Laura Desmond has spent a career looking after the fortunes of some of America’s biggest brands. Ahead of the Publicis-Omnicom mega-merger, the chief executive of giant ad agency Starcom MediVest Group talks trends, tech and Twitter
It didn’t take long for Laura Desmond to realise she had an affinity for the marketing industry. As a freshman in college, her class was given an assignment by her rhetoric professor to pick out an ad campaign for any brand and argue whether it was beneficial or negative for society.
“It was a class of 20 people, and I was the only one to say that advertising was good,” she recalls, with a smile. “The brand was Crest toothpaste — which is ironic because Procter & Gamble is now our biggest client.”
Alongside P&G, the list of clients with whom Desmond has worked reads like a who’s who of corporate America. Coca-Cola, Heinz, McDonald’s, Kellogg’s and General Motors have all come under her purview at one point or another in her career.
Along the way, the chief executive of Starcom MediaVest Group (SMG) since 2008 has been named one of the world’s most powerful women by Forbes, Executive of the Year by Mediaweek and one of the Wall Street Journal’s Women to Watch. As global head of one of the world’s largest creative ad agencies, Desmond is better placed than most to give a candid view as to what’s hot and what’s not in the fast-paced world of media.
While SMG doesn’t report its financials, parent company Publicis Groupe — one of the world’s ‘big four’ agencies, which owns other media giants such as Leo Burnett and Saatchi & Saatchi — posted an 11.5 percent growth in net profit in 2013, to $1.1bn. From a regional perspective, Publicis’ revenue performance in the UAE was up by 8.7 percent, considerably more than in most emerging markets. That figure compares more than favourably with an aggregated revenue decline of 5.9 percent during the same period in Publicis’ operations in the BRIC (Brazil, Russia, India and China) and MISSAT (Mexico, Indonesia, Singapore, South Africa and Turkey) nations.
The world’s emerging markets have come under the spotlight this year due to the US Federal Reserve’s decision to pull back on its bond-buying programme, which has caused currencies and stocks in a series of jurisdictions to plummet, but Desmond says that the strength of Starcom’s clientele and the demographics in those countries mean that she’s not losing too much sleep over the issue.
“In some countries, not only do you have economic variability, but sometimes you also get some political variability too, so there’s always concern,” she says. “What I also know is that the partners we do business with… are all large capitalised strong companies that can weather variability.
“That isn’t to say you won’t get the inevitable declines that you saw in 2009 during the great recession, but I also believe that because we are operating at scale in most of these emerging markets, we have the kind of base that can weather a storm.
“I have a lot of belief in middle class consuming markets around the world. They want a better life, they want to work hard — and that relates directly back to the clients we serve and the products they make. And I think that’s a very solid foundation from which to start.”
But perhaps the biggest item in Desmond’s intray is the merger between Publicis and Omnicom, a deal that will create a $35bn behemoth — easily the planet’s biggest ad agency. The merger is currently going through a series of approvals in various parts of the world, and Desmond is unable to comment widely on the deal as it hasn’t been fully closed yet.
But in response to a question about whether the merger will mean job cuts in the Middle East — where both companies have substantial operations — Desmond sounds a positive note.
“If you look at what John Wren [CEO of Omnicom] and Maurice Levy [CEO of Publicis] have stated publicly as well as privately, this merger is about resetting the standard of global communications. It’s not about job cuts, job reductions and redundancies — they’re quite serious about that. So there’s nothing in our pre-merger plans that indicate anything different.”
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