Interview: Jean-Philippe Maheu, Chief Digital Officer, Ogilvy: 'Frenemy' Explained; Data And Stories
This story was written by David Kaplan.
For the past year, ad agencies have been trying to find the best way to consider their individual relationships to Google (NSDQ: GOOG). With the internet search giant's $3.1 billion merger with display specialist DoubleClick completed last week, the choices to view Google as friend, foe or, WPP Group CEO Sir Martin Sorrell's term, "frenemy," seemed to became more stark. But Jean-Philippe Maheu, who became WPP shop Ogilvy North America's first chief digital officer around the time the merger was proposed last April, feels that much of the industry's hand-wringing and trepidation that has been building against Google has been a bit much. Overall, working with Google is a fact of life for every major agency at this point; it might just be best to see how the industry can harness the company's increased power to better serve their clients.
Maheu, a former CEO of Razorfish, and I spoke at the McGraw-Hill Media Summit. Maheu spent six years at Razorfish, retiring in 2003 after guiding the sale of the company to SBI (which itself was acquired by aQuantive in 2004; ultimately, aQuantive was bought by Microsoft (NSDQ: MSFT) last year for $6 billion). In addition to discussing Google, Maheu also talked about the importance of traditional creative disciplines, AOL's (NYSE: TWX) recent troubles, as well as his outlook on ad spending for this year. More after the jump.
-- The nuances of "frenemy: "Let's be clear: the completion of [the Google/DoubleClick merger] was something we expected. Number two, Sir Martin's quote - "frenemy' - was probably taken a bit too far by people in the press. I really felt that Sir Martin was exploring the meaning of what Google's position in the marketplace means. Google and DoubleClick have been partners with Ogilvy for a long time. Half of our clients are on DoubleClick ad serving platform and obviously, we're buying a lot of media from Google, in the form of keywords. So both continue to be key partners to Ogilvy - as are Yahoo (NSDQ: YHOO) and MSN. From an industry dynamic, it's going to be interesting to see how Google can leverage the data that DoubleClick has and combine that with the search data to further optimize the display media. If they can further enhance the return on investment for our clients, we will continue to work with them."
-- Marrying search with storytelling: Digital advertising has largely been focused on search, while traditional advertising has been about condensing a narrative about a product into a 30-second TV commercial, a page in a magazine or newspaper, or a billboard. Among Maheu's goals when he took the job at Ogilvy last year was to bring the art of storytelling to interactive advertising: "One of the key things we're working on is how to engage with Yahoo, Google and MSN in a way that is creative, unique and that is a bit more strategic than just buying media."
-- Freeing digital: In order to make that goal a reality, Maheu helped free digital advertising from being housed in its own distinct area, like print or TV or out-of-home. At Ogilvy, digital is no longer a department; it's no longer a different unit. "[Digital touches] everything we're doing, from advertising to PR, to direct marketing to promotion.
-- Offerings and capabilities: Apart from joining the analytic side of digital advertising and the traditional creative methods, goal number two centers around Ogilvy's offerings and capabilities. The questions the agency faces: "What do we need to strengthen, what do we need to grow, who should we partner with to access expertise we do not have in house? In addition to the locking and tackling of interactive media, we have recently invested a lot in social media, mobile and gaming." More investment is needed and expected, though Mahue declined to offer specifics.
-- Digital ecosystem: Securing its relationships with Google, Yahoo and Microsoft is also viewed as critical. "If you've been in the space for sometime, you realize there's a digital ecosystem. One of our goals is to make sure that Ogilvy is in that ecosystem and ensure that when Google, Yahoo, MSN develop new products or services, they contact us early. And that the startups, where a lot of innovation occur, when they have a good idea or product or service, they call us first." This is already the case, Maheu said, but the point is not to take these arrangements for granted or allow other agencies to out-flank them in these kinds of partnerships.
-- On AOL: When we spoke, AOL had just ousted the president of Platform-A and installed an AOL veteran. The move occurred after the AOL execs expressed dissatisfaction with the slow pace of bringing the various ad units together under Platform-A, which was formed in September to house all various digital ad acquisitions that were made in 2007. Maheu's interpretation of events: "What happened was that they've bought a lot of companies with different technologies. And as most people know, integrating technologies is not easy. Aside from the technology, these companies, in some cases, had different pricing systems. Quigo had different pricing than Tacoda than Advertising.com. But when you unify the technology, the ad serving, the ad optimization systems, that's one part; you then have to unify the ad sales teams and the process and pricing. That's a lot of work."
-- Creeping tentativeness: Every day brings more depressing economic news. And the words "ad" and recession have appearing with increased regularity. But so far, Maheu said he hasn't seen any mass pullback from advertisers yet. "Looking ahead at the digital space, is it going to grow as much as 2006 or 2007? Probably not, but it has to do with the law of large numbers. As you get to a $20 billion industry, as we did in 2007, growing at 28- or 29 percent becomes difficult, but not impossible. There is definitely a bit of tentativeness you get that feeling just from reading the news." Meanwhile, Maheu can point to one bright spot: Ogilvy's digital business should gain from the summer Olympics: "[PC maker] Lenovo is a large client of Ogilvy's and is a key advertising partner for the Olympics. So, yes, we expect the summer Olympics to boost digital ad spending."
By David Kaplan