PHD at twenty
By Ian Darby, campaignlive.co.uk, Friday, 19 February 2010 12:00AM
It launched on the first day of the last bad recession and fostered a unique spirit of entrepreneurialism.
It started 20 years ago with Jonathan Durden in a phone box on Drury Lane. If he was looking slightly shifty it was because he was still employed at the time as the joint media director of WCRS but was booking media space for PHD's first client, The Guardian, which had shown great faith in appointing the agency two weeks ahead of its official launch.
While The Guardian's faith in the agency has been steadfast (it remains a client 20 years on), its support in 1990 meant that Durden, and his fellow founders David Pattison and Nick Horswell, had immediate momentum behind them. PHD, part of a "second wave" of independent media agency launches alongside the likes of BBJ and Manning Gottlieb Media, was to leave an indelible mark on the UK media scene and boldly took the responsibility of inventing "creative media" based on being paid for the strength of its planning insights.
The decision to launch the business was, in part, precipitated by the creation of Zenith Media two years earlier. In contrast, PHD, and the other independents of the time, aimed to pick up business from a variety of clients and advertising agencies and looked to prize strategy above buying clout.
PHD's founders began talks at a time when their careers in agencies were at a crossroads. Durden and Pattison were the joint media directors at WCRS, which was about to consolidate its media operations with those of other agencies, while Horswell was growing tired of his role as media director at FCO.
Durden and Pattison had worked together for several years while Durden had earlier worked with Horswell. They were brought together by John Ayling, who had founded his own agency in 1978, and was keen to invest in the new wave. Over dinner at Ayling's house the plan to launch PHD was formed and the three founders soon realised that their initials would create a brand name that would make them stand for cleverness in a media market conspicuously lacking this as a selling point.
Despite launching in a tough economic climate it seems market conditions favoured PHD's positioning. Durden says: "Our business plan and ethos was that the whole market was reacting to the Zenith creation and pitches were about centralisation and buying muscle. Yet media was becoming interesting - we'd seen the dawn of Sky, magazines were launching all over the place, colour was coming into newspapers so the possibilities for creativity were growing."
The agency launched with a staff of seven, one of whom - Kate Corbett, now Kate King - has remained at the agency throughout and today is its human resources director. PHD grew by developing relationships with several new ad agencies (including Duckworth Finn Grubb Waters, Leagas Shafron Davis, and Chiat Day) that were looking to work with media partners in new-business pitches.
Its big break came seven months later when it landed the Midland Bank media account, a piece of business that was responsible for around 70 per cent of its income. Ayling had come on board as an investor, putting £100,000 into the agency in exchange for a 20 per cent stake. He also supplied back office support which was to prove vital for the young start-up.
However, it was the blend of talents possessed by the three founders that really made PHD stand out in the market. As Ayling puts it: "David and Jonathan were totally complementary - David as the engine and Jonathan the creative genius. One was totally disciplined, the other one not particularly disciplined at all. Nick was really the businessman."
Horswell, several years senior to Pattison and Durden, adopted his "helpful uncle" persona early on in the partnership - providing the gravitas and strong business sense that supported the agency. Pattison described him in a Campaign piece some years ago as "the glue that held everything together, kept everybody's feet on the ground and looked after the financial health of the business".
In the early years, the agency was to suffer few setbacks and grew by winning new business from the likes of the Prudential and the BBC. Its standout work included activity for The Guardian, which saw it book every ad break on the Capital Radio Breakfast Show which were filled with short comedy routines. Today this would be called advertiser-funded programming. Key appointments included Tess Alps, the ITV sales director, as its broadcast director, and Alps was to prove vital to PHD's evolution of content product through its Drum PHD arm.
Durden, who Pattison says "was the architect of PHD in our independent years - he had the ideas and I was good at making them happen", believes that the PHD culture stood out from day one. He says: "We were all in touch with our feminine side. All the companies in media tended to be about testosterone and muscle flexing but our company was much more feminine in its style and we attempted to make sure that there was integrity and loyalty running right through it."
It also had a history of employing women in senior roles (Alps and the future chief executives Morag Blazey and Philippa Brown stand out).
Six years into its life, however, the first test of the PHD culture was to emerge when the founders decided to sell the business to AMV plc, the Stock Exchange-listed parent of Abbott Mead Vickers. The deal was done for a reported £5 million payment plus a subsequent earnout. However, the threat to the PHD ethos was palpable. Durden recalls: "It was very difficult to bring the pieces together and over time most of the AMV people left quietly. But we sold because they were our kind of people and we felt that AMV was such a class act."
However, the decision to sell was not unanimous among shareholders, with Horswell handed the task of convincing a reluctant Ayling, still sitting on a 20 per cent stake. Ayling says: "They decided they wanted the villas and the Ferraris earlier than I might have wanted - I think they could have delayed for another two or three years and made more of it. I didn't think the offer was good enough."
With Ayling's share bought out, the founders continued to build the agency through a merger with the AMV media department. As part of the deal AMV's media chief Ken New came on board as chairman and the agency was rechristened New PHD.
PHD's founders felt that the deal would enable them to compete with the scale and resource of the larger groups and the logic seemed spot-on when AMV's client list welcomed the move and PHD became a top-five media agency with billings in excess of £260 million. And the merger created an agency that was named Campaign's Media Agency of the Year in 1998.
The late 90s seemed to have been characterised by a period of increased entrepreneurialism from PHD as its founders worked towards their earnout with launches including its PHD Compass regional media joint venture and "media hotshop" Rocket. The last year of the 90s also saw PHD become part of Omnicom following AMV's sale to the group - a move that was to have significant implications for the growth of the PHD brand.
While Omnicom launched the PHD Network in 2000 by rebranding media agencies in the US and Canada, the agency faced some painful moments closer to home. Will Collin, John Harlow and Jon Wilkins, three key members of its management team, left to launch Naked Communications, which seemed set to inherit PHD's mantle as the most prominent creative communications agency. Though it was a blow, Pattison says: "We always tried to encourage entrepreneurialism so it was hard to complain when our people turned out to be entrepreneurs."
With the end of the AMV earnout looming there were to be further changes with the imminent departures of New and Horswell, the first of the original founders to leave the agency. Despite this and the loss of the Naked founders, PHD still had leadership talent in the shape of Alps and Blazey although there were suggestions that the remaining founders, Pattison and Durden, were becoming less engaged with the business.
In Pattison's case this was understandable given that he was playing a key role, as chief executive of PHD Worldwide, in attempting to build PHD as a network for Omnicom. For his part, Durden's reputation seemed to become one of a brilliant occasional performer for the agency rather than its driving force. However, with strategists such as Mark Sherwood, Jonathan Fowles, Mark Holden and Chris Stephenson emerging throughout the decade, PHD continued to develop talent and produce strong work. Highlights included its involvement in 2001 activity for Bradford & Bingley that saw The Independent become the first newspaper to publish with no advertising, the 2003 placing of a 90-second Adidas ad featuring Johnny Wilkinson and David Beckham on Sky's "red-button" service and 2007's outdoor ad for Yell, the first to use GPS technology, which won at D&AD.
This work helped to underpin PHD's "pioneering" positioning but there were struggles in the noughties. Launching the network seemed hard work - despite a strong operation in the US, it wasn't until 2005 that Omnicom really backed Pattison with a decision to build the network in Europe and Asia. Following Pattison's decision to leave PHD in 2007, Omnicom brought in Mike Cooper, who had an established track record of building a network presence at OMD in Asia, as PHD's worldwide chief executive.
Ironically perhaps given its strong domestic heritage, Cooper's first challenge was to address an inconsistent UK operation that, despite being named Campaign's Media Agency of the Year in 2005, seemed to be losing confidence and business as well as key UK leaders such as Alps.
To the credit of Cooper and his UK team, headed by the chief executive, Brown, and the managing director, Daren Rubins, the domestic business seems to be on a strong footing and its network has 70 offices around the world.
The agency's major contribution when it launched was to focus on strategy, planning and creativity at a time when media was becoming a commodity. And Durden believes that at least some of the original spirit remains. He says: "It was a place that attracted talent. It's now a very different company that needs to find its own DNA but it's in very good hands and the remains of the blueprint are still there."
Brown says "planning principles" continue to underpin PHD's proposition and, with outstanding work for the likes of Cadbury and the British Heart Foundation, Rubins argues that PHD remains a "different kind of agency ...
grounded in strong planning credentials with an appetite to challenge clients, media owners and content providers to think differently".
The maverick ideas may have been toned down for a less colourful age, and for some this will always seem a shame, but, whatever your views, there's little doubt that PHD rounded off its first 20 years in style with the capture of the $450 million Unilever media account in China. This represents ambitions of geography and scale, if not creative brilliance, far beyond that phone box in Drury Lane.
February 2000: Pattison Horswell Durden launches with The Guardian as its first client and a staff of seven.
1993: PHD launches Drum, the agency's sponsorship and content arm.
1996: The agency is acquired by AMV plc and is relaunched as New PHD following the merger of PHD and AMV Media and the resulting appointment of AMV's Ken New as chairman.
1997: Rocket, PHD's sister agency, is launched as a conflict shop with a "creative media" positioning.
1998: PHD is named as Campaign's Media Agency of the Year.
2000: Three of New PHD's management team (Will Collin, John Harlow and Jon Wilkins) leave the agency to launch Naked Communications. PHD Network is launched as an Omnicom brand and the chief executive David Pattison takes on the task of building this international presence.
2002: Nick Horswell is the first of the three founders to leave as he quits to launch his own business consultancy, Uncle.
2005: Roll-out of PHD's network in Europe and Asia begins. The agency, which has reverted to its original name (New had departed in 2000), wins Campaign's Media Agency of the Year again.
2006: Pattison announces he is leaving. He re-emerges the next year as chief executive at i-level. The chairman, Tess Alps, also departs to join the trade body Thinkbox, leaving the running of the agency to the chief executive, Morag Blazey.
2007: Jonathan Durden decides it's time to call it a day as he joins the creative agency Miles Calcraft Briginshaw Duffy. Mike Cooper, the chief executive of Omnicom Media Group Asia, is the new PHD Worldwide chief executive.
2008: Blazey resigns as the UK chief executive and PHD kicks off a search for a new boss, only to hand the role to Philippa Brown, the UK chief executive of Omnicom Media Group, who combines the two jobs.
2009: PHD continues to diversify under Brown and the managing director, Daren Rubins, with the launch of three business units: DataScience, PHD Direct and Barter@PHD.
WHAT PHD MEANT TO ME
Tess Alps - PHD 1993 to 2006, now chief executive, Thinkbox
"It was founded as a partnership which celebrated three people's very different skills and personalities and produced a magical combination. That partnership ethic enabled the founders to attract, respect and motivate other senior people, some with their own mini-businesses as 'intrapreneurs'. It was a very flat hierarchy and encouraged independent thought. They also created several joint ventures with creative agencies. And the relationship with many clients would be best described as a partnership, not as a supplier."
Jon Wilkins - PHD 1996 to 2000, now global partner, Naked Communications
"My overriding memory was a feeling of freedom and entrepreneurialism. During the period I was there, PHD built second-string, third-string agencies, we launched new services in data, digital, content etc. The frontline pitch team was very strong, and the management vibe was fun. We learnt a lot, and the culture inspired John, Will and myself to launch Naked."
Lindsay Weedon - 2003 to 2009, now chief executive, Maxus
"People make the difference in an agency. PHD recognised this and built a business entirely around talented people and great ideas. Unique individuals who collectively create differentiated media work, that clients bought/buy into. PHD taught me how to pool talent, create the right balance of ideas, skills and personalities, and how leadership and energy from the front drives success for clients. They have always had strong leaders and Philippa (Brown) has taken on that mantle and is an inspiring force. I loved my time there, learned lots and have taken that with me to Maxus."
This article was first published on campaignlive.co.uk
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