The rise of PHD is not so much an overnight success story as a slow and steady ascent to the incredible heights it has reached—capped off by a year that made the shop the envy of the media-buying universe.
“For a long time PHD was growing, but not at the pace we needed. If anything, it was a conflict shop for Omnicom Media Group,” explains Nathan Brown, CEO of PHD U.S.
PHD, Adweek’s Global Media Agency of the Year for 2016, scored a number of impressive, high-profile wins over the past year—most notably, the $3 billion global Volkswagen account as well as Delta Air Lines and Carnival Cruise Line in the U.S. and a number of international clients.
“This is the year that, to everyone else, PHD became everything we knew it would be,” says Omnicom Media Group chairman and CEO Daryl Simm.
Last year, PHD racked up $4 billion of media spend in wins; Recma says it generated $750 million in revenue, a 15 percent gain over 2015. It was also the year the agency opened nine offices worldwide and began the scrupulous process of recruiting 500 new team members to meet the demands of the massive VW business, one of the largest media account wins in history.
How VW was won
Mike Cooper, PHD’s worldwide CEO, wasn’t doing anything extraordinary on the afternoon he learned his agency had won VW’s media account after 16 months of pitches and meetings. The story feels almost anticlimactic following the grueling journey the agency went through to eventually scoop up the business.
Cooper stepped out on a Friday afternoon to grab a sandwich when his phone rang, and VW informed him PHD would be its sole media agency, in charge of business for all eight nameplates, including Audi, Bentley and Porsche.
“After they told us we won, I couldn’t think of anything else, to be honest with you. They were probably telling me all sorts of important things that I kind of put off to one side,” Cooper jokes.
“I was walking back to the office and I saw that [Cooper] was putting the phone down. He came over and just hugged me. I figured it was something significant,” adds Mark Holden, PHD’s worldwide strategy and planning director.
VW was one of the most highly sought after accounts amid what’s become known as “Mediapalooza,” when more than $18 billion in media spend went up for review across the span of several months in 2015. When VW decided to place its entire media business in review that February, every major media agency was briefed. Over the following 16 months, PHD would work tirelessly—including arranging more than 90 meetings across 33 markets and introducing the prospective client to some 170 execs at the Omnicom shop—to prove itself worthy of the account.
“Every single time [VW] had a meeting with PHD people, they said that meeting was professionally run, on time, answered the brief and was done with collaborative spirit and personality,” recalls Hilary Jeffrey, evp of PHD Worldwide.
The true test came in the final months of the pitch, as PHD duked it out against fellow finalists Mediabrands (a unit of IPG) and WPP incumbent MediaCom. In each of three regions, including the U.S. and VW’s home turf of Germany, PHD executed seven different brand presentations for the client at a single meeting.
“I think that really is a test of your strategic firepower as a network,” Cooper says. “It’s a test of your talent, it’s a test of your abilities—to be able to do seven simultaneous presentations individually for each brand with a different strategic recommendation is something that really sorts you out as a network. That’s not an easy thing to do.”
“I first saw a peek into what PHD was about when I first came on board,” says Oliver Maletz, head of media and connections planning at VW Group. “We were able to see what capabilities they had. They were intriguing back then, and they proved themselves in the year-and-a-half-long pitch process. It was probably one of the most vigorous pitches in any industry, and I’ve been doing this for 28 years.”
This wasn’t the agency’s first interaction with VW, however. In 2010, PHD began adding some VW business to its roster, including Porsche’s global media account and some work from Bentley and Skoda.
(It needs to be noted that the VW brand continues to recover from the emissions-rigging scandal that rocked the company in 2015. VW agreed to pay $15 billion to U.S. authorities and owners of a half-million vehicles. Last November, the company announced a major restructuring that would result in the elimination of 30,000 jobs.)
Perhaps one of the greatest signs of the agency’s extensive capabilities and skills come not just from winning VW but also in PHD’s ability to, in the midst of the 90-plus-meeting chaos, keep existing clients happy, to grow organically among those clients and to bring in still more new accounts, all without suffering any major losses regionally or globally (Recma points to Australian insurer Greenstone as the lone loss).
On a large scale, winning VW in its entirety already demonstrates the agency’s ability to build business with existing relationships, but smaller-scale examples from the past year include the addition of six Nordic markets for Bayer, along with the retention of Finland after a competitive pitch. PHD also managed to expand responsibilities for existing clients like chocolate maker Ferrero, adding 30 markets across 18 months, most recently South Africa and Mexico.