This article was originally published by Adweek
In just two years of existence, Omnicom Media Group’s Hearts & Science has become a force in the world of media agencies, scooping up account wins for Procter & Gamble, AT&T, and most recently the $350 million U.S. media account for Amgen.
The shop has expanded to six U.S. locations and 18 global offices from Chile to (soon-to-be) China and Germany to Australia. COO Kathleen Brookbanks said the company is currently competing in three reviews, chasing Macy’s U.S. business as well as two unnamed global reviews.
The rapid expansion led to a whirlwind time trying to find the right talent. “In the first year we had so many resumes that we didn’t know what to do,” Brookbanks said. “We had so many resumes that in the beginning we were afraid that people at other agencies were sending people to find out the story about us while we were consciously trying to keep our story quiet.”
Brookbanks sat down with Adweek at the 4A’s Accelerate conference in Miami this week to discuss the biggest issues shaping the advertising industry, including the #MeToo movement, brand safety, the rise of consultancies, and media transparency. (The interview has been lightly edited for brevity and clarity.)
Adweek: What’s the latest from Hearts & Science? After winning P&G and AT&T, what’s next?
Kathleen Brookbanks: We are moving into our second phase, which is thought leadership. We’ve been able to get all the data platforms and technology platforms that were important to us to be a differentiator truly up and running and making an impact on different clients’ businesses.
In terms of the culture at Hearts & Science, being relatively new, you have the advantage of stopping the toxic culture brought to light during the #MeToo movement. How did the agency make sure it started off on the right foot?
It’s been great to be a new agency because at the outset you don’t have any of the bad behavior. You can make a conscious decision about what you want the culture to be. You have to have a very consistent, open dialogue about it.
What we’ve done is not only have an HR group, we have a chief experience officer, and she’s a part of our board. She has the role specifically of developing culture and what we want to stand for. When we have behavior that is not aligned with our culture, we act on it very quickly, and that sends the message to other people that if [they] signed up for this culture, that it’s actually real. It’s not how we behave.
What advice would you give legacy companies dealing with these problems?
Leadership needs to stand up and say it’s a new day. You can’t just say it, you need to live it from the top down. It takes a degree of courage that is difficult. You have people running big accounts that aren’t good for the company but good for that relationship. In terms of short-term revenue, you may not want to deal with that person [who is behaving badly]. But if you don’t deal with those people, people start to notice.
Having someone own the client relationship is dangerous for agencies. When someone comes in at a high level and they own the relationship, the agency is very happy about that, but you have to remember who you work for. People start giving the client what they want, but that doesn’t always align with what the agency stands for.
How is your agency dealing with the latest brand safety issues with YouTube and Facebook?
Hearts & Science took the most aggressive stance on YouTube and recommended clients pull 100 percent of spend, and they all did it with urgency. We did our first in-house test looking for our clients’ advertising to see where it really was, and we had a fail rate of like 40 percent relative to the content guidelines. It was the frightening kind of content like terrorism. Subsequent research showed 25 percent of people who viewed our clients’ content next to that inappropriate content gave them a negative perspective on the business, and coming out of a negative is a very difficult thing to do.
Big advertisers pulling out from Facebook, quite frankly, doesn’t hurt [Facebook] that much. The bigger issue now is a responsibility to society. It’s much bigger than our business. There’s not widespread awareness among heavy users of this stuff. You can’t control the danger factor right now, and they need to change for their own sustainability. The next generation is going to stand up and say we aren’t going to tolerate this.
Are YouTube’s changes just Band-Aids, or are they significant?
Somewhere in between. They’ve done more than Band-Aids, but I do think the larger problem is still there and it’s a very difficult thing for them to fix. What they have solved is somewhat of a Band-Aid, but enough of a Band-Aid to pull back advertisers.
What is Hearts & Science doing to create media transparency and ensure clients that their dollars aren’t being wasted?
We are now telling our clients that they should be in private marketplaces. So yes, we’re bidding, but we are bidding within a controlled environment. The second thing is that we have ways to manage frequency and this has been a huge issue so that a user doesn’t see an ad 50 times. We’ve created substantial savings by removing the over-frequency that they can then invest back in programmatic to help their bottom line. We’re sometimes finding it can be as much as a third of the budget. That’s not insignificant.
How has Hearts & Science adjusted to the rise of consultancies?
We don’t believe it’s in the best interest of our clients to go into business with consultancies for a few reasons. As long as consultancies are going to stay in this business, the issue of church and state is very, very significant. I equate it to the banking and real estate crash. I think it’s that significant, when you had no separation or you had claimed separation. I’ll use Accenture as an example, but I don’t want this all to be about them, but they are auditing our finances, they are auditing our media pricing and then they are going into the media business with access to all of our media pricing. That is not OK. That is not fair business. They say they have a separation of duties, but I dare say they don’t. I don’t see how that’s in any client’s best interest. But that doesn’t mean they won’t succeed because they are very, very aggressive. If they’re building their practice, they can’t do everything. By definition, they are consultants and they really don’t know how to execute, and the gory details of execution are something people tend not to understand.
There could be a billion placements, and every placement has to go from the front end to the back and go through reconciliation. I don’t see how they would do that, so even if they can have a point of view, if they could figure out how to be negotiators in the marketplace, consultancies by their very nature don’t know how to execute, so they’re only going to be able to do one media type at a time. They’re going to try to convince clients that they’re their strategic media partners and they’ll take it to a certain level and let the media agencies execute. Media agencies aren’t going to tolerate that. They’re going to say, ‘Why would we want to be in that business? There’s no money in that business.’
There will be a pressure point for us, but there are many reasons why we can articulate to our clients why it’s not in their best interests, including what will happen to the best media agencies that they depend on if they let consultancies get too far.