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‘No kneejerk reactions’: holding group CEOs say clients facing new lockdown wave with ‘more level headedness’ as agency return to work plans shift

By Josh McDonnell - Senior Writer

11 August 2020 5min read

Mediabrands CEO Mark Coad: "The ultimate goal is to go back [to the office] at the point where we know it will stick."

By Josh McDonnell - Senior Writer

11 August 2020 5min read

Despite Victoria being declared a state of disaster and NSW again recording daily double-digit cases of positive COVID tests, the CEOs of the major holding groups say their clients have learnt from the first wave of lockdowns and are not panicking. Omnicom, Mediabrands, Dentsu and GroupM office returns range from 20-50% but have slowed again.

What you need to know:
  • The CEOs of Australia’s major holding groups are reporting less “kneejerk reactions” among clients with the latest restrictions, even with Victoria being declared a state of disaster.
  • Many clients plan to keep advertising, although dollars are still moving away from heavily impacted media, including outdoor.
  • GroupM CEO Mark Lollback says there is “more level headedness” among marketers compared to the first wave of lockdowns.
  • Mediabrands’ Mark Coad says brands have “done their diligence” since the first lockdown and have “less cause for panic”.
  • Omnicom Media Group’s Peter Horgan says clients are more resilient as they were able to “see what was coming” in the second wave of lockdows.
  • Dentsu CEO Angela Tangas says marketers aren't showing the same concern as they did early in Covid
  • Omnicom currently has 50% of its staff back in the office in some form, while other groups have 20% to 30% of staff back at work.
  • Many have slowed their plans for people to return to the office given the current situation in Victoria and NSW.
  • Publicis Groupe would not respond to Mi3 for an update on client sentiment but did on WFH 

“What’s different this time is marketers and agencies have learned how to rapidly adjust and redeploy budgets to still meet their objectives, something media owners have been a part of supporting.”

- GroupM CEO Mark Lollback

No kneejerk reactions

They might be locked down in Melbourne, but Dentsu CEO Angela Tangas and Mediabrands CEO Mark Coad say clients haven’t succumbed to any “mad panic” in the second wave of lockdowns triggered by COVID-19.

In Sydney, GroupM boss Mark Lollback and Omnicom Media Group CEO Peter Horgan say there is far less “kneejerk reactions” among clients this time around.

Lollback told Mi3 marketers were acting far more “optimistically” during the second wave of lockdown. He says there have been far fewer campaign cancellations, with clients learning from the first lockdown period that “activity needs to remain on”.

“There’s a far more adjusted sense of optimism when it comes to the current climate. Of course, Victoria remains an unknown, but brands are still keeping up the spend,” Lollback says.

“What’s different this time is marketers and agencies have learned how to rapidly adjust and redeploy budgets to still meet their objectives, something media owners have been a part of supporting.”

While the Westpac and Melbourne Institute national consumer sentiment index fell by 6.1 percentage points in July to 87.9 (include 10.4 point slump to 85 in Victoria), Coad says there has been “less cause for panic” this time around. He says brands and agencies have done their “due diligence” in terms of developing response plans, enabling more effective and less reactive media ad spending.

“No one has taken their finger off the pulse since this began. Every agency is checking their plans for each brand constantly. This has negated any real need to quickly pull spend or panic and go into hibernation again,” Coad says.

“Yes, there may be the occasional change in channel choice or spend redistribution, but not in the dramatic fashion we saw [earlier this year].”

Horgan agrees, saying Covid's way of working has become “business as usual” and agencies need to be planning ahead on behalf of their clients.

“If you take Victoria, while no one could have predicted the exact response, there was a pretty fair chance the government was going to react,” Horgan says, referring to the introduction of the latest restrictions.

“Those agencies that were paying attention could recognise the possible impact to their client’s activity and swiftly plot the best response.”

Horgan says this has been easier to do in recent weeks thanks to media owners being more flexible around pausing and moving campaigns.

Dentsu's Tangas says effective channel mix planning has been a key factor in keeping some clients spending.

She says the past six months have proven that agencies need to be “more responsive than ever” when planning clients’ media, creative or digital strategies.

In terms of the current Victorian situation, Tangas says it is still “early days” for predicting how it will depress ad spending, which was already tipped to shrink at least 20% nationally this year.  

"We know right now the economic environment is extremely volatile and much of its movement is predicated on government regulation and the containment of the COVID spread," Tangas says.

"So when you've got that level of disarray, you need to be full aware of which levers you can pull and how and when to do so - this is what I think a lot of agencies learned in the first wave of lockdown.

"What it ultimately boils down to now is being able to effectively plot a short-term channel mix, that not only meets a client's objectives but can also be managed as restrictions are loosened or tightened."

Publicis Groupe would not respond to questions from Mi3 on how its clients are responding but did give a work-from-home and office transition update.  

“We have slowed down our phase four return to work. This would have allowed any agencies who were not at COVID capacity levels to see more staff return. At this stage, we are constantly monitoring the situation.”

- Publicis Groupe CEO Michael Rebelo

Returning to work, but when?

With Victoria in strict lockdown, plans to reopen Melbourne agencies have been put on hold indefinitely.

Meanwhile, some Sydney agencies are rethinking their return-to-work plans in the wake of continued outbreaks in suburbs surrounding the CBD such as Surry Hills and Darlinghurst.

Agencies in Brisbane, Perth and Adelaide are bringing staff back into offices at the discretion of their global owners and in-line with state government recommendations.

On any given day, about 20% of Publicis Groupe’s Sydney staff are in the office. CEO Michael Rebelo says the company continues to tell its staff they can opt to work from home for the rest of 2020. He says the people who come into the office really enjoy the experience and are reminded of the personal and professional benefits of “human connection”.

“We have restricted staff who currently live in hotspots from coming into the office to ensure the safety of all staff and have strict COVID safety guidelines in the office,” Rebelo says.

“We have slowed down our phase four return to work. This would have allowed any agencies who were not at COVID capacity levels to see more staff return. At this stage, we are constantly monitoring the situation.”

Coad says that while some Mediabrands staff are back in the office, there are no concrete plans to force staff back.

“We don’t want to waste time coming up with plans, putting them in place and getting halfway through, only to be forced back into lockdown,” Coad says.

“The fact is, WFH is working and we are hitting our KPIs, while also keeping our staff’s safety front of mind. For us, the ultimate goal is to go back at the point where we know it will stick and when our staff feel that they are in the most comfortable position to do so.”

Half of Omnicom’s Sydney and Brisbane staff are now working back in offices and Horgan says they have responded well to the strategy of slowly letting a limited number of staff return.

“We’ll be remaining at 50% across the board, except for Melbourne of course, until the social distancing rules are relaxed to the point where they no longer impact daily operations. We can’t move ahead until there is more guidance from the government on that matter,” Horgan says.

“There is a strong interest in being able to return to work, with teams bouncing off the ability to socialise, share ideas and utilise the ‘traditional’ face-to-face working environment.”

Dentsu’s five-month-old “Be the Best You” initiative, which allows people to work from home, will continue for the rest of the year.

Tangas says the plan, which also includes mental health support for employees, has been well received and proves there is no immediate need for many staff to stop working from home. Dentsu allow employees to enter its premises and Mi3 understands there is a sign-in register that includes temperature checks.

“We made the decision very early on to create an effective strategy that would look after our staff [and ensure] the business would be able to continue working as efficiently as possible,” she says.

Two floors of GroupM’s Berry Street office in North Sydney are understood to have reopened and COVID safe. The Bond, the main Sydney office of GroupM’s parent WPP, is also open for a limited number of staff. Pre-booking and screening are required before staff can return to offices.

“WPP [Australia] has worked really hard to open COVID-safe office spaces for our teams if they need it. We are very carefully following all state and national guidelines to protect our people, and are regularly communicating to staff about any updates or changes,” Lollback says.

“There are only three reasons our staff can attend the office – for their wellbeing, to collaborate on projects and pitch work.”

“The fact is, WFH is working and we are hitting our KPIs, while also keeping our staff’s safety front of mind. For us, the ultimate goal is to go back at the point where we know it will stick and when our staff feel that they are in the most comfortable position to do so.”

- Mediabrands CEO Mark Coad

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