THE KINGS OF MADISON AVENUE: John Wren - In the first of a series of interviews with the top names in US advertising, Caroline Marshall talks to the new head of Omnicom

For all the marble in the lobbies and the elegant offices in the

skyscrapers, the notion of the larger-than-life American adman - part

entrepreneur, part salesman, part creative genius - has fallen victim to

some of the same insecurity that haunts his UK counterpart.



Spend on other communications has grown, retailers have gained greater

bargaining power, new technology and digital communications have cast

doubt on the effectiveness of mass-market advertising, and media has

grown massively in importance.



At the top of the US advertising conglomerates, surveying their empires

and battling with these burning issues, sit the kings of Madison Avenue:

Omnicom's John Wren, Grey's Ed Meyer, Interpublic's Phil Geier, Young &

Rubicam's Peter Georgescu. Their job is to think big; to think

long-term; to display the diplomatic niceties owed to shareholders,

agency managers and clients; to control margins; and to kick the tyres

of potential acquisitions before their rivals.



John Wren has been chief executive of the 11-year-old advertising

conglomerate, Omnicom, since January 1997. It includes BBDO Worldwide,

DDB Needham Worldwide, TBWA International and Diversified Agency

Services - a collection of marketing services and specialist advertising

companies.



After undergraduate and MBA degrees from Adelphi University, Wren

started at Arthur Andersen as a management consultant before joining

Norton Simon and then Needham Harper Worldwide. We meet in his office at

Omnicom's Madison Avenue HQ - a sparse room for someone who commands a

basic salary of nigh on dollars 2 million a year. A few classically

inspired pictures adorn the walls but there is none of the modern art

that distracts visitors to Geier's cavernous lair at Interpublic, nor

the Ralph Lauren homeliness of Georgescu's office at Y&R.



Big - very big actually, he is over six feet tall and of solid Irish

stock - Wren plunges straight into his views on the role of the

advertising holding company. Big brother or best friend to his

agencies?



'Ours is a passionate holding company that is interested in the

independent development of the brands we have within the group, while

Martin Sorrell at WPP has installed a director of strategy, a director

of information services, a director of corporate procurement - all have

an influence on operating issues within his companies.'



He illustrates his point with an example: where Sorrell hired someone

from British Airways to mastermind procurement, Omnicom formed Strategic

Alliance Services in 1996. 'They have to come up with group purchasing

ideas for everything from real estate to airline tickets,' Wren

says.



'Our companies are not required to do business with other group

companies just because they have a common parent.' In such subtleties

lie the differences between Omnicom and its closest rival: 'Within clear

financial guidelines, we motivate people with carrots, not sticks, '

Wren says.



It is a successful formula - 1996, the last year for which figures are

available, saw Omnicom post its tenth consecutive year of record

revenues, net income and earnings per share. Revenues rose from dollars

2.26 billion to dollars 2.64 billion. Net income increased 26 per cent

to dollars 176.3 million in 1996 from dollars 140 million in 1995.

Earnings per share increased 22 per cent to dollars 2.25 per share in

1996 from dollars 1.85 per share in 1995. The Wall Street Journal ranked

Omnicom number one in the advertising industry, based on returns to

shareholders. In 1997, Fortune named it the most respected advertising

group.



The architect of all this was Wren's predecessor, mentor and closest

advisor, Bruce Crawford. A previous chairman of BBDO Worldwide, Crawford

took time out in 1985 to run the New York Metropolitan Opera. After

three-and-a-half years orchestrating its finances with great success, he

returned as chief executive of Omnicom from 1989, becoming chairman in

January last year.



Crawford ran Omnicom as a group of independent operating units, selling

off the pieces that didn't fit or were losing money, and jettisoning

lofty but largely unworkable ideas of synergy through

cross-referrals.



Above all, he endeared himself to his managers with a belief that a

business should be creatively led.



Wren, who is reported to have kept his distance from the advertising

networks, is a very different creature. His views are more driven by

market invective than creative sensibilities.



Insiders suggest that Allen Rosenshine (the chairman and chief executive

of BBDO Worldwide) and Keith Reinhard (chairman of DDB Needham

Worldwide) were opposed to Wren's elevation. Their invitation to

Crawford to return from the Met to take over from Rosenshine (who wanted

to return to his agency roots) bears testimony to a view of Wren as the

barbarian at the gates.



Other Omnicom insiders mutter about Wren as 'the tough guy who used to

run a bowling alley'. This is not strictly true: one of Wren's private

ventures was a roller-skating rink.



Wren and Crawford are chalk and cheese in background and approach.



Crawford, in his late sixties, is the cosmopolitan, cultured adman who

made his name running BBDO and building up its European network. Wren,

in his mid forties, is a more abrasive character who cut his teeth at

Needham Harper Worldwide, then sharpened his reputation as a dealmaker

and imaginative financier when he built Diversified Agency Services,

where he is still chairman and chief executive. However culturally out

of synch the pair may seem to outsiders, they function well as a team.

What's their secret?



'The strategy that we developed in the late 80s was based on our view of

what clients wanted,' says Wren. 'Everybody was talking 'whole egg' (a

phrase coined by Y&R to denote offering a range of co-ordinated services

through its subsidiaries) and all that nonsense, but we felt that

clients should not be encouraged to buy services simply because the

holding company chose to assemble them. We got into areas that were out

of favour - PR, sales promotion and direct response - we found the best

companies and made them part of our family, without being subservient to

any other member. Our growth was not driven by a sharp pencil and a keen

deal, but by clients - we enjoyed their success.'



In the past year and a half, Wren has bought significant minority stakes

in six of the brightest US online agencies. Shops with names like

Agency.com, Razorfish and Think New Ideas now operate under the

Communicade umbrella.



Given that paid-for media advertising is growing at less than 5 per cent

a year, where will growth come from? 'That's a curious question,' Wren

retorts, 'and one over which people get tangled up in their own

underwear.



I'm convinced that advertising groups still have growth potential. About

55 per cent of our revenue, and roughly the same of WPP's, comes from

advertising. However, 20 per cent of WPP's revenue is coming out of

Asia, and only about 1 per cent of ours, so in the developing markets we

still have growth potential. The biggest market has potential for us

because our biggest competitor has penetrated it.'



Media is an area for which Crawford is still principally responsible,

although Wren has his own strong views which preclude any ambitions to

get into media ownership. Unprompted, he points to Carat as a model of

excellence: 'In four or five years, there will be three or four

world-class media brands, and then there'll be everyone else. People are

looking at Carat, viewing it as the more advanced, and Carat is

leveraging the research tools that are its point of difference.



These tools will become the minimum standard for entry into the pitch of

the future and the three or four big players will neutralise Carat's USP

very shortly. The new tools will include media choice and creativity,

proprietary planning processes and with that you will still need buying

clout. The bigger will get bigger, but not necessarily through being

forced into the same buying corral. You could have virtual co-operation

as opposed to a military-style organisation.'



It is a big vision, and one that Omnicom's existing media arrangements

may lend themselves to. These consist of the Media Partnership (a joint

venture between BBDO, DDB and the American WPP agencies) and Optimum

Media Direction (the media brand for BBDO, DDB and TBWA in Europe).



In a deal similar to Sorrell's more recent investment in the CIA group,

Omnicom bought a stake in Aegis in 1993. By 1996, it had sold the shares

and Crawford had stepped down from his position on the Aegis board -

though not without picking up insight into the workings of a media

independent and keeping competitors out of the frame for a while.



Does OMD exist in the US? 'Not yet,' says Wren. 'So far in the US,

clients have not unbundled their media as they have in Europe.

Historically, it has always been ratecard-type business as an add-on to

the advertising mission, so there was little motivation to

unbundle.'



That said, he confirms that Omnicom has experimented with splitting

media from the creative process by setting up, last year, a media

operation called PentaMark for Chrysler. And he has watched Procter &

Gamble's recent record consolidation of dollars 1.2 billion worth of

media into TeleVest with interest: 'We (in the US) may all sit back and

view the day P&G unbundled media as the day the bell went off for a

change in activity,' he says.



What does he make of WPP's MindShare? 'We're still partners in TMP,

despite the arrival of MindShare, and I expect that to continue,' he

says. 'I see MindShare as WPP's move to try to enter the same space that

we will all have to enter in a couple of years. Our process will take a

little longer, require more explanation and not make great headlines,

but the end result is that both are right. I don't believe for a second

that Martin Sorrell can't get to where he wants. I like and respect

him.'



Next, acquisitions. Despite a buying spree that began in the 80s (the

list has included Goodby Berlin & Silverstein in 1992, TBWA

International the next year, the WWAV Group in 1995, Manning Gottlieb

Media and Simons Palmer last year) Omnicom has very deep pockets.

Competitors want to hear what's next on Wren's shopping list.



'If a sensible acquisition came along for TBWA , we'd be interested,' he

says. 'We have a lot of markets where TBWA has room to grow. BBDO is far

more developed, although we could be stronger in Japan and Italy; DDB is

similar to BBDO, in that it's represented pretty much everywhere.



There's also plenty of work to do in PR, which represents 12 per cent of

the business, and in direct response, which represents 10 per cent.'



Then there are the minority interests, including Abbott Mead Vickers in

which BBDO has 26 per cent. 'If the financial requirements could be

met,' hints Wren, 'we would be interested in moving forward in some of

our relationships.' This, of course, is music to Peter Mead's ears.

However, it is a big 'if' -AMV's share performance would have to dive

for the numbers to warrant a bid from Omnicom, and veiled compliments

like this will only enhance AMV's value.



Of the three networks, TBWA looks most in need of some acquisitions.



It has its creative highlights, but as a global advertising brand it is

still a pale imitation of BBDO and DDB. What's Wren's masterplan? 'My

objective is to get TBWA to a level comparable with the larger groups.

We're not searching for size as much as quality, and the skeleton is in

place. TBWA has a larger percentage of network clients going through

multiple offices than some of the larger groups, and the Chiat Day

merger is bonding - its position on the Levi's pitch is a testament to

this. We are ready to support organic growth or spot an

acquisition.'



And so to the delicate topic of succession. For a decade, Omnicom has

been run by a largely unchanged team that intimately understands each

others' skills and weaknesses: Crawford, Wren, Rosenshine, Reinhard and,

latterly, Bill Tragos of TBWA. But, with ages of 68, 44, 58, 62 and 62

respectively, they are surely not going to be a team for much

longer.



Also, the group is looking for a finance director to replace Fred Myer,

who is due to retire soon.



'We have not appointed anyone in those companies as clear successors,'

Wren says. 'We want to promote from within, although my gut says that

will only be possible in two out of the three groups.' The challenge of

creating a new top team after a decade of enviable management stability

may prove to be Wren's toughest one yet.



- This interview ran in January 1998. Omnicom is now the world's third

largest advertising group behind Interpublic and WPP. Jean-Marie Dru is

now the CEO of TBWA Worldwide and Randy Weisenburger has succeeded Fred

Meyer as Omnicom's chief financial officer.



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