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Omnicom Group Inc.

Omnicom Group Inc.

437 Madison Avenue
New York, New York 10022
U.S.A.
(212) 415-3600
Fax: (212) 415-3530

Public Company
Incorporated : 1986
Employees : 22,700
Gross Billings : $2.64 billion (1996)
Stock Exchanges : New York
SICs : 7311 Advertising Agencies; 6719 Holding Companies, Not Elsewhere Classified

The second-largest advertising group in the world, Omnicom Group Inc. operates as the parent company for three separate, independent advertising networks: the BBDO Worldwide Network, the DDB Needham Worldwide Network, and the TBWA International Network. During the late 1990s, Omnicom also operated two independent agenciesCline, Davis & Mann, and Goodby, Silverstein & Partnersand various marketing service and specialty advertising companies through its Diversified Agency services division. Omnicom was created in 1986 as a holding company, but its history stretched much further back, back to the influential role each of its three subsidiary agencies played in the growth and development of the U.S. advertising industry.

Origins of Batten, Barton, Durstine & Osborn

BBDO was itself the product of a merger. In 1919 Bruce Barton, Roy Durstine, and Alex Osborn opened an advertising agency on West 45th Street in New York City. A few years later, as its business grew, Barton, Durstine & Osborn moved to the seventh floor of a building on 383 Madison Avenue. Three floors above BDO was another advertising agency, the George Batten Company. It seemed odd having competing firms sharing the same address, so a merger was proposed. On May 16, 1928 the George Batten Company joined with BDO to form Batten, Barton, Durstine & Osborn.

The most important man at the Batten agency was William Johns. Johns was more experienced and considerably older than Barton, Durstine, or Osborn. He was therefore made president of BBDO while the job of chairman went to Bruce Barton. Durstine was vice-president and general manager, and Osborn ran a separate BBDO office in his hometown of Buffalo, New York.

Bruce Barton was not a typical advertising man. In fact, he admitted on numerous occasions that he and the profession were not well suited. Barton was trained in theology and philosophy, attracted to politics, and committed to his personal writing projects. He wrote two extremely popular books, The Man Nobody Knew (a reappraisal of the life of Jesus Christ) and The Book Nobody Knew (a similar reappraisal of the Bible). Then, in the mid-1930s, Barton ran for Congress. He was elected and held office for two consecutive terms. In 1940 he ran for senator but lost by 400,000 votes. Barton was involved only in the creative aspects of BBDOs enterprises.

Durstine was the opposite of Barton. He was in love with the advertising business and what it could obtain for him. Like a number of other agency heads trying to make money during the Depression, Durstines workaholism became self-destructive. He began drinking heavily, lost his wife and Long Island estate, and was forced to retire from BBDO in 1939.

The vacancy left by Durstines departure caused some reshuffling of BBDOs management. William Johns by now was too old to handle the day to day operations of the agency. He was promoted to chairman, but relieved of all administrative duties. Osborn and Barton were then required to run the agency themselves.

The readjustment proved beneficial to the agency, for BBDO was in need of a new approach to its advertising. Osborn in particular was instrumental in reorganizing the agency and directing it toward the packaged goods advertising business. From the very beginning BBDO had primarily handled accounts for institutional clients such as Du Pont Chemical, Consolidated Edison, and Liberty Mutual. Although they were consistent customers, these companies neither needed nor wanted extensive advertising. If BBDO was going to grow rapidly enough to compete with large and established agencies, it would have to do advertising for packaged goods. Not only are new packaged goods constantly introduced to the market, but also those already on the shelves are always being improved to keep up with competing brands. In this environment advertising flourishesthat was Osborns important insight.

Between 1939 and 1945 BBDO gained a number of important non-institutional accounts: Lever Brothers, B.F. Goodrich, Chrysler (Dodge Division), MJB Coffee, and the 3M Company. Not even the upheaval of World War II kept BBDO from growing. Billings increased from $20 million at the height of the Depression to $50 million at the end of the war.

In 1946 management changes again took place at BBDO. Ben Duffy, a veteran account man with the agency for over 15 years, was elected president; and Charlie Brower, who was to lead BBDO in the 1950s and 1960s, became executive vice-president in charge of copy writing. Duffy was an excellent salesman who could close a deal quickly. When Foote, Cone & Belding resigned the $11 million American Tobacco Company account in 1948, Duffy went directly to see American Tobaccos George Hill and secured the account after one meeting. In Duffys 10 years at the helm of BBDO the agency increased its billings from $50 million to over $200 million.

Unfortunately for BBDO, Duffy was prone to ill health. In 1956 he suffered a stroke in Minneapolis while visiting the chairman of General Foods. He could not continue as the head of the agency, and Charlie Brower subsequently replaced him as president. Brower was the obvious choice. He had been in charge of the creative side of BBDOs advertising for over 20 years and was responsible for much of the agencys success.

Brower had a no-nonsense approach to advertising. He felt that as president of BBDO he had to do four things: 1) add one million dollars to the payroll; 2) hire talent from the outside; 3) fire many of his best friends; and 4) do away with company time clocks, which he thought made the agency a factory instead of a creative enterprise.

When Duffy retired there was confusion at BBDO, and a number of important clients quit the firm. In fact, until Charlie Brower established himself as president of the company no one was actually in charge. Revlon, a $6 million customer, canceled its account as soon as it heard of Duffys retirement. Other clients followed Revlons example. Brower did not allow this situation to continue for long. BBDO appeared headed toward disaster when Brower won for it the most lucrative account in its historyPepsi Cola. Within a matter of weeks BBDO was financially healthy once again.

For BBDO the 1950s and early 1960s was a period marked by more than management readjustments and client shuffling. It was also a period in which BBDO became intimately and extensively involved in political advertising. Many agencies try to avoid producing campaigns for political movements and parties so that copywriters are not forced to sell opinions they themselves may not hold or to which they may be vehemently opposed. BBDO is one of the few firms that has accepted political advertising as a normal part of its business.

In 1948 BBDO ran its first ad campaign for a political candidate, Republican Thomas Dewey. Both candidate and agency lost this close election but, though Dewey left the political foreground, BBDO simply waited for the next election and a more marketable candidate. It found one in Dwight D. Eisenhower. In 1952 BBDO signed the Republican National Committee as a regular account, and did the advertising in Eisenhowers successful bid for the presidency. The firm was hired again four years later to handle Eisenhowers re-election campaign. Unfortunately for the Republican Party, and Richard Nixon in particular, BBDOs success ended with Eisenhower. A BBDO makeup man was responsible for the grey shave look of Nixons face in his 1960 televised presidential debate with John F. Kennedy.

Outside the political realm BBDO continued to expand and sign new clients. Not only did it increase the number of its institutional customers such as CBS Broadcasting (1959) and the SCM Corporation (1961), but also it won product-oriented accounts such as Tupperware (1959), Autolite (1961), McGregor Sporting Goods (1964), and Pepperidge Farm (1964). To match this domestic growth BBDO began to expand internationally for the first time in 1959, opening up offices in London, Paris, Milan, Frankfurt, and Vienna. In 1964 BBDO acquired the Atlanta-based firm of Burke Dowling Adams and with it the accounts of Delta Air Lines and the various governmental agencies of the state of Georgia. The Clyne Maxon firm of New York, with its $60 million in billings, was also merged with BBDO in 1966.

Company Perspectives:

Omnicom is a truly global company. We have offices in 85 countries. Nearly half of our revenue is from outside North America. And were also diversified in other ways. In 1996 our advertising revenues from BBDO Worldwide, DDE Needham Worldwide, TBWA International and Goodby, Silverstein & Partners represented approximately 60 percent of our revenue. Revenue from our specialty advertising and marketing service companies accounted for the remaining 40 percent. Both advertising and marketing services activities are geographically balanced with one-half of revenues coming from North America and one-half from the rest of the world. The diversification of our services and our geographic balance means our revenues are far less dependent on the business cycles of any one country or line of business.

By the time of the worldwide recession during the 1970s, Charlie Brower had retired as president of BBDO. His successor was Tom Dillon, who had been the agencys treasurer since the late 1950s. Like most ad agencies BBDO suffered considerable losses in domestic billings during these years of economic stagnation. However, because of the way the company was structured, BBDO was able to endure this period without undue strain. By opening up offices in new places around the world, the agency entered advertising markets which had previously been closed to it. This international expansion served to offset losses incurred in the domestic market. In addition, BBDO began selling shares to the public in an effort to diffuse operating costs.

In 1976 Bruce Crawford was named president of BBDO. He had been head of the agencys foreign operations. During his eight-year tenure billings at BBDO tripled to $2.3 billion, and his cost management measures kept the company from misusing the benefits of this growth. As one analyst said of BBDO in 1981, Ive never seen a company so conscious of cost controls.

Crawford retired on March 31, 1985, and was succeeded by another able manager, Allen Rosen shine. Under his tutelage BBDO continued to expand by acquiring subsidiaries, creating for the agency a genuine worldwide network. It had traditionally been BBDO policy to allow local entrepreneurs the freedom to run their own offices, to encourage individuality and creativity. This practice came to an end under Rosenshine. A number of foreign and international clients expressed concern over these local shops. They thought there was too little direction coming from top management, and became wary of giving business to BBDO subsidiaries. To remedy the problem Rosenshine attempted to tighten the connections within the BBDO network and provide more centralized leadership.

That same year, BBDO and its various sub-agencies won a total of 530 awards for creativity. Most notable of these was the Grand Prix Gold Lion at the Cannes Film Festival. The trophy is presented to the agency which produces the years best television commercial. The ad that won this coveted award was the Archeology commercial made for Pepsi Cola.

With BBDO such a large and vital member of the advertising industry, there was some question as to why it needed or wanted to join in a merger, particularly when the other two potential partners were currently experiencing financial difficulty. What did BBDO have to gain?

The answer was not hard to find. BBDO was one of the last major agencies to expand internationally, waiting until 1959. This late start proved to be a handicap and made BBDOs overseas growth uneven. For instance, BBDO was then the number one firm in Germany and the number two firm in Australia; but ranked 17th in Canada, 26th in France, and 29th in Britain (the most important European market.) The situation was complicated in 1985 by BBDOs being forced to sell its interest in a major South African subsidiary at a considerable loss. This divestiture led to a decrease in BBDOs international revenues of 94 percent and removed BBDO from the South African market where it had been the top agency. The merger with Needham and Doyle Dane Bernbach would provide BBDO with greater international presence, particularly in France, Canada, and Great Britain. According to the policy planning heads at BBDO, this improvement of the agencys foreign business was necessary for BBDO to maintain itself as a formidable worldwide advertising competitor.

Origins of Doyle Dane Bernbach

When those within the advertising industry are asked which agency most exemplifies innovation and creativity, one firm above all others is mentionedDoyle Dane Bernbach. In the world of advertising, where imitation is the rule, the Doyle Dane Bernbach agency has made itself an exception. Most ad firms follow familiar schools of thought, but not Doyle Dane Bernbach. In the words of David Ogilvy, They just sort of created an original school out of air.

In 1949 Ned Doyle and William Bernbach joined Maxwell Dane in the formation of a new advertising agency. Bernbach and Doyle had been trained at Grey Advertising, and Dane had owned his small ad company for a number of years. Doyle Dane Bernbachs first year billings came to just $500,000, but something about its advertising style suggested it would soon be a major force in the industry. It hired the most creative people it could find, no matter where they came from.

Among Max Dane, Ned Doyle, and Bill Bernbach there existed a well-defined division of labor. Doyle was the account executive in charge of winning and retaining clients; Dane took care of administration and financial matters; and Bernbach handled the creative concerns. Rarely did they cross into each others designated spheres.

What made the firm unique in the ad industry was Bill Bernbach and his preoccupation with the road not taken. Born in Brooklyn and educated in English and philosophy at New York University, Bernbach was the ad mans intellectual. His ideas were fresh, striking, and more often than not, couched in subtle humor. He sympathized with the public at large, which found most advertisements boring. His quest was to make ad campaigns exciting and fun while still focusing on the products attributes. He had little reverence for research. He felt it substituted statistics for ideas and emotions. For him advertising was an art, and as an artist he was primarily concerned with imagery, impression, and point of view.

Bernbach was also a good teacher. He was patient, precise but gentle in his criticisms, and had the ability to nurture natural ability. His students formed the firms Creative Team: a small group of copy writers, artists, art directors, and photographers that produced the agencys campaigns. Bernbach led the group but not in an authoritarian manner. It was what he called a horizontal hierarchy. We are all peers here, he said.

In the 1950s Doyle Dane Bernbach displayed its style of advertising in four notable campaigns for four near-unknown companies: Polaroid Cameras, Levy Bakery Goods, Ohrbachs Department Store, and El Al Israel Air Lines. These companies, like Doyle Dane Bernbach, were attempting to establish themselves in their respective markets. Polaroid was overshadowed by Kodak, Ohrbachs by Macys, and few people had ever heard of Levys Bread or El Al Air. To compensate for this lack of public recognition, the agency created strikingly different ads featuring everything from a cat dressed in a womans hat to an American Indian claiming that you dont have to be Jewish to enjoy Levys real Jewish rye. Not only did the campaigns sell large quantities of cameras, clothes, bread, and airline tickets, they sold Doyle Dane Bernbach advertising as well. In 1954 the Agencys billings were $8 million; by 1959 that figure had increased to $27.5 million.

In the early 1960s the agency won two new accounts that were to further enhance its reputation: Avis Car Rental Service and Volkswagen. In the rent-a-car business Hertz held the dominant market share. Far behind in second place, Avis wanted to increase its own market share. Most advertising is meant to portray the client in as favorable and strong a position as possible. Doyle Dane Bernbach, however, disregarded this tradition; its campaign stressed Aviss weak position vis-a-vis Hertz. Were number two, said the ads, We try harder. We have to. This strategy worked. In two years Avis increased its market share by over 25 percent.

The Volkswagen advertising campaign was a similar story. These small German cars were not what the American consumer wanted, or so it appeared. Again, Doyle Dane Bernbach converted a liability into a saleable asset. Hoping people had tired of the large and overly-embellished American-made cars of the 1950s, Doyle Dane Bernbach said simply: Think small. The art of the ads was minimalist, usually showing a small picture of the car against a blank white backdrop. The text was equally odd. The short, simple copy was blocked in paragraphs that looked, in the words of copywriter Helmut Krone, Gertrude Steiny. Not only did Americans purchase these ugly Volkswagens by the thousands, but the car became a symbol for an entire non-conformist generation.

Following these successes the agency won accounts from American Air Lines, Seagrams, International Silver, Heinz Ketchup, Sony, Uniroyal, Gillette, Bristol-Myers, and Mobil Oil. The 1960s were the golden age of advertisings creative revolution, and Doyle Dane Bernbach was at the forefront of this movement.

As the 1960s gave way to the 1970s, the industry witnessed a return to conventional advertising techniques. This trend and the recession which plagued the beginning of the decade spelled trouble for the company. In 1970 Doyle Dane Bernbach lost the $20 million Alka-Seltzer account, even though the thats a spicy meat-ball commercial was extremely popular and a favorite of the critics. Other agency clients quickly followed Alka-Seltzers lead. Lever Brothers, Whirlpool, Sara Lee, Quaker Oats, Cracker Jack, Uniroyal, and Life Cereal also canceled their accounts.

Fortunately for the agency, its growth during the 1960s provided it with enough revenue to absorb these losses, at least in the short run. Nonetheless, a company reorganization and reorientation was in order. In 1974 Neil A. Austrian joined the company as executive vice-president. He had expertise in the business aspects of advertising, something that had been missing at the agency. Gradually he transformed the company into a more orderly advertising network. Subsidiaries were acquired to strengthen Doyle Dane Bernbachs worldwide presence and offer more comprehensive client services. In 1975 the agencys billings rose for the first time in the new decade, and this trend continued for seven years.

On October 2, 1982, William Bernbach died of leukemia. His absence left a void at the agency. This raised a difficultquestion: Could Doyle Dane Bernbach continue without Bill Bernbach?

The question haunted the firm. In 1982 earnings fell 30 percent. This loss was compounded in the next two years by the resignation of important accounts. American Air Lines canceled its account in 1983. Its spot was filled by Pan Am which subsequently left the agency a few months later. Then, in 1984, Polaroid announced it would be taking its business elsewhere. The agency was particularly shocked by this resignation. Its commercials had helped make Polaroid the worlds best-selling camera.

In the first half of 1986 Doyle Dane Bernbach was forced to lay off 24 staff members; it had lost almost $113 million in net earnings. The merger with BBDO and Needham Harper Worldwide represented a necessary business decision. It was doubtful that Doyle Dane Bernbach could continue if its fiscal situation were not improved. The security afforded by the Omnicom umbrella promised to relieve the agency of its financial difficulties, and allow it to concentrate on what it did best, namely, innovative advertising.

Origins of Needham Harper Worldwide

In 1924 Maurice Needham opened up his own advertising agency in Illinois. It was named The Maurice H. Needham Company. This title was changed in 1929 to Needham, Louis & Brorby, Inc. The firm then merged with Doherty, Clifford, Steers & Shenfield, Inc. in 1964 to become Needham, Harper & Steers. In 1984 the company name was again changed, this time to Needham Harper Worldwide.

As a Chicago-based agency, it traditionally avoided Madison Avenue type of advertising, and was generally considered to have stronger advertising presence in the Midwest than in the East. Until becoming part of Omnicom, Needham & Harper had not ranked among the largest worldwide agencies. However, this provincialism contributed to its success. Smaller companies, feeling neglected and disrespected by large advertising agencies, often turned to Needham & Harper. This type of client was the foundation of the firms business.

In addition to that of Maurice Needham, the other name associated with the agency was that of Paul Harper. He came to the company in 1945 when it was Needham, Louis & Brorby. Harper had been educated at Yale and had spent four years in the Marine Corps fighting in the Pacific campaign. After his discharge, he walked into Needhams Chicago office looking for employment. He had no resume, no writing experience, and no civilian clothes. Despite his scant qualifications Needham gave him a job as a copywriter, and soon Harper was making a name for himself in advertising. He worked primarily in broadcast advertising. Most notably, he produced commercials for Johnsons Wax on the Fibber McGee and Molly radio show.

As Harper became a man of greater importance at the agency he gradually moved from copywriter to manager. In 1964 he became president of the company and supervised the acquisition by Needham of Doherty, Clifford, Steers and Shenfield in 1965. At this time the name of the agency was changed to Needham, Harper & Steers. In 1967 he became chairman and chief executive officer of the agency, and retained this position until his retirement in 1984.

During the late 1950s and 1960s when companies were substantially increasing their expenditure on advertising, Needham, Harper & Steers, though still only a mid-size agency, grew along with the industry. It concentrated on smaller accounts but also retained a number of large Midwest clients, such as the Household Finance Corporation and the Oklahoma Oil Company. For the former it created the Never borrow money needlessly slogan; and for the latter it coined Put a tiger in your tank.

In 1972 the firm followed the industry trend of publicly trading its shares. This move did not prove to be lucrative. Investors do not generally consider advertising to be a perennially stable business. More so than other industries, it is affected by the fluctuations of the economy. Smaller advertising firms are especially vulnerable and therefore pose higher risks to potential investors. Unlike the larger agencies such as Ogilvy & Mather and Interpublic, Needham, Harper & Steers was unsuccessful in drawing a strong investment interest. Four years after going public Needham & Harper went private again.

Although it serviced many small and mid-size accounts, Needham & Harper was primarily known for its blue chip clients. It won Xerox in 1968, McDonalds in 1970, Honda in 1977, and Sears in 1982. The agency produced the famous Brother Dominic commercials for Xerox, and the you deserve a break today slogan for McDonalds. Unfortunately for the agency, in 1984 McDonalds took its domestic business away from Needham and turned it over to Leo Burnett. The bad news continued in 1986, when Needham lost the $40 million Xerox account.

The merger with BBDO and Doyle Dane Bernbach would likely alter the personality of Needham Harper. Even though the three agencies intended to operate as separate divisions of Omnicom, there was more to the merger than a simple name change. Already clients expressed displeasure with the prospect of sharing the agency with competitors. The old conflict of interest problem became particularly pronounced when Campbells Soup, a Needham and Harper client, would not stay with Omnicom if Heinz, a Doyle Dane Bernbach client, remained. Similar difficulties arose between Strohs and Busch beer, and Honda and Volkswagen automobiles.

The most important question among Needham and Harper customers was whether they would continue to receive the same advertising attention to which they had been accustomed. Fortunately, says one such client, Keith Reinhard will still be around. Reinhard joined the firm in 1964, became president of NH&S/Chicago in 1980, chairman and CEO of NH&S/USA in 1982, and chairman and CEO of Needham Harper Worldwide in 1984. He impressed staffers, colleagues, and customers alike with his integrity and hard work. He maintained that the merger with Omnicom would help Needham attract and retain large clients, but claimed that the agency would not treat its smaller customers any differently than it had in the past. Reinhard also hoped Omnicom would restore to Needham a presence in the New York advertising market, something it had lacked since Xerox withdrew its account in 1986.

1986 Formation of Omnicom

When the final documents were signed and Omnicom was formally created, the task of making sense and profits out of the amalgamation fell to BBDO head Allen Rosenshine. As some had anticipated, the process of combining three competing agencies under one umbrella corporation was a tiresome and fitful chore, sparking further speculation about the prudence of the merger in the first place. Omnicom limped from the starting block. More than $40 million was spent on merger and restructuring-related costs, leaving the company essentially profitless for its first year. Several clients were wholly opposed to the merger, and expressed their displeasure by taking their business elsewhere, such as the immediate exit of RJR Nabisco. As a client, RJR Nabiscos chairman icily remarked, I see disruption, but little value. With very few exceptions, the wave of mergers has benefitted the shareholders and managers of the agencies. By the time the dust had settled after the merger, the three Omnicom agencies lost $184 million in billings that were directly attributable to the act of the merger itself.

The assimilation process did not get any easier after the end of 1986. When Omnicoms 1987 financial totals were announced, they were depressingly low. For the year, the company earned only $32 million from commissions and fees of $785 million, or 4.1 percent in what traditionally was a double-digit margin business. The year did have its highlights, however, including the gain of several large accounts. Omnicom agencies landed a U.S. Navy account, a large portion of new Pepsi business, including Slice soft drinks and Pizza Hut, and the account for NEC Home Electronics. In all, Omnicom registered $280 million in new business during 1987, but this was not enough to offset other difficulties. The merger was not delivering its desired and expected results, and this failure was beginning to wear on Rosenshine. In the spring of 1988, Rosenshines dissatisfaction was readily discernible. Right now, this is the most necessary job I can do, he told reporters.But if Im still doing it in two or three years, I dont think Ill be particularly thrilled.

Rosenshine was spared from having to endure a two- or three-year tenure by the return of Bruce Crawford, whose departure from BBDO in 1985 led him to the Metropolitan Opera Company. Crawford served as the Metropolitan Operas general manager for three years, and then made his return to advertising as Omnicoms chief executive officer. Charged with directing and expediting the restructuring of Omnicom, Crawford took the helm in early 1989 and immediately began paring away superfluous managerial layers and divesting businesses. With every merger, Crawford announced upon his return, everybody talks about all these wonderful economies of scale, but it usually amounts to small potatoes. I believe the idea is to build businesses, not worry about the economies of scale to be realized by the joint buying of erasers. My belief is that the management structure is a little too complicated. I believe it is necessary to keep it simple, fast, and that corporate structure and overhead need to be minimized.

Omnicom in the 1990s

Crawford made good on his words, and divested a number of Omnicom businesses, while shuttering others. Concurrently, he developed a more concentrated presence in Britain and Europe, where Omnicom lagged behind other U.S.-based, international advertising agencies. By the beginning of the 1990s, Crawfords strategy was beginning to work wonders, and Omnicom, after a torpid start, was now demonstrating the vitality its creators had envisioned prior to the merger. Despite the effects of a stifling economic recession during the early 1990s, Omnicom registered robust financial gains. In 1991, revenues increased to $1.2 billion and profits grew consistently. This growth trend continued after the recession, when the company recorded an 18 percent increase in revenues to $2.3 billion in 1995 and a 26 percent gain in net income, to $140 million.

By the end of the mid-1990s, any lingering doubt about the prudence of the 1986 merger had been thoroughly washed away. Omnicom held sway as a powerful and creative force as the late 1990s began, with its three agency networks earning numerous prestigious awards and gaining much coveted, new clientele. BBDO, selected by Advertising Age International as The Most Creative Agency Network in the world in 1996, was awarded multinational accounts for Sara Lee, Mars, Visa, Pepsi, and Bayer. At the Cannes International Advertising Festival in 1996, DDB Needham won more awards than any other agency in the world, the fifth year during the previous six years that the agency had reigned supreme. New clients added to DDB Needhams roster during the year included Leggs, CompuServe, Wells Fargo Bank, Clorox, Wilson Sporting Goods, Hamilton Beach, and Lockheed Martin. TBWA Internationals progress during 1996 bolstered Omnicoms global reach. New offices were opened in Latin America (Brazil, Chile, and Argentina), Asia (Singapore, Hong Kong, China), Europe (Warsaw, Munich, Berlin, and Cyprus), and in Durban, South Africa, the agencys third South African office. TBWA also followed the pattern of success established by its sister agencies by winning an enviable list of new clients and earning recognition for its creativity. The agencys Nissan commercial was named the Best of 1996 by Time, USA Today, Entertainment Weekly, and Rolling Stone; new clients included Novartis and Canon in Europe, and Gramercy Picture and Sara Lees Champion Sportswear in the United States.

On top of these three vibrant agencies stood Omnicom, selected in 1997 as Fortune magazines most respected advertising group and ranked by the Wall Street Journal as number one in the advertising industry in terms of total return to shareholders. Amid the accolades and applause directed at its three subsidiary agency companies, Omnicom posted strong financial totals, registering a 26 percent gain in net income in 1996 to $176.3 million and an increase in revenues from $2.26 billion to $2.64 billion. Much of the credit for Omnicoms robust growth went to Crawford, who had made the concept of Omnicom work as a viable corporate entity. Crawford stepped down as chief executive officer in January 1997, naming John D. Wren as his successor, but continued to serve as chairman. To Wren fell the task of continuing Crawfords legacy of success and nurturing growth and creativity during Omnicoms second decade of business.

Principal Subsidiaries

BBDO Worldwide Inc.; DDB Needham Worldwide Inc.; Diversified Agency Services; Communicade.

Further Reading

Alden, Robert, Bernbachs Advertising: A Formula Or DelicateArt?, New York Times, May 7, 1961.

Gleason, Mark, Big Bang of 86 Is Still Shaping the Ad World, Advertising Age, April 22, 1996, p. 3.

Kindel, Stephen, It Looked Good on Paper, Financial World, March8, 1988, p. 36.

MacDougall, A. Kent, Doyle Dane Bernbach: Ad Alley Upstart,Wall Street Journal, August 1965.

McCormack, Kevin, Crawford Managing Omnicom Like the Met:Playing a Leaner Tune, ADWEEK Eastern Edition, January 15, 1990, p. 1.

Rich, Laura, Omnicom Grows Organically, ADWEEK Eastern Edition, February 10, 1997, p. 6.

_____, The Omnicom Shopping Spree: How Wren and Co. PickedTheir Targets, AD WEEK Eastern Edition, October 14, 1996, p. 32.

Sharkey, Betsy, Omnicoms Operatics, ADWEEK Eastern Edition, April 20, 1992, p. 20.

Wood, James P., The Story of Advertising, New York: Ronald Press, 1958.

updated by Jeffrey L. Covell

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Omnicom Group Inc.

Omnicom Group Inc.

437 Madison Avenue
New York, New York 10022
U.S.A.
Telephone: (212) 415-3600
Fax: (212) 415-3530
Web site: http://www.omnicomgroup.com

Public Company
Incorporated:
1986
Employees: 60,000Gross Billings: $9.7 billion (2004)
Stock Exchanges: New York
Ticker Symbol: OMC
NAIC: 541613 Marketing Consulting Services; 541810 Advertising Agencies; 541820 Public Relations Agencies; 541830 Media Buying Agencies; 541840 Media Representatives; 541850 Display Advertising; 541890 Other Services Related to Advertising

The largest advertising group in the world, Omnicom Group Inc. operates as the parent company for three separate, independent advertising networks: BBDO Worldwide, DDB Worldwide Communications Group, and TBWA Worldwide. Omnicom also operates numerous independent agencies, interactive marketing firms, and public relations companies around the globe to offer clients a wide range of marketing or communications services. Omnicom was created in 1986 as a holding company, but its history stretches much further back, to the influential roles each of its three major subsidiary agencies played in the growth and development of the U.S. advertising industry.

ORIGINS OF BATTEN, BARTON, DURSTINE & OSBORN

The agency known as BBDO was the product of a merger. In 1919 Bruce Barton, Roy Durstine, and Alex Osborn opened an advertising agency on West 45th Street in New York City. A few years later, as its business grew, Barton, Durstine & Osborn moved to the seventh floor of a building on 383 Madison Avenue. Three floors above BDO was another advertising agency, the George Batten Company. It seemed odd having competing firms sharing the same address, so a merger was proposed. On May 16, 1928, the George Batten Company joined with BDO to form Batten, Barton, Durstine & Osborn.

The most important man at the Batten agency was William Johns. Johns was more experienced and considerably older than Barton, Durstine, or Osborn. He was therefore made president of BBDO while the job of chairman went to Bruce Barton. Durstine was vice-president and general manager, and Osborn ran a separate BBDO office in his hometown of Buffalo, New York.

Bruce Barton was not a typical advertising man. He admitted on numerous occasions that he and the profession were not well suited. Barton was trained in theology and philosophy, attracted to politics, and committed to his personal writing projects. He wrote two extremely popular books, The Man Nobody Knew (a reappraisal of the life of Jesus Christ) and The Book Nobody Knew (a similar reappraisal of the Bible). Then, in the mid-1930s, Barton ran for Congress. He was elected and held office for two consecutive terms. In 1940 he ran for senator but lost by 400,000 votes. Barton was involved only in the creative aspects of BBDO's enterprises.

Durstine was the opposite of Barton. He was in love with the advertising business and what it could obtain for him. Like a number of other agency heads trying to make money during the Depression, Durstine's workaholism became self-destructive. He began drinking heavily, lost his wife and Long Island estate, and was forced to retire from BBDO in 1939.

The vacancy left by Durstine's departure caused some reshuffling of BBDO's management. William Johns was now too old to handle the day to day operations of the agency. He was "promoted" to chairman, but relieved of all administrative duties. Osborn and Barton were then required to run the agency themselves. The readjustment proved beneficial, for BBDO was in need of a new approach to its advertising. Osborn in particular was instrumental in reorganizing the agency and directing it toward the packaged goods advertising business. From the very beginning BBDO had primarily handled accounts for "institutional" clients such as Du Pont Chemical, Consolidated Edison, and Liberty Mutual. Although they were consistent customers, these companies neither needed nor wanted extensive advertising. If BBDO was going to grow rapidly enough to compete with large and established agencies, it would have to do advertising for packaged goods. Not only were new packaged goods constantly introduced to the market, but also those already on the shelves were always being improved to keep up with the competition. In this environment advertising flourished and it proved to be Osborn's most important insight.

Between 1939 and 1945 BBDO gained a number of important accounts: Lever Brothers, B.F. Goodrich, Chrysler (Dodge Division), MJB Coffee, and the 3M Company. Not even the upheaval of World War II kept BBDO from growing. Billings increased from $20 million at the height of the Depression to $50 million at the end of the war. In 1946 management changes again took place at BBDO. Ben Duffy, a veteran account man with over 15 years experience, was elected president; and Charlie Brower, who was to lead BBDO in the 1950s and 1960s, became executive vice-president in charge of copywriting. Duffy was an excellent salesman who could close a deal quickly. When Foote, Cone & Belding resigned the $11 million American Tobacco Company account in 1948, Duffy went directly to see American Tobacco's George Hill and secured the account after one meeting. In Duffy's ten years at the helm of BBDO, the agency increased its billings from $50 million to over $200 million.

Unfortunately for BBDO, Duffy was prone to ill health. In 1956 he suffered a stroke in Minneapolis while visiting the chairman of General Foods. He could not continue as the head of the agency, and Charlie Brower replaced him as president. Brower had a "no-nonsense" approach to advertising. He felt as president of BBDO he had to do four things: 1) add $1 million to the payroll; 2) hire talent from the outside; 3) fire many of his best friends; and 4) do away with company time clocks, which he thought made the agency a factory instead of a creative enterprise.

When Duffy retired there was confusion at BBDO. Until Charlie Brower established himself as president of the company no one had actually been in charge. Revlon, a $6 million customer, canceled its account as soon as it heard of Duffy's retirement. Other clients followed Revlon's example. The agency was headed toward disaster when Brower won the most lucrative account in its history, Pepsi Cola. Within a matter of weeks BBDO was financially healthy once again.

COMPANY PERSPECTIVES

Omnicom Group (NYSE: OMC) is a strategic holding company that manages a portfolio of global market leaders. Our companies operate in the disciplines of advertising, marketing services, specialty communications, interactive/digital media and media buying services.

For BBDO the 1950s and early 1960s was a period marked by more than management readjustments and client shuffling. It was also a period in which BBDO became extensively involved in political advertising. Many agencies avoided politics altogether, but BBDO considered it as a normal part of its business. In 1948 BBDO ran its first ad campaign for a political candidate, Republican Thomas Dewey. Both candidate and agency lost the close election but, though Dewey left the political foreground, BBDO simply waited for the next election and a more marketable candidate. It found one in Dwight D. Eisenhower. In 1952 BBDO signed the Republican National Committee as a regular account, and did the advertising in Eisenhower's successful bid for the presidency. The firm was hired again four years later to handle Eisenhower's re-election campaign. Unfortunately for the Republican Party, and Richard Nixon in particular, BBDO's success ended with Eisenhower.

Outside the political realm BBDO continued to expand and sign new clients. Not only did it increase the number of its institutional customers such as CBS Broadcasting (1959) and the SCM Corporation (1961), but it also won product-oriented accounts such as Tupperware (1959), Autolite (1961), McGregor Sporting Goods (1964), and Pepperidge Farms (1964). To match this domestic growth BBDO began to expand internationally in 1959, opening up offices in London, Paris, Milan, Frankfurt, and Vienna. In 1964 BBDO acquired the Atlanta-based firm of Burke Dowling Adams and with it the accounts of Delta Air Lines and the various governmental agencies of the state of Georgia. The Clyne Maxon firm of New York, with its $60 million in billings, was also merged with BBDO in 1966.

By the time of the worldwide recession during the 1970s, Charlie Brower had retired as president of BBDO. His successor was Tom Dillon, who had been the agency's treasurer since the late 1950s. Like most ad agencies BBDO suffered considerable losses in domestic billings during these years of economic stagnation. Yet because of the way the company was structured, BBDO was able to endure this period without undue strain. By opening offices in new places around the world, the agency entered advertising markets which had previously been closed to it. This international expansion served to offset losses incurred in the domestic market. In addition, BBDO began selling shares to the public in an effort to diffuse operating costs.

In 1976 Bruce Crawford was named president of BBDO. He had been head of the agency's foreign operations. During his eight-year tenure billings at BBDO tripled to $2.3 billion, and his cost management measures kept the company from misusing the benefits of this growth. As one analyst said of BBDO in 1981, "I've never seen a company so conscious of cost controls."

Crawford retired in 1985 and was succeeded by Allen Rosenshine. Under his tutelage BBDO continued to expand by acquiring subsidiaries, creating a worldwide network. Though BBDO traditionally allowed local entrepreneurs the freedom to run their own offices, this practice came to an end under Rosenshine. A number of foreign and international clients expressed concern over these "local" shops. They thought there was too little direction coming from top management, and became wary of giving business to BBDO subsidiaries. To remedy the problem Rosenshine attempted to tighten the connections within the BBDO network and provide more centralized leadership.

When the question of a merger with Needham Harper Worldwide and Doyle Dane Bernbach came up, many wondered why BBDO was interested particularly when the other two were experiencing financial difficulty. What BBDO had to gain, however, was consistent international growth, something the other two had mastered. A merger with Needham and Doyle Dane Bernbach would provide BBDO with greater international presence, particularly in France, Canada, and Great Britain. According to the policy planning heads at BBDO, this improvement of the agency's foreign business was necessary for BBDO to maintain itself as a formidable worldwide advertising competitor.

KEY DATES

1924:
Maurice H. Needham creates an advertising agency.
1928:
BBDO is created by a merger of two New York City advertising firms.
1949:
Doyle Dane Bernbach is formed in New York City.
1984:
Needham Harper Worldwide is formed.
1986:
Omnicom is created as a holding company for its advertising units.
1995:
Chiat/Day is merged with TBWA to become TBWA International.
1997:
Omnicom acquires public relations and directory ad firm Ketchum Communications.
1999:
DDB Needham becomes DDB Worldwide Communications Group.
2000:
Omnicom wins the huge DaimlerChrysler account away from True North Communications.
2001:
The company buys David Brown Entertainment, a Hollywood marketing firm.
2003:
Omnicom buys interactive services firms.
2006:
Omnicom remains the world's top advertising group in revenues.

ORIGINS OF DOYLE DANE BERNBACH

When those within the advertising industry are asked which agency most exemplifies innovation and creativity, one firm above all others is mentioned, Doyle Dane Bernbach (DDB). In the world of advertising, where imitation is the rule, the Doyle Dane Bernbach agency has made itself an exception. Most ad firms follow familiar schools of thought, but not DDB. In the words of David Ogilvy, "They just sort of created an original school out of air."

In 1949 Ned Doyle and William Bernbach joined Maxwell Dane in the formation of a new advertising agency. Bernbach and Doyle had been trained at Grey Advertising, and Dane had owned his small ad company for a number of years. DDB's first year billings came to just $500,000, but something about its advertising style suggested it would soon be a major force in the industry. It hired the most creative people it could find, no matter where they came from. Among Max Dane, Ned Doyle, and Bill Bernbach there existed a well-defined division of labor. Doyle was the account executive in charge of winning and retaining clients; Dane took care of administration and financial matters; and Bernbach handled the creative concerns. Rarely did they cross into each other's designated spheres.

What made the firm unique in the ad industry was Bill Bernbach and his preoccupation with the "road not taken." His ideas were fresh, striking, and more often than not, couched in subtle humor. He sympathized with the public at large, which found most advertisements boring. His quest was to make ad campaigns exciting and fun while still focusing on the product's attributes. For him, advertising was an art, and as an artist he was primarily concerned with imagery, impression, and point of view.

Bernbach was also a good teacher. He was patient, precise but gentle in his criticisms, and had the ability to nurture natural ability. His "students" formed the firm's Creative Team: a small group of copywriters, artists, art directors, and photographers who produced the agency's campaigns. Bernbach led the group but not in an authoritarian manner. It was what he called a "horizontal hierarchy."

In the 1950s DDB displayed its style of advertising in four notable campaigns for four nearly unknown companies: Polaroid Cameras, Levy Bakery Goods, Ohrbach's Department Store, and El Al Israel Air Lines. These companies, like DDB, were attempting to establish themselves in their respective markets. Polaroid was overshadowed by Kodak, Ohrbach's by Macy's, and few people had ever heard of Levy's Bread or El Al Air. To compensate for this lack of public recognition, the agency created strikingly different ads featuring everything from a cat dressed in a woman's hat to an American Indian claiming "you don't have to be Jewish to enjoy Levy's real Jewish rye." Not only did the campaigns sell large quantities of cameras, clothes, bread, and airline tickets, they sold DDB advertising as well. In 1954 the Agency's billings were $8 million; by 1959 that figure had increased to $27.5 million.

In the early 1960s the agency won two new accounts that enhanced its reputation: Avis Car Rental Service and Volkswagen. In the rent-a-car business Hertz held the dominant market share. Far behind in second place, Avis wanted to increase its own market share. Most advertising portrayed a client in as favorable and strong a position as possible. DDB, however, disregarded this tradition; its campaign stressed Avis's weak position vis-a-vis Hertz. "We're number two," said the ads, "We try harder. We have to." This strategy worked. In two years Avis increased its market share by over 25 percent.

The Volkswagen advertising campaign was a similar story. These small German cars were not what the American consumer wanted, or so it appeared. Again, DDB converted a liability into a saleable asset. Hoping people had tired of the large and overly embellished American-made cars of the 1950s, the ad simply said: "Think small." The art of the ads was minimalist, usually showing a small picture of the car against a blank white backdrop. The text was equally odd. The short, simple copy was blocked in paragraphs that looked, in the words of copywriter Helmut Krone, "Gertrude Steiny." Not only did Americans purchase these "ugly" Volkswagens by the thousands, but the car became a symbol for an entire nonconformist generation.

Following these successes the agency won accounts from American Airlines, Seagram, International Silver, Heinz Ketchup, Sony, Uniroyal, Gillette, Bristol-Myers, and Mobil Oil. The 1960s were the golden age of advertising and DDB was at its forefront. As the 1960s gave way to the 1970s, the industry witnessed a return to conventional advertising techniques. This trend and the recession spelled trouble for the company. In 1970 DDB lost the $20 million Alka-Seltzer account, even though the "that's a spicy meat-ball" commercial was extremely popular and a favorite of the critics. Other agency clients quickly followed Alka-Seltzer's lead: Lever Brothers, Whirlpool, Sara Lee, Quaker Oats, Cracker Jack, Uniroyal, and Life Cereal canceled their accounts.

Fortunately for the agency, its growth during the 1960s provided it with enough revenue to absorb these losses, at least in the short run. Nonetheless, a company reorganization and reorientation was in order. In 1974 Neil Austrian joined the company as executive vice-president. He gradually transformed the company into a more orderly advertising network. Subsidiaries were acquired to strengthen DDB's worldwide presence and offer more comprehensive client services. In 1975 the agency's billings rose for the first time in the new decade, and this trend continued for seven years.

In October 1982, William Bernbach died of leukemia. His absence left a void at the agency. This raised a difficult question: could DDB continue without Bill Bernbach?

The question haunted the firm and earnings fell 30 percent during the year. This loss was compounded in the next two years by the resignation of important accounts. American Airlines canceled its account in 1983, its spot temporarily filled by Pan Am, which then left the agency itself. In 1984 Polaroid announced it would be taking its business elsewhere. The agency was particularly shocked by this resignation. Its commercials had helped make Polaroid the world's top-selling camera.

In the first half of 1986 Doyle Dane Bernbach was forced to lay off 24 staff members; it had lost almost $113 million in net earnings. The merger with BBDO and Needham Harper Worldwide represented a necessary business decision. The security afforded by the Omnicom umbrella would relieve the agency of its financial difficulties, and allow it to concentrate on what it did best, innovative advertising.

ORIGINS OF NEEDHAM HARPER WORLDWIDE

In 1924 Maurice Needham opened up his own advertising agency in Illinois. It was named The Maurice H. Needham Company. This title was changed in 1929 to Needham, Louis & Brorby, Inc. The firm then merged with Doherty, Clifford, Steers & Shenfield, Inc. in 1964 to become Needham, Harper & Steers. In 1984 the company name was again changed, this time to Needham Harper Worldwide.

As a Chicago-based agency, it traditionally avoided Madison Avenue-type advertising and was generally considered to have a stronger presence in the Midwest than the East. Until becoming part of Omnicom, Needham & Harper had not ranked among the largest worldwide agencies. Its size, however, had contributed to its success as smaller companies, feeling neglected and disrespected by large advertising agencies, often turned to Needham & Harper. These clients were the foundation of the firm's business.

In addition to that of Maurice Needham, the other name associated with the agency was Paul Harper. He came to the company in 1945 when it was Needham, Louis & Brorby. Harper had been educated at Yale and spent four years in the Marine Corps. After his discharge, he walked into Needham's Chicago office looking for employment. He had no resume, no writing experience, and no civilian clothes. Despite his scant qualifications Needham gave him a job as a copywriter, and Harper had soon made a name for himself, primarily in broadcast advertising. Harper gradually moved from copywriter to manager. In 1964 he became president of the company and supervised the acquisition by Needham of Doherty, Clifford, Steers and Shenfield in 1965. At this time the name of the agency was changed to Needham, Harper & Steers. In 1967 he became chairman and chief executive of the agency, and retained this position until his retirement in 1984.

During the late 1950s and 1960s when companies were substantially increasing their expenditures on advertising, Needham, Harper & Steers, though still only a mid-sized agency, grew along with the industry. It concentrated on smaller accounts but also retained a number of large Midwest clients, such as the Household Finance Corporation and the Oklahoma Oil Company.

In 1972 the firm followed the industry trend of publicly trading its shares. Unlike the larger agencies such as Ogilvy & Mather and Interpublic, Needham, Harper & Steers was unsuccessful in drawing a strong investment interest. Four years after going public Needham & Harper "went private" again. Although it serviced many small and mid-size accounts, Needham & Harper was primarily known for its "blue chip" clients. It won Xerox in 1968, McDonald's in 1970, Honda in 1977, and Sears in 1982. The agency produced the famous "Brother Dominic" commercials for Xerox, and the "you deserve a break today" slogan for McDonald's. Unfortunately for the agency, in 1984 McDonald's took its domestic business away from Needham and turned it over to Leo Burnett. The bad news continued in 1986, when Needham lost the $40 million Xerox account.

Many believed a merger with BBDO and Doyle Dane Bernbach would alter the "personality" of Needham. Even if the three agencies continued to operate as separate divisions of Omnicom, there was more to the merger than a simple name change. Some clients were not happy with the prospect of sharing Needham with competitors and the old conflict of interest problem became particularly pronounced when Campbell's Soup, a Needham client, would not stay with Omnicom if Heinz, a DDB client, remained. Similar difficulties arose between Stroh's and Busch beer, and Honda and Volkswagen automobiles.

The most important question among Needham customers was whether they would continue to receive the same attention to which they had been accustomed. Keith Reinhard, chairman and CEO of Needham Harper Worldwide, maintained the merger with Omnicom would help Needham attract and retain large clients, but claimed the agency would not treat its smaller customers any differently than it had in the past. Reinhard also hoped Omnicom would restore Needham's presence in the New York advertising market, something it had lacked since Xerox withdrew its account.

THE FORMATION OF OMNICOM: 1986

When the final documents were signed and Omnicom was formally created, the task of making sense and profits out of the amalgamation fell to BBDO head Allen Rosenshine. As some had anticipated, the process of combining three competing agencies under one umbrella corporation was a tiresome and fitful chore, sparking further speculation about the prudence of the merger in the first place. Omnicom limped from the starting block. More than $40 million was spent on merger and restructuring-related costs, leaving the company essentially profitless for its first year. Several clients were wholly opposed to the merger, and expressed their displeasure by taking their business elsewhere. One such client was RJR Nabisco, whose chairman stated, "As a client, I see disruption but little value. With very few exceptions, the wave of mergers has benefited the shareholders and managers of the agencies."

By the time the dust had settled after the merger, the three Omnicom agencies lost $184 million in billings directly attributable to the act of the merger itself. The assimilation process did not get any easier after the end of 1986. When Omnicom's 1987 financial totals were announced, they were depressingly low. For the year, the company earned only $32 million from commissions and fees of $785 million, or 4.1 percent in what traditionally was a double-digit margin business. The year did have its highlights, however, including the gain of several large accounts. Omnicom agencies landed a U.S. Navy account, a large portion of new Pepsi business, including Slice soft drinks and Pizza Hut, and the account for NEC Home Electronics. In all, Omnicom registered $280 million in new business during 1987, but this was not enough to offset other difficulties.

Bruce Crawford, who had departed BBDO in 1985, returned to the advertising world and signed on as Omnicom's chief executive officer. He took the helm in early 1989 and immediately began paring away superfluous managerial layers and divesting businesses. "With every merger," Crawford announced, "everybody talks about all these wonderful economies of scale, but it usually amounts to small potatoes. I believe the idea is to build businesses, not worry about the economies of scale to be realized by the joint buying of erasers. My belief is that the management structure is a little too complicated. I believe it is necessary to keep it simple, fast, and that corporate structure and overhead need to be minimized."

OMNICOM IN THE 1990S

Crawford made good on his words, divesting a number of Omnicom businesses while shuttering others. He developed a more concentrated presence in Britain and Europe, where Omnicom lagged behind other U.S.-based, international advertising agencies. By the beginning of the 1990s Crawford's strategy was beginning to work wonders, and Omnicom, after a torpid start, was demonstrating the vitality its creators had envisioned prior to the merger. Despite the effects of a stifling economic recession during the early part of the decade, Omnicom registered robust financial gains. In 1991 revenues increased to $1.2 billion and profits grew consistently. This growth trend continued after the recession, when the company increased revenues to $2.3 billion in 1995.

By mid-decade, any lingering doubt about the prudence of the merger had been thoroughly washed away. Omnicom held sway as a powerful and creative force, buying a number of firms both large and small to integrate into its network. In 1996 Omnicom bought Ketchum Communications, which had three strong business segments: traditional advertising, telephone directory advertising, and public relations. Rather than integrate Ketchum into TBWA, DDB Needham, or BBDO, its three units were divided among the subsidiaries. The company finished 1996 with robust sales of $2.64 billion and net income of $176.3 million. In January 1997 Crawford stepped down as chief executive but remained chairman. He was succeeded as CEO by Omnicom's president, John D. Wren, who would continue Crawford's legacy of success, growth, and creativity in Omnicom's second decade of business.

Wren had barely added the title of chief executive when Omnicom moved decisively into high-tech interactive marketing. Razorfish, Think New Ideas, Agency.com Ltd., Red Sky Interactive, Organic Online, Eagle Interactive, and Interactive Solutions all became part of Omnicom's Diversified Agency Services unit. In addition, Gaskell Associates, Fleishman-Hillard, and Meridian Technology Marketing were bought within a few months. Throughout the acquisition spree Omnicom's three major advertising units earned numerous awards and recognition, but in 1997 it was Omnicom's turn when it was selected as Fortune magazine's most respected advertising group. More good news was DDB Needham's winning of the coveted McDonald's account in 1997, which it had lost more than a decade earlier.

Omnicom continued to buy firms in line with its expansion plans in 1998, including London's GGT Group. GGT had been wooed by rival WPP Group, but chose Omnicom. The acquisition helped topple WPP Group from its perch as the world's largest advertising organization as ranked by Advertising Age (April 27, 1998). Omnicom's revenues climbed to just under $4.2 billion for 1997 with WPP trailing at $3.7 billion and Interpublic Group coming in at $3.4 billion. New York City, home to both Omnicom and Interpublic, remained the world's advertising hub.

Omnicom scored another coup in 1998 with its majority stake in I&S Corporation, one of Japan's top ten advertising agencies. Omnicom was the first Western firm to invest in Japan's top agencies, and its purchase of I&S Corporation, ranked eighth, opened the door for further opportunities in Asia. To maintain its edge in the global advertising market and retain its number one ranking ahead of WPP Group, Interpublic Group, and Publicis, Omnicom needed to offer an ever wider array of services to its clients, to be a "full-service" provider. To this end, Wren continued to consolidate some operations while expanding others. In 1999 Omnicom jumped into the burgeoning healthcare marketing field with the creation of Accel Healthcare Communications, part of its Diversified Agency Services division. Omnicom also bought half of the Alberta, Canada-based Critical Mass, all of the Irving, Texas-based M/A/R/C agency, the remaining interest in the United Kingdom's Abbot Mead Vickers for $600 million and merged it into BBDO, while DDB Needham reorganized and christened itself DDB Worldwide Communications Group.

A NEW ERA: 2000S

As the new century took hold, Omnicom lost its rank as the world's largest advertising group in revenues when WPP Group earned the top spot after its acquisition of the mighty Young & Rubicam agency. WPP Group's revenues spiked to over $7.9 billion for 2000, topping Omnicom's $6.9 billion. To its credit, Omnicom had been no slouch in the acquisitions department, buying majority stakes or all of 19 firms during the year. In addition, while WPP Group may have ended its reign, albeit temporarily, Omnicom had the last laugh earning most honors at the International Advertising Festival in Cannes for the third year in a row, and winning the prestigious DaimlerChysler account.

In the fall of 2001 Omnicom bought the Santa Monica-based David Brown Entertainment, a Hollywood product-placement firm, right before the terrorist attacks of September 11. While the U.S. economy, including advertising, went into a tailspin after the attacks, Omnicom weathered the storm. Wren did not slow down but aggressively pursued such goals as further immersion in Hollywood and its entertainment marketing services, as Omnicom's ad networks continued to create popular, award-winning ads. In the wake of the Enron mess and Arthur Anderson's troubles, Omnicom's board of directors underwent a major shakeup as seven members were ousted. Omnicom termed the shift as better corporate governance, but an insider cried foul calling it a "board clearance."

Despite a few lawsuits and a temporary stock tumble, Omnicom remained in good shape when its rivals were restructuring and laying off employees. Omnicom finished 2002 with revenues of $7.5 billion and net income of $643.5 million for the year.

In the mid-2000s Omnicom carried on with business as usual, acquiring companies with potential and churning out original, creative advertising. The company had regained its status as the world's largest advertising group, ahead of rivals WPP Group (second), Interpublic gaining ground at third, and Publicis S.A. at fourth. Each conglomerate housed some of the best and brightest advertising agencies, but had branched out to include a myriad of related communication services. Though Interpublic was Omnicom's only major U.S.-based rival, both continually sought international clients closer to the Paris, France-based Publicis and London's WPP Group. Revenues for Omnicom reached a remarkable $9.7 billion for 2004 and net income climbed to an all-time high of $723.5 million.

In 2005 Omnicom continued to best its competitors by gaining blue-chip accounts including Disney, Bank of America, and 7-Eleven stores. The sky truly seemed the limit for this "full-service" marketing and communications behemoth.

                  Updated, Jeffrey L. Covell; Nelson Rhodes

PRINCIPAL COMPETITORS

Interpublic Group of Companies, Inc.; Publicis Groupe S.A.; WPP Group Plc.

FURTHER READING

Alden, Robert, "Bernbach's Advertising: A Formula or Delicate Art?," New York Times, May 7, 1961.

Baar, Aaron, "Bright Beginnings," ADWEEK, January 9, 2006, p. 4.

Bidlake, Suzanne, "Omnicom Wants All of UK's Abbot Mead Vickers," Advertising Age, November 30, 1998, p. 2.

Comiteau, Jennifer, "Omnicom Continues to Build Empire," ADWEEK Eastern Edition, December 9, 1996, p. 5.

"An Empire of Happy Fiefdoms," Business Week, April 3, 2000, p. 68.

Endicott, Craig, "Omnicom Storms Past WPP," Advertising Age, April 27, 1998, p. S1.

Fahey, Allison, "True Snit," ADWEEK Southwest, November 27, 2000, p. 15.

Feuer, Jack, "Omnicom and IPG: A Continental Divide," ADWEEK, May 26, 2003, p. 18.

Garcia, Shelly, "Ketchum Brings Diversified Assets to Omnicom," ADWEEK Eastern Edition, January 15, 1996, p. 9.

Gleason, Mark, "Big Bang of '86 Is Still Shaping the Ad World," Advertising Age, April 22, 1996, p. 3.

Irwin, Tanya, "Maximum Overdrive," ADWEEK New England Edition, November 13, 2000, p. 14.

Kilburn, David, "Getting a Foot in the Door," ADWEEK Eastern Edition, June 29, 1998, p. 12.

Kindel, Stephen, "It Looked Good on Paper," Financial World, March 8, 1988, p. 36.

MacDougall, A. Kent, "Doyle Dane Bernbach: Ad Alley Upstart," Wall Street Journal, August 1965.

McCarthy, Michael, "Omnicom-Fleishman Deal Precursor to Mega PR Unit," ADWEEK Eastern Edition, April 7, 1997, p. 2.

McCormack, Kevin, "Crawford Managing Omnicom Like the Met: Playing a Leaner Tune," ADWEEK Eastern Edition, January 15, 1990, p. 1.

Petrecca, Laura, "Omnicom Group Gains Critical Mass," Advertising Age, October 18, 1999, p. 1.

, "Omnicom Stalks More Acquisitions," Advertising Age, February 2, 1998, p. 2.

Rich, Laura, "Mucho Communicado," ADWEEK Eastern Edition, October 20, 1997, p. 64.

, "Omnicom Grows Organically," ADWEEK Eastern Edition, February 10, 1997, p. 6.

, "The Omnicom Shopping Spree: How Wren and Co. Picked Their Targets," ADWEEK Eastern Edition, October 14, 1996, p. 32.

Santoli, Michael, "Too Much Hype? Ad Giant Omnicom Is a Good Company with Very Pricey Stock," Barron's, June 14, 1999, p. 19.

Sharkey, Betsy, "Omnicom's Operatics," ADWEEK Eastern Edition, April 20, 1992, p. 20.

Thomaselli, Rich, "Shakeup at Omnicom," Advertising Age, April 15, 2002, p. 1.

Wood, James P., The Story of Advertising, New York: Ronald Press, 1958.

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Omnicom Group Inc.

Omnicom Group Inc.

909 Third Avenue
New York, New York 10022
U.S.A.
(212) 935-5660

Public Company
Incorporated:
1986
Employees: 10,000
Billings: $5.5 billion worldwide
Sales: $754 million
Market value: $589 million
Stock Index: NASDAQ

In the summer of 1986 the advertising agencies of 16th-ranked Needham Harper Worldwide and 12th-ranked Doyle Dane Bernbach joined together with 6th-ranked BBDO to form Omnicom. With combined 1985 billings in excess of $5 billion and a combined income of $736 million, the new group is advertisings second largest worldwide holding company behind Saatchi & Saatchi.

The story of Omnicom has yet to write itself; at this time, it is still only the sum of its constituent parts, the three separate histories of BBDO, Doyle Dane Bernbach, and Needham Harper Worldwide.

BATTEN, BARTON, DURSTINE & OSBORN

BBDO was itself the product of a merger. In 1919 Bruce Barton, Roy Durstine, and Alex Osborn opened an advertising agency on West 45th Street in New York City. A few years later, as its business grew, Barton, Durstine & Osborn moved to the seventh floor of a building on 383 Madison Avenue. Three floors above BDO was another advertising agency, the George Batten Company. It seemed odd having competing firms sharing the same address, so a merger was proposed. On May 16, 1928 the George Batten Company joined with BDO to form Batten, Barton, Durstine & Osborn.

The most important man at the Batten agency was William Johns. Johns was more experienced and considerably older than Barton, Durstine or Osborn. He was therefore made president of BBDO while the job of chairman went to Bruce Barton. Durstine was vice-president and general manager, and Osborn ran a separate BBDO office in his hometown of Buffalo, New York.

Bruce Barton was not a typical advertising man. In fact, he admitted on numerous occasions that he and the profession were not well suited. Barton was trained in theology and philosophy, attracted to politics, and committed to his personal writing projects. He wrote two extremely popular books, The Man Nobody Knew (a reappraisal of the life of Jesus Christ) and The Book Nobody Knew (a similar reappraisal of the Bible). Then, in the mid-1930s, Barton ran for Congress. He was elected and held office for two consecutive terms. In 1940 he ran for senator but lost by 400,000 votes. Barton was involved only in the creative aspects of BBDOs enterprises.

Durstine was the opposite of Barton. He was in love with the advertising business and what it could obtain for him. Like a number of other agency heads trying to make money during the Depression, Durstines workaholism became self-destructive. He began drinking heavily, lost his wife and Long Island estate, and was forced to retire from BBDO in 1939.

The vacancy left by Durstines departure caused some reshuffling of BBDOs management. William Johns by now was too old to handle the day to day operations of the agency. He was promoted to chairman, but relieved of all administrative duties. Osborn and Barton were then required to run the agency themselves.

The readjustment proved beneficial to the agency, for BBDO was in need of a new approach to its advertising. Osborn in particular was instrumental in reorganizing the agency and directing it toward the packaged goods advertising business. From the very beginning BBDO had primarily handled accounts for institutional clients such as Du Pont Chemical, Consolidated Edison, and Liberty Mutual. Although they were consistent customers, these companies neither needed nor wanted extensive advertising. If BBDO was going to grow rapidly enough to compete with large and established agencies, it would have to do advertising for packaged goods. Not only are new packaged goods constantly introduced to the market, but also those already on the shelves are always being improved to keep up with competing brands. In this environment advertising flourishesthat was Osborns important insight.

Between 1939 and 1945 BBDO gained a number of important non-institutional accounts: Lever Brothers, B.F. Goodrich, Chrysler (Dodge Division), MJB Coffee, and the 3M Company. Not even the upheaval of World War II kept BBDO from growing. Billings increased from $20 million at the height of the Depression to $50 million at the end of the war.

In 1946 management changes again took place at BBDO. Ben Duffy, a veteran account man with the agency for over 15 years, was elected president; and Charlie Brower, who was to lead BBDO in the 1950s and 1960s, became executive vice-president in charge of copy writing. Duffy was an excellent salesman who could close a deal quickly. When Foote, Cone & Belding resigned the $11 million American Tobacco Company account in 1948, Duffy went directly to see American Tobaccos George Hill and secured the account after one meeting. In Duffys 10 years at the helm of BBDO the agency increased its billings from $50 million to over $200 million.

Unfortunately for BBDO, Duffy was prone to ill health. In 1956 he suffered a stoke in Minneapolis while visiting the chairman of General Foods. He could not continue as the head of the agency, and Charlie Brower subsequently replaced him as president. Brower was the obvious choice. He had been in charge of the creative side of BBDOs advertising for over 20 years and was responsible for much of the agencys success.

Brower had a no-nonsense approach to advertising. He felt that as president of BBDO he had to do four things: 1) add one million dollars to the payroll; 2) hire talent from the outside; 3) fire many of his best friends; and 4) do away with company time clocks, which he thought made the agency a factory instead of a creative enterprise.

When Duffy retired there was confusion at BBDO, and a number of important clients quit the firm. In fact, until Charlie Brower established himself as president of the company no one was actually in charge. Revlon, a $6 million customer, cancelled its account as soon as it heard of Duffys retirement. Other clients followed Revlons example. Brower did not allow this situation to continue for long. BBDO appeared headed toward disaster when Brower won for it the most lucrative account in its historyPepsi Cola. Within a matter of weeks BBDO was financially healthy once again.

For BBDO the 1950s and early 1960s was a period marked by more than management readjustments and client shuffling. It was also a period in which BBDO became intimately and extensively involved in political advertising. Many agencies try to avoid producing campaigns for political movements and parties so that copywriters are not forced to sell opinions they themselves may not hold or to which they may be vehemently opposed. BBDO is one of the few firms that has accepted political advertising as a normal part of its business.

In 1948 BBDO ran its first ad campaign for a political candidate, Republican Thomas Dewey. Both candidate and agency lost this close election but, though Dewey left the political foreground, BBDO simply waited for the next election and a more marketable candidate. It found one in Dwight D. Eisenhower. In 1952 BBDO signed the Republican National Committee as a regular account, and did the advertising in Eisenhowers successful bid for the presidency. The firm was hired again four years later to handle Eisenhowers re-election campaign. Unfortunately for the Republican Party, and Richard Nixon in particular, BBDOs success ended with Eisenhower. A BBDO makeup man was responsible for the grey shave look of Nixons face in his 1960 televised presidential debate with John F. Kennedy.

Outside the political realm BBDO continued to expand and sign new clients. Not only did it increase the number of its institutional customers such as CBS Broadcasting (1959) and the SCM Corporation (1961), but also it won product oriented accounts such as Tupperware (1959), Autolite (1961), McGregor Sporting Goods (1964), and Pepperidge Farm (1964). To match this domestic growth BBDO began to expand internationally for the first time in 1959, opening up offices in London, Paris, Milan, Frankfurt, and Vienna. In 1964 BBDO acquired the Atlanta-based firm of Burke Dowling Adams and with it the accounts of Delta Air Lines and the various governmental agencies of the state of Georgia. The Clyne Maxon firm of New York, with its $60 million in billings, was also merged with BBDO in 1966.

By the time of the worldwide recession during the 1970s, Charlie Brower had retired as president of BBDO. His successor was Tom Dillon, who had been the agencys treasurer since the late 1950s. Like most ad agencies BBDO suffered considerable losses in domestic billings during these years of economic stagnation. However, because of the way the company was structured, BBDO was able to endure this period without undue strain. By opening up offices in new places around the world, the agency entered advertising markets which had previously been closed to it. This international expansion served to offset losses incurred in the domestic market. In addition, BBDO began selling shares to the public in an effort to diffuse operating costs.

In 1976 Bruce Crawford was named president of BBDO. He had been head of the agencys foreign operations. During his eight year tenure billings at BBDO tripled to $2.3 billion, and his cost management measures kept the company from misusing the benefits of this growth. As one analyst said of BBDO in 1981, Ive never seen a company so conscious of cost controls.

Crawford retired on March 31, 1985 and was succeeded by another able manager, current president Allen Rosenshine. Under his tutelage BBDO has continued to expand by acquiring subsidiaries, creating for the agency a genuine worldwide network. It has traditionally been BBDO policy to allow local entrepreneurs the freedom to run their own offices, to encourage individuality and creativity. This practice is coming to an end under Rosenshine. A number of foreign and international clients have expressed concern over these local shops. They think there is too little direction coming from top management, and have become wary of giving business to BBDO subsidiaries. To remedy the problem Rosenshine has attempted to tighten the connections within the BBDO network and provide more centralized leadership.

So far it appears Rosenshine has instituted these changes without alienating those on the creative side of the business or retarding BBDOs ability to produce innovative advertising. In fact, in 1985 BBDO and its various sub-agencies won a total of 530 awards for creativity. Most notable of these was the Grand Prix Gold Lion at the Cannes Film Festival. The trophy is presented to the agency which produces the years best television commercial. The ad that won this coveted award was the Archeology commercial made for Pepsi Cola.

BBDO is such a large and vital member of the advertising industry that there has been some question as to why it needs or wants to join in a merger, particularly when the other two potential partners are currently experiencing financial difficulty. What does BBDO have to gain?

The answer is not hard to find. BBDO was one of the last major agencies to expand internationally, waiting until 1959. This late start has proven to be a handicap and has made BBDOs overseas growth uneven. For instance, BBDO is presently the number one firm in Germany and the number two firm in Australia; but is 17th in Canada, 26th in France, and 29th in Britain (the most important European market.) The situation was complicated in 1985 by BBDOs being forced to sell its interest in a major South African subsidiary at a considerable loss. This divestiture led to a decrease in BBDOs international revenues of 94% and removed BBDO from the South African market where it had been the top agency. The merger with agency. The merger with Needham and Doyle Dane Bernbach would provide BBDO with greater international presence, particularly in France, Canada, and Great Britain. According to the policy planning heads at BBDO, this improvement of the agencys foreign business is necessary if BBDO is to maintain itself as a formidable worldwide advertising competitor.

DOYLE DANE BERNBACH

When those within the advertising industry are asked which agency most exemplifies innovation and creativity, one firm above all others is mentionedDoyle Dane Bernbach. In the world of advertising, where imitation is the rule, the Doyle Dane Bernbach agency has made itself an exception. Most ad firms follow familiar schools of thought, but not Doyle Dane Bernbach. In the words of David Ogilvy, They just sort of created an original school out of air.

In 1949 Ned Doyle and William Bernbach joined Maxwell Dane in the formation of a new advertising agency. Bernbach and Doyle had been trained at Grey Advertising, and Dane had owned his small ad company for a number of years. Doyle Dane Bernbachs first year billings came to just $500,000, but something about its advertising style suggested it would soon be a major force in the industry. It hired the most creative people it could find, no matter where they came from.

Among Max Dane, Ned Doyle and Bill Bernbach there existed a well-defined division of labor. Doyle was the account executive in charge of winning and retaining clients; Dane took care of administration and financial matters; and Bernbach handled the creative concerns. Rarely did they cross into each others designated spheres.

What made the firm unique in the ad industry was Bill Bernbach and his preoccupation with the road not taken. Born in Brooklyn and educated in English and philosophy at New York University, Bernbach was the ad mans intellectual. His ideas were fresh, striking, and more often than not, couched in subtle humor. He sympathized with the public at large, which found most advertisements boring. His quest was to make ad campaigns exciting and fun while still focusing on the products attributes. He had little reverence for research. He felt it substituted statistics for ideas and emotions. For him advertising was an art, and as an artist he was primarily concerned with imagery, impression, and point of view.

Bernbach was also a good teacher. He was patient, precise but gentle in his criticisms, and had the ability to nurture natural ability. His students formed the firms Creative Team: a small group of copy writers, artists, art directors, and photographers that produced the agencys campaigns. Bernbach led the group but not in an authoritarian manner. It was what he called an horizontal hierarchy. We are all peers here, he said.

In the 1950s Doyle Dane Bernbach displayed its style of advertising in four notable campaigns for four near-unknown companies: Polaroid Cameras, Levy Bakery Goods, Ohrbachs Department Store, and El Al Israel Air Lines. These companies, like Doyle Dane Bernbach, were attempting to establish themselves in their respective markets. Polaroid was overshadowed by Kodak, Ohrbachs by Macys, and few people had ever heard of Levys Bread or El Al Air. To compensate for this lack of public recognition, the agency created strikingly different ads featuring everything from a cat dressed in womens hat to an American Indian claiming that you dont have to be Jewish to enjoy Levys real Jewish rye. Not only did the campaigns sell large quantities of cameras, clothes, bread, and airline tickets, they sold Doyle Dane Bernbach advertising as well. In 1954 the Agencys billings were $8 million; by 1959 that figure had increased to $27.5 million.

In the early 1960s the agency won two new accounts that were to further enhance its reputation: Avis Car Rental Service and Volkswagen. In the rent-a-car business Hertz held the dominant market share. Far behind in second place, Avis wanted to increase its own market share. Most advertising is meant to portray the client in as favorable and strong a position as possible. Doyle Dane Bernbach, however, disregarded this tradition; its campaign stressed Avis weak position vis-a-vis Hertz. Were number two, said the ads, We try harder. We have to. This strategy worked. In two years Avis increased its market share by over 25%.

The Volkswagen advertising campaign is a similar story. These small German cars were not what the American consumer wanted, or so it appeared. Again, Doyle Dane Bernbach converted a liability into a saleable asset. Hoping people had tired of the large and overly-embellished American-made cars of the 1950s, Doyle Dane Bernbach said simply: Think small. The art of the ads was minimalist, usually showing a small picture of the car against a blank white backdrop. The text was equally odd. The short, simple copy was blocked in paragraphs that looked, in the words of copywriter Helmut Krone, Gertrude Steiny. Not only did Americans purchase these ugly Volkswagens by the thousands, but the car became a symbol for an entire non-conformist generation.

Following these successes the agency won accounts from American Air Lines, Seagrams, International Silver, Heinz Ketchup, Sony, Uniroyal, Gillette, Bristol-Myers, and Mobil Oil. The 1960s were the golden age of advertisings creative revolution, and Doyle Dane Bernbach was at the forefront of this movement.

As the 1960s gave way to the 1970s, the industry witnessed a return to conventional advertising techniques. This trend and the recession which plagued the beginning of the decade spelled trouble for the company. In 1970 Doyle Dane Bernbach lost the $20 million Alka-Seltzer account, even though the thats a spicy meat-ball commercial was extremely popular and a favorite of the critics. Other agency clients quickly followed Alka-Seltzers lead. Lever Brothers, Whirlpool, Sara Lee, Quaker Oats, Cracker Jack, Uniroyal, and Life Cereal also cancelled their accounts.

Fortunately for the agency, its growth during the 1960s provided it with enough revenue to absorb these losses, at least in the short run. Nonetheless, a company reorganization and reorientation was in order. In 1974 Neil A. Austrian joined the company as executive vice president. He had expertise in the business aspects of advertising, something that had been missing at the agency. Gradually he transformed the company into a more orderly advertising network. Subsidiaries were acquired to strengthen Doyle Dane Bernbachs worldwide presence and offer more comprehensive client services. In 1975 the agencys billings rose for the first time in the new decade, and this trend continued for seven years.

On October 2, 1982 William Bernbach died of leukemia. His absence left a void at the agency. This raised a difficult question: Could Doyle Dane Bernbach continue without Bill Bernbach?

The question haunted the firm. In 1982 earnings fell 30%. This loss was compounded in the next two years by the resignation of important accounts. American Air Lines cancelled its account in 1983. Its spot was filled by Pan Am which subsequently left the agency a few months later. Then, in 1984, Polaroid announced it would be taking its business elsewhere. The agency was particularly shocked by this resignation. Its commercials had helped make Polaroid the worlds best-selling camera.

In the first half of 1986 Doyle Dane Bernbach was forced to lay off 24 staff members; it had lost almost $113 million in net earnings. The merger with BBDO and Needham Harper Worldwide represents a necessary business decision. It is doubtful that Doyle Dane Bernbach could continue if its fiscal situation were not improved. The security afforded by the Omnicom umbrella should relieve the agency of its present financial difficulties, and allow it to concentrate on what is does best, namely, innovative advertising.

NEEDHAM HARPER WORLDWIDE

In 1924 Maurice Needham opened up his own advertising agency in Illinois. It was named The Maurice H. Needham Company. This title was changed in 1929 to Needham, Louis & Brorby, Inc. The firm then merged with Doherty, Clifford, Steers & Shenfield, Inc. in 1964 to become Needham, Harper & Steers. In 1984 the company name was again changed, this time to Needham Harper Worldwide.

As a Chicago based agency, it has traditionally avoided Madison Avenue type of advertising, and is generally considered to have stronger advertising presence in the Midwest than in the East. Until becoming part of Omnicom, Needham & Harper had not ranked among the largest worldwide agencies. However, this provincialism has contributed to its success. Smaller companies, feeling neglected and disrespected by large advertising agencies, have often turned to Needham & Harper. This type of client has been the foundation of the firms business.

In addition to that of Maurice Needham, the other name associated with the agency is that of Paul Harper. He came to the company in 1945 when it was Needham, Louis & Brorby. Harper had been educated at Yale and had spent four years in the Marine Corps fighting in the Pacific campaign. After his discharge, he walked into Needhams Chicago office looking for employment. He had no résumé, no writing experience, and no civilian clothes. Despite his scant qualifications Needham gave him a job as a copywriter, and soon Harper was making a name for himself in advertising. He worked primarily in broadcast advertising. Most notably, he produced commercials for Johnsons Wax on the Fibber McGee and Molly radio show.

As Harper became a man of greater importance at the agency he gradually moved from copywriter to manager. In 1964 he became president of the company and supervised the acquisition by Needham of Doherty, Clifford, Steers and Shenfield in 1965. At this time the name of the agency was changed to Needham, Harper & Steers. In 1967 he became chairman and chief executive officer of the agency, and retained this position until his retirement in 1984.

During the late 1950s and 1960s when companies were substantially increasing their expenditure on advertising, Needham, Harper & Steers, though still only a mid-size agency, grew along with the industry. It concentrated on smaller accounts but also retained a number of large Midwest clients, such as the Household Finance Corporation and the Oklahoma Oil Company. For the former it created the Never borrow money needlessly slogan; and for the latter it coined Put a tiger in your tank.

In 1972 the firm followed the industry trend of publicly trading its shares. This move did not prove to be lucrative. Investors do not generally consider advertising to be a perennially stable business. More so than other industries, it is affected by the fluctuations of the economy. Smaller advertising firms are especially vulnerable and therefore pose higher risks to potential investors. Unlike the larger agencies such as Ogilvy & Mather and Interpublic, Needham, Harper & Steers was unsuccessful in drawing a strong investment interest. Four years after going public Needham & Harper went private again.

Though it services many small and mid-size accounts, Needham & Harper is primarily known for its blue chip clients. It won Xerox in 1968, McDonalds in 1970, Honda in 1977, and Sears in 1982. The agency produced the famous Brother Dominic commercials for Xerox, and the you deserve a break today slogan for McDonalds. Unfortunately for the agency, in 1984 McDonalds took its domestic business away from Needham and turned it over to Leo Burnett. The bad news continued in 1986, when Needham lost the $40 million Xerox account.

The merger with BBDO and Doyle Dane Bernbach may well alter the personality of Needham Harper. Even though the three agencies intend to operate as separate divisions of Omnicom, there is more to the merger than a simple name change. Already some clients have expressed displeasure with the prospect of sharing the agency with competitors. The old conflict of interest problem has become particularly pronounced. Campbells Soup, a Needham and Harper client, will not stay with Omnicom if Heinz, a Doyle Dane Bernbach client, remains. Similar difficulties have arisen between Strohs and Busch beer, and Honda and Volkswagen automobiles.

The most important question among Needham and Harper customers is whether they will continue to receive the same advertising attention to which they have become accustomed. Fortunately, says one such client, Keith Reinhard will still be around. Reinhard joined the firm in 1964, became president of NH&S/Chicago in 1980, chairman and chief executive officer of NH&S/USA in 1982, and chairman and chief executive officer of Needham Harper Worldwide in 1984. He has impressed staffers, colleagues, and customers alike with his integrity and hard work. He maintains that the merger with Omnicom will help Needham attract and retain large clients, but claims that the agency will not treat its smaller customers any differently than it has in the past. Reinhard also hopes Omnicom will restore to Needham a presence in the New York advertising market, something it has lacked since Xerox withdrew its account in 1986.

Principal Subsidiaries

BBDO Worldwide Inc.; DDB Needham Worldwide Inc.; Diversified Agency Services

Further Reading

The Story of Advertising by James P. Wood, New York, Ronald Press, 1958; Bernbachs Advertising: A Formula or Delicate Art? by Robert Alden, in The New York Times, 7 May 1961; Doyle Dane Bernbach: Ad Alley Upstart by A. Kent MacDougall, in The Wall Street Journal (New York), 12 August 1965.

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