'We can’t do without agencies, so we need to reinvent them’: Renault readies new model for Publicis and OMD
Renault is readying an agency model which will see its media and creative shops, Omnicom’s OMD and Publicis respectively, “merged” into one. Both will work to the same set of KPIs and be led by a “chief operating officer” to be appointed by the car-maker.
The shakeup of Renault’s agency model is the only alternative to bringing the bulk of its ad business in-house. Bastien Schupp, the auto group’s vice president for global brand strategy and marketing, said it had been “tempted” to go down that route but comes up against the same problem each time – talent.
“We could do it ourselves, not just source the [creative] idea but produce and on the media side, anything that's not hardcore, traditional media buying, we could go direct and set up our own programmatic desks. We could get rid of most of our agencies and go in-house,” he told The Drum.
“But I don’t think it's realistic. We're a traditional car company and it's not our core know how. We wouldn't hire the right people and even if we did I don't think we would manage to keep them – over time we can't offer them the career that marketing specialists need.”
So, it’s getting tough on its agencies instead, pushing to “transform” the legacy model by forcing the merger of the media and creative teams from rival holding companies.
From October, Publicis and OMD will act as a combined unit – Schupp will figure out what to “brand” it once he knows if the experiment has worked – which will work on the same briefs and against the same set of metrics. They will, however, each retain their own P&Ls.
In addition to herding Publicis and OMD together, a 10-strong team of Renault’s own marketers will sit within this new entity to ensure work is being signed off and delivered. Day-to-day the whole thing will be led by a chief operating officer, yet to be named, who will come from inside Renault.
“I don't want to have to discuss with the creative and the media separately. I want one agency that brings content, media, data and the client around one table,” Schupp explained.
“It will be much more focused on effectiveness. There's a lot of wastage in this game, so, we're working on more transparency. In the past when the creative agency didn't have the same KPI as the media agency, there was always an excuse to do something different. Now we're merging them and a large part of the KPIs will be joint objectives - which may sound obvious but in big groups it's not.”
Beyond developing more effective marketing (and faster) Schupp has projections – though he declined to go into specifics – of how much money it will save though this model; the request for “efficiencies” in production and media costs has been made in the new contracts given to each agency.
The final pro to the move is the level of transparency that will come from having everyone in the same room, every day, led by one of its own.
However, this raises the question – if it was looking for more effective work, efficient spend and better integrated media and creative departments, why not move the whole business into one holding company?
Publicis has been touting the benefits of its ‘Power of One’ model in delivering integrated marketing at scale for over two years and having held a creative relationship with Renault since 1963, the addition of the £650m media account would have been welcomed with open arms by chief Arthur Sadoun.
But Schupp says this was never an option. Renault’s media has been with OMD for a decade due to a wider group agreement – which includes Nissan and Mitsubishi – meaning the CMO is unable to split out Renault's portion.
“We’re the largest car manufacturer in the world and that gives us leverage for a media buy. I'm linked with OMD on the media side and Publicis is historically my creative agency. If I have media with Publicis they could....,” he cut short, before adding: “They are transforming and have new technologies, but I haven't seen all of it. My way of integrating is to get OMD and Publicis together.”
He claimed the agencies have been largely positive – though admitted they have little choice in the matter. “But also that they see it as the right thing to do. OMD see the world is changing and they need to be challenged. It is on the ball and so is Publicis.”
The model will be trialed from its French headquarters and if successful it will be rolled out into South America and APAC.
Earlier this year, Proctor & Gamble's chief marketing officer made a similar move when he launched a new dedicated agency which would bring individual talent from competing holding groups together under one roof.
The 'People First' agency operates from P&G’s New York office, led by Andrea Diquez, chief executive of Publicis Groupe's Saatchi & Saatch, and combines Publicis talent with that of WPP and Omnicom to work on the FMCG-company's American fabric care brands including Ariel, Tide and Gain.