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News Analysis

J&J joins one-stop shop movement, backs Omnicom to lead media, digital ...everything

By Josh McDonnell - Senior Writer

22 March 2020 3min read

By Josh McDonnell - Senior Writer

22 March 2020 3min read

Like Samsung Australia, Johnson & Johnson's Australian unit wanted global approval to break from its international alliances to find new efficiencies and a different operating model. It got both, ending a four month pitch process and a new CMO, mid-process. 

What you need to know:

  • J&J has opted to consolidate all creative, media, digital, public relations, healthcare, social and shopper marketing via a consolidated agency model
  • DDB was the incumbent creative agency, with all J&J brands now falling under its remit.
  • DDB will now handle media planning, the first time in 10 years for the agency, while buying will channel through Omnicom sister agencies, OMD or PHD.
  • UM previously held the media account; WPP's JWT also handled some product creative

 

Creative-led consolidation

J&J isn't the first brand this year to reassess its overall agency operations, with the likes of Samsung also taking a consolidated agency model approach with DDB stablemate CHE Proximity at the start of the year.

J&J's previous agency model was viewed as siloed and "not connecting the dots across the consumer journey", according to correspondence sighted by Mi3, dealing with multiple agencies with differing priorities, with at times a single agency dictating the approach.

The new model, which is housed primarily within DDB Group, sees the creative agency draw on various talent pools throughout Omnicom. However, this is the first time media planning will be handled by the agency in over a decade.

In 2005, DDB made a play for the media market in Melbourne, at the time recruiting high profile agency names such as Chris Nolan, Mal Dale and Paul Blatchford, however, the move was ultimately blocked at a global level.

 

What J&J were looking for

While J&J's current model was said to have delivered well on ‘traditional’ assets and media, the company was looking for more thought leadership and agility in the core capabilities of digital, consumer journey marketing (precision/ personalization/ ecom), influencer marketing & PR and HCP.

Through moving to an integrated agency model J&J are focused on putting the consumer back at the heart of what it does, with insight-led creative ideas that drive advocacy, and consumer journey-led media planning that closes the loop.

It is also understood that the measure of success under the new agency model is business growth and ROI, not media metrics.

The new agency model was assessed on the following criteria:

  • Integrated marketing solution that can deliver to all elements of the consumer experience
  • Innovative media strategy, planning and buying
  • Channel agnostic creative ideas that drive advocacy via earned media and HCP 
  • Creative execution which displays a deep understanding of data, digital media targeting and formats
  • Shopper marketing/e-commerce integration to close the loop

 

Sister agency thinking

Clemenger Group CEO Chris Howatson previously told Mi3 that most Australian clients are growing revenues through price rises rather than top line customer growth, which is motivating efficiency initiatives and leading to “general agency consolidation”.

Against that backdrop, he thinks CHE Proximity's approach stands alone.

“It is different to the WPP Horizontality and Publicis One models in that clients are looking not for a stitched together holding company solution, but a single agency model,” Howatson suggests.

“Importantly they don’t want a bespoke agency,” as those shops “turn into ghettos quickly and deliver very average long-term thinking. Instead they want an agency brand that has a strong culture, diversity of clients, depth of capability and strong body of work.”

Howatson says the underlying drivers for these models are motivated by four criteria:

  • Cost saving: Reduction in overlap. Savings in agency multiplier due to scale. Stronger application of performance based remuneration because the agency has full influence
  • Depth of capability: Proven experience in connected thinking, bringing together data, tech, CX and media
  • Impact of thinking: If saliency is the fastest way to grow brand power, clients want evidence of big strategic/creative thinking that grows brands
  • Operating simplification: One agency can help clients operate more efficiently, which can support their requirements for reduced internal headcount.
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By Josh McDonnell - Senior Writer

22 March 2020 3min read

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