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
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
’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
’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, ’
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
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
Above all, he endeared himself to his agency managers with a strong
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 adamantly opposed to Wren’s elevation. Their invitation
to Crawford to return from the Met to take over from Rosenshine (who was
hankering 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
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
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
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
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
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 very interested in moving forward in some
of our existing 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 for his
’My objective is to get TBWA up to a level comparable with the larger
groups in the world. We’re not searching for size and mass as much as
quality, and I really do believe that the skeleton is already in place.
TBWA probably 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 of
the same creative quality as Simons Palmer.’
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
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.
Next week: Peter Georgescu, Y&R.