Michael Frohlich on the scrutiny of his Ogilvy restructure and what awaits the agency now
As a PR man by trade, Michael Frohlich knows 2018 was not a vintage year for news clippings about his agency.
A radical restructure picked apart by the industry’s commentariat. Headlines of stalwarts quitting and then, in the autumn, voluntary redundancies. These are not, as they say in the PR world, great optics.
But Frohlich would tell you that’s not the full story of what happened at Ogilvy UK.
He would tell you it was a year in which the agency attracted new clients, grew its revenues by a little over 2% and made good on a drastic – but essential – transformation plan.
Whichever way you read events at Sea Containers House – and understandably many of those that have left the agency over the last 12 months will have an alternative interpretation to the man still at its helm – Frohlich says change was unavoidable.
“Frankly, we had to do it,” he tells The Drum.
“We had to change the business to be futureproofed. We had to get rid of all the silos, we had to change the model. If it wasn’t me it would’ve been somebody else. It had to happen and I’m very proud of it.”
Before Frohlich was promoted to chief executive last February, Ogilvy UK was not so much one agency as nine. It encompassed, among other brands, Ogilvy & Mather Advertising, Ogilvy Red and Frohlich’s last employer, Ogilvy Public Relations. Almost a year on, they are gone. In their place, a silo-shorn model Frohlich dubs “one Ogilvy”.
Working to a mandate set by Ogilvy global chief John Seifert, Frohlich has collapsed the agency’s sprawling sub-brands in favour of a “seamless structure” that should improve teams' ability to collaborate and cross-sell services like PR and advertising. To get there, however, has involved no little upheaval. So why change so much so soon?
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“The traditional operating model is on the decline,” says Frohlich. “From both a local and global level this is about setting us up for the future and ensuring our business can really compete in what is an unbelievably changing landscape.”
He cites martech jumping to 29% of a chief marketing officer’s budget (per Gartner), tech giants and consultancies “playing in our space” and the unyielding digital dominance of Google and Facebook among the forces threatening agencies.
“There’s been a total shift of how CMOs operate,” he says. “The change is so huge that we had to make some really big decisions in the UK, and some really difficult ones as well.”
Difficult decisions including October’s open call for voluntary redundancies: “That allowed people who joined us several years ago, people who joined a very different type of business, to determine whether they wanted to continue on the journey with us.”
About 50 staff – out of Ogilvy’s 1,200-strong workforce in London – chose to disembark. "The fact that less than 4% were putting their hands up shows we’ve got 96% of the business who are either completely sold on where we’re going or will at least give us a chance and are with us into 2019."
Frohlich didn’t only have to sell his vision to staff. There were also clients to convince. New wins in the form of Rolls Royce (B2B advertising, social media and content), PlayStation (EMEA PR) and Quick Books (consumer engagement and PR) suggest Ogilvy’s transformation has not been a deterrent. And despite the ad land hubbub, there has been no public dissent from existing clients. British Airways has even expanded its relationship with the agency.
Frohlich has been candid with clients about his plan, and in some cases has even sought their “counsel”. In return, they’ve been “unbelievably supportive,” he says. “When you talk to clients about restructuring and futureproofing the business, none of them would say it’s the wrong thing to do. And secondly, all of them say, ‘Yeah, we do it all of the time. This is life. This is business. This is what we do’.”
The agency model, and what should be done with it, was one of the dominant marketing themes of 2018. But it was a subject many agency bosses only broached in the abstract. So while there was consensus across the industry that agencies needed to change, few did. Frohlich believes this is one of the reasons Ogilvy’s inner workings have attracted so much outside scrutiny.
“It’s been tougher than I thought it was going to be,” he says, before checking himself. “Sorry, I don’t know actually if it’s been tougher than I thought it was going to be; it’s been more public than I thought it was going to be.
“There are lots of reasons for the public scrutiny of it, not least because we have gone further and deeper and faster than anyone else has. If three other big, famous agencies were doing it at the same time we’d be collectively scrutinised, but they weren’t. We were the only ones in the UK.”
While some industry observers have indulged in social media schadenfreude, Frohlich says his counterparts have been nothing but encouraging. “When I talk to other chief executives of agencies in the UK on a one-to-one, it feels like there’s a bit of: ‘I wish we could be doing what you’re doing’.”
One organisation that is doing what Ogilvy is doing is its parent company, WPP. In December, chief executive Mark Read announced his own wide-ranging restructure plan which will see the holding company reposition itself as a “creative transformation” business. Frohlich welcomes Read’s new direction but plays down the impact it will have on his agency.
“We've done our big restructure, we've done our change. So anything on restructures that WPP will be doing, or others will be doing… we've done ours. It's exciting, it's new energy. We're in the building together. The meeting [WPP's AGM in December] was here. It's an incredibly exciting time.”
After a year in the spotlight, Frohlich is looking forward to getting back to “business as usual” in 2019. Recent appointments Lou Whitcombe, Clare Lawson and Dede Laurentino are settling into their roles of head of customer engagement, chief customer officer and chief creative officer respectively. They’ll be joined by a new head of PR and influence in March. Frohlich also anticipates more arrivals at Ogilvy’s consulting offering which has ballooned into a “multi-million-dollar business” run by over 30 staff.
Now he gets to watch on as the rest of the industry wrestles with how to refashion itself.
“Within the landscape of agencies in the UK this year there is going to be so much change. You know there is going to be such an enormous amount of change.
“We have changed. I am genuinely happy, and proud, we've had a good year performance-wise and we've restructured. This year we can focus on growing and delivering for our clients and our people. Really, it's a simple as that now.”
Michael Frohlich will be taking part in a fireside chat at The Drum's Predictions Breakfast in London on 23 January. You can register for your place here.