In-house Publicis Groupe Advertising

What is the potential for the Daimler-Publicis relationship?


By Shawn Lim, Reporter, Asia Pacific

October 16, 2018 | 6 min read

The creation of Publicis Emil by Publicis Groupe at Daimler AG, the manufacturer of Mercedes-Benz, has been touted by some as the new agency model for legacy businesses undergoing digital transformation to find a compromise between in-housing and maintaining relationships with agencies.

By comparison, to highlight the differences in models, fellow car brand Renault has followed another model, merging both its media and creative agencies (Omnicom’s OMD and Publicis respectively) to bring the bulk of its ad business in-house, which it hopes will enhance effectiveness and transparency and reduce wastage of its media spend.

However, a dedicated agency model does not always succeed in this day-and-age as WPP’s Global Team Blue (GTB), the dedicated agency built to service the global Ford advertising account, found out earlier this month its longstanding relationship as lead agency for Ford had ended. This saw the appointment of Omnicom’s BBDO as lead creative agency alongside the assignment of Wieden+Kennedy as an innovation partner for special projects.

There are also brands like HP which does not wish for exclusivity, because it wants to learn how its agencies work with other brands.

Daimler though believes Publicis Emil, set up at the start of the year and part of Publicis’ 'Power of One' model, while still in beta mode, represents the future.

“In order to be the best marketing team in the industry, one must never stop developing; instead of always chasing after the perfect setting we’re embracing constant change,” Conrad Fritzsch, the head of new agency model at the German carmaker, tells The Drum.

“To achieve this we combine the best from both worlds: strategic knowhow from in-house and maintaining relationships with agencies to get valuable input from outside the company.”

Fritzsch asserts there is no other way to win the marketing challenges of this century, because traditional marketing methods are slowly dying, which is why Daimler needs data-driven, fact-based decision making, and customer-centric content production and delivery to have its messages heard.

To achieve that, Daimler has adopted a ‘no customer-client, top-down attitude’ with Publicis, with both partners seen as being on equal footing, having one united big picture in mind. Forming smarter contracts reflecting performance measurement is only one part of that though, as Daimler and Publics have created milestones that are being measured by benchmarks and KPIs, giving the team focus and orientation.

“Above all other goals our most important claim is to not only transform our marketing approach but also the culture: one dream, one team is the spirit we’re about to create on both sides,” adds Fritzsch.

The true power of one

Most advertisers are still locked into rigid agency contracts, which are often a ‘one-size-fits-all’ model negotiated in one territory but serviced globally. This benefits some regions but leaves others without the tools or services to get the most from their programmatic spend.

With its ‘Power of One’ model, Publicis wants Publicis Emil to be a ‘right size for local’ for Daimler and not adopt ‘one size fits all’ approach, says Justin Billingsley, chief executive officer at Publicis Emil and chief operating officer at Publicis Communications, pointing to Publicis Emil’s capability investment and structure principle, which is ‘hubbed where possible, local where relevant’.

This is because Publicis believes that no client operates in a truly flat world and there are varying levels of market development or penetration, varying levels of brand development, different data sets available and varying strengths of communication channels.

This is especially crucial when the client is Daimler, which is trying to keep pace with the changing consumer behaviours that digital has brought across 40 markets.

“This way they are hubbing where there is little benefit to work locally – such as transcreation and adaptation of global toolkits which they do in three hubs around the world, but still have local scopes defined with bespoke local teams built to serve those scopes in 39 markets,” Billingsley tells The Drum. “In terms of the data tools being developed – they are available to every market, depending on the accessibility of the data.”

Being ‘right size for local’ will also allow Publicis to remain competitive, even as it spends more and more on analytics, ad ops and data, which traditionally do not bring in the revenue for agencies, and make great work that delivers results.

“Publicis Emil is compensated for great work, and for improving the results of Mercedes-Benz and other Daimler brands – and their choice to invest to achieve that work was critical in them both securing the business, and also in now driving our transformation and growth,” explains Billingsley.

Best of both worlds

Brands taking greater control of their media spend and the effectiveness of their campaigns will not make agencies obsolete, Fritzsch strongly believes. Instead, it will finally enable agencies to be truly outcome driven, to not be limited by restricting assignments and to be in a safe place to communicate honestly.

“A brand will never be in the position to cover all the expertise agencies carry; especially not in a case like Publicis,” he explains. “It was never the agency solving the client’s one specific problem. Instead there are multiple, very complex challenges a consistent agency as partner first needs to deeply understand in order to be able to help. The answer can only be achieved by multiplex expertise served by an agency-owned network.”

In addition, Fritzsch highlights that agencies will always be much faster, act more agile, have room to experiment and take risks on smaller levels, serve to set blueprints and create benchmarks the company can then follow once it has proved to be successful.

“Daimler’s partnership with Publicis Emil has three main claims: consistency, efficiency, effectiveness. Our goal is to implement a system that will guarantee one global brand voice, but still allows local individuality,” he says. “This system must allow a fast and agile process of conceptualization, execution and adaption, never forgetting that all decisions made must be customer-centric with data at core.”

It is still early days to determine if the Daimler-Publicis relationship will work out or go the way of Ford-WPP’s, but one thing is for certain – brands need agencies, or even consultancies, to ensure they stay relevant.

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