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News Analysis 1 Dec 2020 - 3 min read

'No tension': Clemenger Chair Robert Morgan on CHEP's Howatson exit to build a full service media, tech and ad group

By Paul McIntyre and Josh McDonnell - Executive Editor and Senior Writer

The Omnicom-owned, BBDO controlled boss of Clemenger Group, Robert Morgan, has quashed talk of tension between he and outgoing CHE Proximity CEO, Chris Howatson, as the trigger for this week’s news of a split. The new indy group, Howatson + White, is set to launch in the new year with 30 people and grand ambitions to build Australia’s next homegrown but new-world Clemenger or George Patterson with full-service capabilities across tech, creative, media, CX and e-commerce. 

As Clemenger boss Robert Morgan finalises two major acquisitions within weeks in e-commerce and digital consulting to centrally service its agency brands, he has hosed down market conjecture that a rift had emerged between he and CHEP’s Chris Howatson, long considered a lead contender in Morgan’s own succession plan at Clemenger.

“No, that’s not true,” he tells Mi3. “It’s just not true. I want to make it very clear that whilst we’re extremely disappointed that they’re leaving [Howatson and Chief Creative Officer Ant White], it doesn’t alter the fact that Chris has built a terrific model, a terrific agency. In many ways it’s ground-breaking and in many ways it is as good as anything in the world. We’re going to fiercely build on that and continue to nourish it in terms of capabilities – and if that means adding capabilities, that’s what we’re going to do.”

Howatson has grown revenues at CHEP from about $8m when he took over in 2012 to upwards of $80m. Morgan confirms the revenue figure is “somewhere up there in that range”. 

Howatson has gone to ground since news of his CHEP exit was officially confirmed this week after more than a week of intense industry speculation that he was set to depart and launch his own venture.

He has a three-month notice period and is set to leave in February to launch an independent, full service communications, tech and commerce group. Mi3 understands Howatson wants to build the next iconic Australian communications group in the league of one-time homegrown powerhouse rivals, George Patterson and Clemenger. Patts has been buried (now part of WPP-owned VMLY&R) as a local brand although Clemenger remains a dominant agency force.

But the aspirations of Howatson + White has competition aplenty. The indy sector is more active with start-ups and established players this year than it has been in at least a decade. More than a dozen new and established indy shop bosses detail their upbeat outlook for next year here as they sniff brand and marketer frustration with multinational agency networks, holding companies and their capabilities and structures.

Clemenger for decades asserted its Australian and staff-owned credentials aggressively versus the global networks – until it sold its majority share to long-time minority investor BBDO.

But it is this Australian and independent position that Howatson, a 19-year veteran of Clemenger, is said to want to recreate.

Howatson has long been a lead contender for the top role at Clemenger to replace Morgan, who was the first non-Clemenger family member to chair the group.

“Chris’s future with our group was extremely broad,” says Morgan when asked about succession planning. “He’s been fantastic. He must have been about 12 when he started. I remember when I went to Brisbane way back and there’s this little chap sitting at the back of the building doing a university degree part time. I tried very hard to keep him. I’m not as a good a salesman as I thought I was, obviously. This is something he wanted to do.”

Morgan says a hunt is now on for a new CEO and it could be a left-field candidate. Meanwhile, he agrees there’s more action in the independent sector this year than he’s seen for a long time, but says it goes in cycles.

“I’ve said this to you every time you’ve ever asked me this over the years: We welcome competition from independents,” says Morgan. “That’s one of the great things about our industry. People can start their own. There’s been a lot of them along the way. Some of them are not there anymore. I admire them. I’m very complimentary to some of them, like Special Group, and others that have come out.

“But in this day and age, you need greater capabilities, particularly in the technological industries, to be able to deliver and help clients. That’s where they feel they need more now than perhaps they used to. There’s going to be a role for independents and there always will be – but I do believe passionately that in this environment, you need more capability and more to the tech capability.”

 

Big deals

Morgan is facing the same challenge at Clemenger Group, which has and remains a staunch defender of creativity. It is now moving quickly to shore-up its credentials beyond smart ideas executed cleverly to data and e-commerce. Several acquisitions are imminent in which Clemenger’s two agency model (Clemenger and CHEP as lead brands among 30 in the portfolio) will be serviced centrally in the booming areas of e-commerce and digital and tech consulting.

“We’ve got a couple of seriously important acquisitions on at the moment that will further enhance both agency network capabilities,” he says. “They’re in e-commerce and what I call digital consulting. Clemenger Group still believes in the marriage of high-level creativity with high-level tech capability and bringing that technological capability to the development and distribution of creative. Hopefully we’ll get them up before Christmas. They will be centralised and service the different agency groups.”

Morgan, who sits on the global board of Omnicom’s BBDO network, says Australia is faring far better as a market through Covid than most markets. Clemenger has shed “far less than 5%” of its 1,350 staff and surprisingly, Morgan says the group’s $550m in revenues are off just circa 10% this year.

 

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Paul McIntyre and Josh McDonnell

Executive Editor and Senior Writer

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