Dentsu Aegis CEO Nigel Morris on ad industry disruption

Agency exec outlines path to becoming a '100% digital economy business'

Screen Shot 2016-02-11 at 12.34.17 PMIt started with some quiet murmurs, but the noise outside the boardroom of Dentsu Aegis‘ Toronto offices got louder and louder as more of the team gathered in the lobby to meet with Nigel Morris, CEO of Dents Aegis Network Americas and EMEA, who came into town recently on a  whirlwind visit.

Morris, who met with Marketing to discuss the firm’s growth and priorities, admitted that taking time to meet more locally with the various agencies in its network is critical. That’s because the organization has been designed to ensure there are simple and straightforward P&L structures that eschew complex bureaucracy.

“I really do not believe in Canada reporting into the U.S. It’s important we maintain that focus,” he said. “I think that’s working quite well for us.”

Dentsu Aegis closed 2015 with the acquisition of Grip Ltd. and, according to Morris, has no plans to slow down. This interview has been edited and condensed.

You’ve been making acquisitions not only here in Canada with Grip, but also recently in Amsterdam and Spain. To what extent are you thinking of more such buyouts in 2016 and beyond?
I think it will continue and even accelerate. Ever since the crash, we’ve been really, really clear that we’re going to be driven by globalization and convergence. We’re also convinced that the digital economy is going to be changing everything, and we intend to be 100% digital economy business by 2020. We’ve actually started that process in part by being acquired ourselves, with Dentsu. Now, normally what happens in an acquisition is that everything slows down and you become quite internally focused. The Dentsu guys have been pretty clear up front is that their ambition for us is to run what was Aegis outside of Japan and that assets they have – the Dentsubos, like a mcgarrybowen or 360i – they would reverse into our system, and we would run it in the operating model that we had.

We were growing twice as fast as the market up to the acquisition, and that’s accelerated since. Last year we grew organically by 10%. With the acquisition effect, we grew about 17.5%. That’s real momentum, and we want to keep that going.

What constitutes a digital-economy business in your mind?
We have this vision of innovating the way brands are built. That is our focus. We think there are four things: organization, talent, data and tech. Those are the things we have to invest in. And in terms of organization, we have to build on that one P&L model to make sure we can become a systemic knowledge business. Every one of our agencies sits on the same network, sits on the same software back-end, sits on the same data management architecture. That lets us be much more effective and seamless, both in the way we innovate internally and the way we operate and deliver solutions to clients.

You’ve been growing, but we’re seeing other firms pulling back. What do you think accounts for that ad industry contraction and how are you managing to avoid it?
With all the disruption, almost every sector is seeing an ‘Uberization’ or new competition coming in from startups or more digital-focused businesses. What you hear a lot in industry circles is a concept called VUCA – where things are volatile, uncertain, complex and ambiguous. The business environment, the world we’re in, is a VUCA world. Ambiguous is what they struggle with most. It’s interesting, because everyone thinks the startups have the secret sauce, but they really don’t. They just don’t have the friction, the traditional barriers, that existing companies have. It’s fine having a startup culture if you haven’t got machinery, processes, 23,000 people. What you can have is the same urgency, the focused agility. That tends to come from a turnaround within a company. I’m not sure if this is right, but it’s occurred to me that what we have to think of instead of a VUCA world is a DELI world – which is dynamic, exciting, limitless and instant.

You’re either leaning into the changes and the disruption and implications of technologies, or you’re leaning back. Who knows some of the nuances of what’s going to happen? Do we know the overall trend? We absolutely do. And we’ve truly never had as many opportunities to engage with consumers, with people, in a more effective way. We’ve never had more opportunities to measure what really happens. There are more creative options. Clearly, some agencies are really struggling to get their head around it. You’ve got to be quite decisive that you have the right capabilities, the right skills, in the right organization that values that collaboration.

How do all these changes affect the culture of your organization and how are you trying to shape it?
We try to never believe our own propaganda, but here’s what gets us really excited. We do a global check-in with our staff once a year – we’ve been doing it for 19 years – and one of the questions we ask is, “do you feel empowered to make decisions to do your job better?” We had 89% positive response to that question. That’s very powerful. I believe that all you can do is influence, and empower, and inspire as a leader. You can show decisiveness and be clear about the decision. What people want is to know where they’re going and they want to be inspired about it.

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