Global NMPi N (M&S)

Carribean/ Marriott Social Media Latin Alma Y International American

Strategic/ McCain Foods Global Smith Brothers Y Creative/Media

Europe/ McCormick Creative Middle Leo Burnett Y East/Africa

Europe/ Media + McCormick Middle Publicis Media Y ecommerce East/Africa

Pinterest Giant Spoon Media Global Mediahub Y

Pinterest In-House Creative Global 72andSunny Y

RE/MAX Carat Media Global Tombras Y

Dentsu Aegis Sephora Media Global Y Netowrk

State Farm DDB Chicago Creative Global The Marketing Arm N

The Lufthansa GroupM Media Global Mindshare Y Group

Y&R (now part of Advertising + US Navy U.S. Y VMLY&R) Marketing

Zillow Deutsch Los Angeles Creative U.S. Fig Y

Disclaimer: The AMS Monthly Industry Update is a summary and analysis of newsworthy agency/client developments picked up in recent trade related publications and news media. 12/12