Miles Young recently won the top job at ad company Ogilvy Group because of his strong track record in running its Asian operations. Now, the question is whether he can repeat that success in the U.S., a bigger, tougher market, and one in the grip of wrenching change.After 13 years as head of Ogilvy's Asia-Pacific business, the 53-year-old Englishman is moving from Hong Kong to New York to take the helm of the WPP Group unit, whose clients include American Express, International Business Machines and Unilever.
As Ogilvy CEO, Miles Young hopes to foster a less U.S.-centric view of the marketplace.
Mr. Young brings with him some impressive credentials: In the past five years, he doubled Ogilvy's Asian revenue to $500 million. The agency dominates the increasingly important Chinese market in terms of reputation, and says it hires an average of 1.2 new permanent employees in China every day.
"Miles has built the best agency network in Asia," says Greg Paull, the principal of R3, a Beijing-based consulting firm that advises marketers on working with ad agencies. "But he is going to come into his new position as a middleweight, rather than a leader," Mr. Paull says, referring to Ogilvy's more-modest standing in the U.S. market.
Mr. Young's debut as Ogilvy's chief executive comes at a critical juncture. The teen advertising business in the U.S. is on the brink of a recession. Spending is expected to grow a paltry 2% this year, despite such major-league advertising events as the Beijing Olympics and the U.S. presidential election.
Ogilvy's business in the U.S., which still accounts for the bulk of its roughly $2 billion in annual revenue, has been flat in recent years. And the company has struggled to pick up new clients. Over the past 18 months, it has come up short in its pitches for major accounts, such as wireless carrier Sprint Nextel and retailer Office Depot.
Mr. Young says he is just beginning to formulate a strategy to cope with these issues when he formally takes the reins in January. He says he thinks Ogilvy has already gone a long way toward fixing its dearth of new clients simply by going after new accounts more aggressively. He points to the New York office's recent win of the Stolichnaya vodka account as a "kind of virility test for some of the changes that have been made in the last year."
The executive, who dresses and acts more like an Oxford don than an ad man, is largely an outsider in the New York-centered ad industry. And he says he will try to usher in a less U.S.-centered view of the marketplace. Mr. Young, who has traveled extensively, owns a cinnamon plantation in Sri Lanka and is a major collector of Asian art.
But he says he has much in common with his high-profile predecessor, Shelly Lazarus, who is known for building close ties to the top brass of Ogilvy's clients. She plans to stay on as chairman of Ogilvy, and will help Mr. Young develop relationships with its clients.
Ms. Lazarus, who is on the boards of General Electric and Merck, is one of the industry's few top executives with cachet beyond Madison Avenue. But Mr. Young says he is probably more comfortable than she is at getting involved in the nuts and bolts of the business. "My critics would say I am too detail-oriented," he adds.
He may also be more likely to give his staff homework. In July, he led a group of academics, businessmen and Chinese and Russian students on an Ogilvy-sponsored train trip to Russia's Lake Baikal for an academic study of globalization and the environment. Mr. Young assigned participants a five-book reading list.
Filling big shoes won't be Mr. Young's only challenge. Madison Avenue, which built much of its reputation on TV advertising, has been turned upside down by the teen advertising on the Web. As marketers shift their ad dollars online, the industry is working overtime to catch up. The big agencies are buying up digital-ad shops and trying to recruit digitally minded executives.
Ogilvy promoted a top-notch digital creative executive to the upper echelons of its creative department several years ago. Last year it was one of the first ad agencies to hire a chief digital officer.
Ad agencies also have been forced to become more versatile, integrating businesses like public relations and direct marketing, which they long considered relative backwaters, into their other offerings. Over the past few years, Ogilvy has moved in that direction by combining its traditional advertising division with its OgilvyOne marketing-services unit.
Mr. Young says he'll try to better implement the cross-disciplinary approach to marketing services that was set out by his predecessor. He also says he will "put a real premium on creativity," and invest in strategic planning, the consulting service offered by agencies to help marketers better understand consumers and market opportunities. "If you have those two things, those are what clients really want to pay for," he adds.
That's the agency's best defense, he says, from the onslaught of new digital players such as Google, which is getting into the business of selling traditional advertising and creates tools for planning campaigns.
Mr. Young also has its own ideas about what it means to be a global company. His experience in Asia and Europe, he says, has convinced him that most management theories about international business are wrong.
"Global does not mean the export of vanilla from one home base around the world. It means harnessing intelligence from all sorts of different sources and leveraging it into a solution," he says.
Mr. Young says that within 10 years he hopes Ogilvy "will be the most culturally diverse agency in the world." By that, he means "the least Anglo-Saxon."
By: Geoffry Fowler and Suzanne Vranica
Wall Street Journal; September 17 2008
