OMG Announces New North American Leadership
This article was originally published by the Wall Street Journal.
The elevation of the 15-year Omnicom veteran, who has played a key role in Omnicom’s foray into data and analytics, is a sign of the growing role that consumer information and technology is playing in the advertising business.
Mr. Hagedorn most recently led Hearts & Science, Omnicom’s three-year-old media agency specializing in data-driven ad buying. The 48-year-old ad executive also helped create Annalect, one of Omnicom’s first data practices, in 2010.
Mr. Hagedorn succeeds Page Thompson as the head of Omnicom Media Group North America. Mr. Thompson, 69, is retiring after more than four decades at the New York-based advertising giant.
Omnicom Media Group is the world’s third-largest ad-buying company, behind WPP PLC’s GroupM and Publicis Groupe SA’s Publicis Media. The firm works on behalf of marketers such as AT&T Inc., McDonald’s Corp. and PepsiCo. It was responsible for buying roughly $31.7 billion in advertising last year, according to estimates from Comvergence, a research firm.
The executive appointment comes as ad holding companies scramble to bolster their data and analytic capabilities to better compete with the sophisticated ad-buying systems of Alphabet Inc.’s Google and Facebook Inc.
Last year, Omnicom rival Interpublic Group of Co s. bought the bulk of data firm Acxiom for $2.3 billion, while Omnicom launched Omni, a marketing system that stores anonymized consumer information that the firm accesses from different data providers. In 2017, Publicis created a central data and analytics system dubbed Spine.
In his new role, Mr. Hagedorn said he would accelerate Omnicom’s push into e-commerce services and ramp up the use of Omni across the different operating units within Omnicom.
For decades, ad-buying giants have pooled marketers’ ad spending in an effort to increase their purchasing power and help them secure better ad rates from media owners. As digital advertising and auction-based ad sales took hold, however, the use of data has come to rival leverage alone in ad buying.
The belief that buying clout is becoming less relevant in the online space has encouraged some companies to take ad-buying duties in-house, a large pain point for the agency business.
Omnicom said it still buys significant amounts of digital inventory in bulk at favorable rates and uses its buying leverage when it sets up private ad-buying marketplaces with specific publishers.
In a nod to the importance of clout and pricing negotiations, Omnicom also is naming one of its top negotiators to a leadership role, promoting John Swift to the newly created post of chief operating officer for North America at Omnicom Media Group. He had been the media group’s chief of investments for the region.
“The biggest existential crisis facing agencies right now is the trend toward in-housing,” Mr. Hagedorn said. Some marketers “believe that there is no such thing as digital [ad buying] clout,” he said. “It’s just not true.”