Pragmatic hedging

GroupM CEO Aimee Buchanan has been moving at light speed since landing in the big seat at GroupM in October 2021, tapping rivals for a new bench of senior execs to fire-up its once unassailable clout in Australia and New Zealand.

In an interview with Mi3 detailing EssenceMediacom CEO Pat Crowley’s shift to a Managing Partner role and his replacement in Pippa Berlocher, the APAC President of Mediabrands unit Reprise, Buchanan was asked if client losses had levelled out at the agency and to self-score GroupM’s overhaul to date. 

"I don’t know if I can answer that 100 per cent,” she said. “At the moment I’d say there's no more to come but I'm never going to jinx myself. What I will say is a lot of the clients we've lost were out the door before we even got to [the] EssenceMediacom [merger]. There was a lot of legacy there that we've been navigating as we try and bring the two businesses together. It is a massive disruption. I'd like to think that we're in a pretty good place but some stuff will just come up for review because it's statutory. But… never say never is a good caveat.”

It’s either pragmatic hedging at its best or Buchanan senses more. But smashing the legacy of a big global media agency like Mediacom – steeped in the dark arts of mainstream media buying and planning and needing more digital smarts and pace – and the adolescence of digital hot shop Essence, is a big ask and has partly triggered client unrest. Buchanan’s pointer to the challenges predating her arrival at GroupM has some merit, although she was hired by GroupM’s global leadership as a fast fixer and rainmaker.

Among some of the headline losses last year was the exit of the big-spending Ladbrokes and Neds business to  resurgent independent Atomic 212 and the loss of Tourism Queensland to Dentsu. Perhaps the most telling was Google’s global consolidation of digital and mainstream media buying contracts into EssenceMediacom, except the Australian market. Google, which earns its fat profits mostly from digital advertising, is ironically a large spender in mainstream media. But in Australia and New Zealand it wrangled a remit to stick with incumbent, PHD, part of Buchanan’s old stomping ground at OMG before her great defection.

Indeed, OMG and Mediabrands have been the go-to for Buchanan’s raids to refresh her leadership for agency brands Mindshare and EssenceMediacom and at group level. After two raids on Mediabrands for new bosses at Mindshare (Maria Grivas) and Berlocher at EssenceMediacom, last week she hired her former staffer at OMD, Melissa Hey, as group Chief Investment Officer, replacing Seb Rennie who will join Southern Cross Austereo’s Listnr operation.

'Irritating flattery'

When Buchanan’s former boss at OMG, Peter Horgan, was asked about his latest loss to his one-time star, he said: “It’s irritating flattery. People are only going there for big promotions and we remind them that comes with risk.”

Buchanan herself was mindful of those risks in an interview a year ago with Mi3 when reflecting on the possibility of her new role and business tanking.

“If I halve this business in the next year, will I be here?” she pondered. “Probably not. But if I miss a few bits and pieces and I have to massage through to get there, I think there's a complete appetite for that.” And of the revenue targets her bosses expect? “It’s no worse than I’ve ever had before, put it that way,” she said at the time. 

Buchanan will no doubt be reminding her GroupM bosses of the task ahead she warned of when joining: “We need to build for agencies, not building for the next pitch – which is my fundamental belief around where agencies get it wrong,” she said in the same interview last February. “That is not a one-year journey and they’ve told me they fully accept it is not a one-year journey.” Nor is it a 16 month journey. 

So how does Buchanan self-score GroupM’s progress under her watch so far? 

“I'm pretty impatient and I always want things to move faster than they're moving,” she told Mi3 last week. “And in that plan that I set out, there wasn't a huge merger [EssenceMediacom] in the plan, so I had to recalibrate a little bit.

"But I think as far as what we set out around building up the local vision, about people and cultural initiatives, a lot of work in the product space, which you’ll see accelerate, the forming of Nexus, the hiring of Maria Grivas, sustainability... we've done a lot. I almost forget how much we've done until I sit there and kind of write it all out," said Buchanan. The sentiment coming from inside GroupM under her leadership contrasts markedly to the regime under former WPP ANZ CEO, Jens Monsees. GroupM staffers appear to be widely energised.   

But one of her next lines may give Horgan and Coad further cause for concern.

"But there's still a lot more to come and I'm super excited about the plan for this year building on the foundations. You'll start to see in the next couple of weeks, a few more hires coming in, new capability that we're building and bringing, which I think will put us in a very strong position. Yeah, I'm happy with where we're at. Has it gone as far as I would like? No, but it never would have.”

Follow the money

At some point Buchanan will need to win business and grow revenues – but it appears she has time despite the global GroupM beast’s forensic energy for following the money.  

More broadly, Buchanan remains “cautious” for the media sector’s year ahead. “Global clients are feeling this immense pressure in the tightening of the purse strings because of Europe and the US and I think to a degree, China. If they've got a presence in China, the local business feels strain. The sentiment is still cautious.”

OMG’s Horgan says the June half of this year will be “pretty soft but I don’t see it tanking until the second half and that’s predicated on how tough they go on interest rates. The monetary setting and interest rates in the second half will really determine that.”

But after a global meet with his OMG peers in Asia last week, Horgan said the Europeans were surprisingly upbeat. “We hear all about all the carnage in Europe but they're already sort of seeing it turnaround,” he said. “I think they're picking up a bit of marketshare but it certainly wasn't doom and gloom. It does seem counterintuitive doesn't it, compared to our market. Maybe we're talking ourselves into it.”