BotW: AI winners showing up; How Rob Morgan built a local behemoth; Why Greg Hywood is unimpressed with Nine's management
Welcome to Best of the Week, written on Saturday morning in rainy Evandale, Tasmania.
Today: We’re beginning to see the first local winners in AI; how the tenure of Rob Morgan makes the case for localism; and Greg Hywood on the shortcomings of Nine’s management
Happy VCR Day.
To get maximum value from a paid membership of Unmade, sign up today.
Your annual membership gets you tickets to September’s REmade conference on retail media; to October’s Unlock conference on marketing in the nighttime economy; and to Unmade’s Compass end-of-year roadshow.
You also get access to our paywalled archive.
Upgrade today.
How Rob Morgan took Clemenger Group to the top (and Omnicom dragged it down)
It was another week with a big departure.
If last week was notable for the exit of David Droga from the top seat at Accenture Song after enormous global success, Thursday’s retirement announcement from Rob Morgan was as epochal at a local level.
Some agencies have a few years where they’re fortunate enough to be at the very top. Under Morgan - who has spent 46 years with Clemenger Group, his agencies had much longer.
Back at the end of 2019, Mumbrella named Clemenger BBDO Melbourne as our agency of the decade. We could have said the same thing a decade before too.
Similarly, for many years, as we planned our travel for the roving creative agency jury for the Mumbrella Awards, we’d automatically leave space in the itinerary for a trip to Auckland, on the assumption that Colenso BBDO would be in the running. Usually the jury would then fly on to Melbourne to see Clems. Until recently, anyway.
One of the strengths of the Clemenger Group was that for most of its history - and for its best years - it was a locally run business.
Founded by the late John Clemenger in 1946, even after BBDO took a stake in the 1970s, Clemenger remained under local management, under the leadership of Peter Clemenger and then Morgan who joined the business in 1979 and moved up, until becoming chairman in 1998.
Even the 1986 merger of BBDO and DDB didn’t dilute the local culture, as the newly formed Omnicom still only had a minority stake back then.
An AdNews profile for Clemenger Group’s 70th anniversary nine years ago, captures the business at its peak: 1700 staff across 40 separate businesses, with profits of $41.7m on revenue of $407m .
There may be a clue in those last two numbers, on why the business had longevity, and why it has since gone backwards. They indicate a profit margin of about 10%. Holding companies prefer 20%, which means less to invest in staff and culture.
Since Omnicom moved past majority ownership, a higher profit number has been the priority. When the 2020 accounts leaked, it revealed a profit of $50.5m on $320m - a much more holdco-like 15.6% margin achieved even during the Covid crisis.
Over the years, developing managerial talent was one of Robert Morgan’s greatest strengths. When he had Nick Garrett running Clemenger BBDO nationally and Chris Howatson running CHEP, it was a formidable bench.
In retrospect it was a mistake to promote Howatson to run both groups, as it left the talented Garrett with no obvious route of progression. That was arguably the moment the business went off course. Garrett departed in 2019 and later joined Deloitte (intriguingly, he left that role earlier this year and appears to be back on the market; watch this space).
Then months into Covid, Howatson also walked out - ostensibly to start his own agency although it was an open secret that he was unhappy at staff layoffs forced upon him early in the pandemic.
In the space of little more than a year, the group lost the two people who should have assured its future. It was muttered that in the days when Morgan got to call the shots rather than Omnicom, none of it would have happened.
With Omnicom now about to merge with IPG, and already bringing BBDO, DDB and TBWA together under the Omnicom Advertising Group banner, I wonder what will be left to celebrate of the Clemenger Group brand when the 80th anniversary rolls around in March.
That’s a problem for the coming months. Today, Rob Morgan’s career deserves to be remembered for the heights that can be reached by local agencies.
Hywood’s half century
Speaking of long innings, last night we talked to Greg Hywood on ABC Radio National’s MediaLand. The reason was Hywood’s retirement as chair of Free TV Australia, but the main focus of the conversation was his time at Fairfax Media.
While many journalists still think of Hywood as a destroyer of jobs (1,900 of them), he deserves to be remembered more as the man who (along with Chris Janz’s team) extended the local lifespan of newspapers by an extra decade.
As is the challenge with a half-hour radio show, we could have gone so much longer. It’s worth a listen just for the story of Hywood’s 50-year career, but most noticeable are his comments about the lost opportunities at Nine since they took over Fairfax. Fair to say, he’s unimpressed. As the man who rebuilt Fairfax’s entire business model, he’s better qualified than anybody else to feel that way.
The local AI winners are emerging
Monday’s big announcement of the new Optus roster already feels like ancient history five days on.
There were so many aspects to it - the arrival of Accenture’s media operation, the blow it will inflict on M&C Saatchi, the intriguing comments from UM CEO Anthea Ruys decrying “ongoing industry speculation and rumour throughout the pitch process”.
One underreported aspect of the result was the reappointment of BRX as Optus’s production partner. BRX spun out of Big Red, the Ted Horton-owned creative agency best known for creating the Coles big red hand, and misunderstood for the same reason.
Unlike many agencies, Horton and his team have never been in denial about the havoc being wrought upon business models by generative AI. Horton’s philosophy has always been to offer clients what they’re asking for.
BRX co-founder Marty Hungerford wrote on LinkedIn this week on what he described as the best day of his professional career: “We came to the realisation that AI and automation would change everything. We decided to go ‘all in’ and have seen the benefits not just for our business, but for our clients.”
I was in the buzzing Big Red and BRX office in Melbourne this week. Noticeably, BRX is now the bigger business.
I’m not surprised that BRX are among the leaders when it comes to helping brands operationalise their use of AI in their creative material. In the three times we’ve run the HumAIn conference since ChatGPT arrived, they’ve been at the heart of the agenda.
Other agencies are catching on, and HumAIn turns out to have been the place to have seen the new wave of AI-first executives come through in what I now realise has been an emerging community. It reminds me a little of how it felt to be part of Social Media Club Sydney 15 years ago.
Last month Lucio Ribeiro joined TBWA as chief AI and innovation officer. This week Vijay Solanki emerged as an associate in Clive Dickens’ new AI-led consultancy Meliora.
The two of them co-hosted this year’s HumAIn.
Ben Cooper has also played a big role in HumAIn lineups. Yesterday he was named global executive director of R/GA’s AI products team.
At this year’s HumAIn, I asked our photographer to get a group shot of the audience. I’m so glad I did. I’m starting to realise that it was a snapshot of an emerging community.
In another 15 years, it will be a fascinating exercise to track down where all these people end up.
More from Mumbrella…
Time to leave you to your Saturday.
Because of the public holiday we’ll take a break from publishing on Monday
Have a great weekend
Toodlepip…
Tim Burrowes
Publisher - Unmade + Mumbrella
tim@unmade.media
Under Morgan in the 1990s and 2000s Clems also had a very unique staff shareholding structure which granted shareholding to a large tier of staff and was self financed by Clemenger with the shares as security. A risk free way for staff to share in the profits and it also created a common alignment around why Clems wanted to be profitable. I believe that this structure eventually disappeared.