What you need to know:

• OMG CEO Peter Horgan says an internal, local and international search for OMD's new CEO will be completed by Christmas.
• A female CEO to replace Aimee Buchanan, appointed GroupM CEO last week, is preferred but not a given. 

The Death Star returns

Omnicom Media Group boss Peter Horgan admits he would have preferred any exit by his OMD boss Aimee Buchanan to have been to a client role, a consulting firm or an agency start-up – which were all possibilities – over her taking the helm at a rival Horgan once called the GroupM “Death Star”.

“Aimee is very ambitious and very, very driven towards a challenge," Horgan told Mi3. "[GroupM] has got some structural challenges ahead to get themselves fit for purpose and she found that quite appealing. Plus, it’s a bonafide promotion. She’s been running the largest agency brand for almost the last five years and I think the options for her were client side, consulting, a start up or look at a group role. I would have preferred any of the other three.”

Still, Horgan said he wasn’t surprised that Buchanan opted for GroupM “because we were trying to hang on to her. I did my best to detach myself from Omnicom propaganda and give balanced guidance.”

But a large part of the proposition that helped OMD scupper GroupM agency brands as the country’s top media shop – operational transparency – will now be Buchanan’s to fix.

“If anyone can unscramble it, Aimee can,” said Horgan. “But there are the realities of re-engineering a P&L that can make that a tough equation.”       

Until about 2015, GroupM was unrivalled in Australia and New Zealand because of its market clout and new business dominance with tactics such as media “value banks” in which it could offer prospective clients a material gain in media efficiencies and costs via a bonus pool of media space GroupM would extract from media companies and offer as incentives when pitching for new accounts.

Horgan said the transparency movement which began mid last decade and really hit the media supply chain after P&G’s global brand boss Marc Pritchard called out numerous “murky” practices some five years ago was central to the success of the OMG group and OMD as a brand. 

“We were very aligned and Aimee's been strong on that,” stated Horgan. “Early in the last decade everyone felt like a challenger brand and there was there was a sort of a fear that GroupM was just was just going to keep winning business by virtue of its share of the market and the power of its value bank proposition. Value banks as a strategic approach to negotiations came under some duress, sort of mid-decade and the competitive set started to get its act together, us included.” 

Horgan attributes these shifts in awareness and demand for transparency to OMD’s growth along with Buchanan’s leadership. “It drove a new business pipeline of clients that were interested in long term relationships and not just squeezing suppliers. I’ve said it before, there are agencies out there doing the wrong things but by the same token, there are clients who have no interest in paying for the expertise they access. And frankly, those two entities deserve each other.”

But it does spotlight the challenge ahead of Buchanan in her new role overhauling GroupM’s operations and P&L. 

She has been a vocal critic on some of the questionable practices which remain today in the dark arts of trading media and advertising. 

In an Mi3 and feature podcast last year with Nestlé’s marketing boss and AANA chair Martin Brown, Buchanan said: “We've had quite a few instances of getting to the pointy end of a negotiation with a client in a new business pitch, and they've pretty much said you've got the right resourcing, but it's too expensive. And if I'm at a point where I can't commercially and viably sustain that structure for them, there's no way another agency can be doing that any cheaper. They have to be making money somewhere else. And if clients don't fundamentally understand that, then I think we're not talking about the two parts of the pie that need to be put together.”

Buchanan argues it’s perfectly acceptable for clients to sign off contracts that are not fully disclosed, provided everyone is clear on the terms of engagement. But she suggests brands taking that approach must ask themselves not just where their money is going, “but why is the money going there”.

Interim plan

On the OMD front, Horgan expects to be OMD interim CEO until December, after completing an exhaustive internal, local and international search.

“I'm excited about stepping in, which means we don't have to rush,” he said. “I'm going to take my time to assess the market internally, externally, internationally, to find the right person. And it won't be the same. It won't be an Aimee clone either. Aimee would be very tough to replicate. It will be someone who brings new skills, a new perspective. Aimee was an impact player. 

It was very much about the individual but the team will flex around the new CEO. Universally in speaking to our clients, they’re sad Aimee is leaving but they bought the team.”

Horgan added that a female CEO is preferred, but not a given. “I will come at it from the lens of looking to drive gender diversity and equality within the organisation,” he said. “But I've got to find the right person. There's plenty of female talent out there. I'll be approaching the appointment with an open mind.”

More broadly, the demand for talent in media agencies and beyond is “as hot as I think any of us have seen it,” said Horgan. He expects it to settle by year’s end.