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MOMENTUM

Leo Burnett Tailor Made has enjoyed great victories and rapid growth, especially in the last three years since it incorporated Tailor Made as its philosophy and practice management. Since then, the number of employees has expanded from 170 to 400; it opened an office in Brasilia, the capital of Brazil, to tend to the SECOM (Social Communication Secretariat for the Presidency of the Republic) account; and the agency’s revenue growth in 2013 grew to be 37 percent higher than that of the previous year.

Over the past three years, the agency has won more than 14 major accounts, increased its market share in digital and is among the 10 largest agencies in the Brazilian market. Recent major client wins include food ingredients company Ajinomoto Brasil and leading tire manufacturer Pirelli.

In the wake of these figures, the agency has grown significantly in creativity, earning some impressive results in major national and international festivals, with more than 115 awards won just in the last year. Recognitions include the most-awarded Leo Burnett agency in Cannes in 2014, the No. 1 Brazilian agency with the most Lions at the festival (22), one of the most creative in the world by The Gunn Report and Agency of the Year of the Leo Burnett Worldwide network in 2013.

Cases like “Vem Pra Rua” (“Come to the Streets”) for Fiat, “My Blood is Red and Black” for Hemoba/Vitória and the “Bentley Burial” for ABTO were just some of the campaigns that gained national and international acclaim. And they all demonstrated our HumanKind credo of creativity rooted in fundamental human need.

These successes are just some of the reasons why Paulo Giovanni, CEO of Leo Burnett Tailor Made, was recently inducted into the Brazilian Marketing Hall of Fame, a highly coveted honor awarded by the Brazilian Academy of Marketing. This award recognizes his outstanding contribution to making Brazilian marketing more modern and ethical, as well as higher in quality.

It's the agency that's known for Tony the Tiger, Toucan Sam and Mayhem — one that's long been known as the mascot shop, one that crafted massive traditional creative campaigns for companies like Kellogg's and McDonald's.

And while Leo Burnett continues to have much of its revenue from big, traditional ad campaigns, it's seeing serious growth potential in its Arc brand as the industry continues to see an uptick in client demand for new and innovative shopper and retail executions, along with mobile and data.

The Publicis Groupe network is responding by expanding Arc's footprint in all major markets, especially overseas, starting with the opening of four additional offices in India, Brazil, Mexico and Colombia by the end of the year, making a total of 29 of Leo Burnett's 85 offices stocked with Arc talent and capabilities. The agency is also expanding its e-commerce footprint and expertise, forging a new relationship with Amazon.com to improve its clients' marketing efforts within the Amazon platform.

That such disciplines are considered sexy now is signals just how far they've come. The work of marketing-services agency brands like Arc was for years seen as representing all that's boring and uncreative in the ad world: the below-the-line shopper marketing, promotions and retail marketing that were once summed up with an end cap promoting shampoo in the grocery aisle.

But things are changing as those disciplines get more creative, innovative and sophisticated, thanks in part to the rise of mobile and e-commerce.

Steady growth
According to Publicis Groupe's ZenithOptimedia ad expenditure forecasts, shopper promotions is estimated to grow 3% from 2014 to 2015. It's not explosive growth, but it's a steady growth, particularly after a severe slowdown during, and even in the couple years after, the recession. Annual shopper-marketing spending will grow somewhere in the 10% to 15% range over the next few years, said Peter Cloutier, the CMO at shopper agency Catapult. And, he added, "these increases are generally being allocated from above-the-line budgets with an intent to drive shopper behaviors versus traditional mass awareness drivers."

Globally, Leo Burnett has 9,000 employees, and currently more than 1,000 employees work exclusively on Arc. Arc's business accounts for an estimated 20% of Burnett's revenue worldwide. In the U.S., 25% of revenue is from Arc. Leo Burnett worldwide Chairman-CEO Tom Bernardin said that in the last three years, Arc's revenue has nearly doubled. The overseas investment in Arc "is because of the growth we've seen in the U.S. and the U.K., we and want to create the same kind of growth trajectory in our revenue [globally]."

Arc's biggest clients include Procter & Gamble, for which it handles traditional shopper marketing and e-commerce globally; McDonald's, for which it handles in-store retail and mobile; Intel, which it won in 2013; Sprint; and MillerCoors. This year alone, according to executives familiar with the business, Arc added several P&G brands to its already hefty account.

Genesis of Arc
Arc's beginnings started in 2003 when Publicis Groupe rebranded more than 30 marketing-services offices in 19 countries as Arc. In 2004 Publicis Groupe tacked a few more acquisitions together, including Frankel, Leo Burnett's interactive shop iLeo, Semaphore Partners and Arc to form Arc North America. Leo Burnett gained control through the acquisition of D’Arcy Marketing Services.

But much of Arc's integration into Leo Burnett was a difficult transition. Current and former employees talked of power struggles regarding which side of the business had more authority over shared accounts, and which disciplines, such as digital, fell under which brand.

Arc executives said that Leo Burnett executives didn't respect Arc's capability, treating it as an uncreative afterthought or a mere add-on. "Leo Burnett people felt like they could control everything," said one former Arc executive. "Part of the perception was that Burnett was above the line, and therefore more important. ... And if one client that used both Arc and Burnett was getting bigger on the Arc side, there was discomfort when things were not labeled Burnett. ... Suddenly they'd start managing it more hands-on with Burnett people."

Burnett's North American President Rich Stoddart, who oversees both Arc and Leo Burnett in North America, said that time years ago was difficult for everyone, given different management teams for Arc and Burnett, along with different budgets, human resources teams and benefits packages, not to mention offices in different buildings.

Turner Duckworth, the world’s leading design firm, is now part of the Leo Burnett family. And just like any family members, our two companies are quite alike. They, too, believe that the best brands don’t simply tell a story; they inspire people to act. They also have a reputable name and are unrivaled in their specialty, having won everything from the inaugural Cannes Grand Prix in Design to a Grammy. And they are the only design company to be inducted into the Clio Hall of Fame. They work with some of the world’s leading brands across a diverse range of categories, including Coca-Cola, Visa, Miller, Oreo, Jacobs, Google, Glenlivet, Samsung, Waitrose and even Metallica. They also share our ambition of winning big design opportunities and becoming the best brand designers in the world. Burnett’s partnership with this undisputed leader in design underlines the importance we place on stellar design and creative advertising to deliver effective and meaningful communications programs for blue-chip clients.

After an extensive and rigorous pitch, Leo Burnett has secured the title of Samsung’s global agency of record. This reinforces our leadership position with one of the biggest, most innovative marketers on the planet. With a fundamental role in helping them navigate a fast-changing communications landscape, there will be ample opportunities to continue to grow this business, develop meaningful and breakthrough creative ideas, and further develop our social and mobile capability.

In today’s marketplace, we are creating for multiple channels and platforms, many requiring different types of content. Some content has a shorter life span and some lacks a large media buy behind it.

Recently we've started to approach this smaller-scale content differently than paid media broadcast television production, with a style of shooting that is fast, cheap and nimble.

Welcome to The Greenhouse.

Created by Vincent Geraghty, Leo Burnett Chicago's Executive Director of Production, The Greenhouse is a team of associate producers on deck to create activation and participation content, case studies and client internal-facing projects — ones that come with a small budget and a limited timeline and call for a scrappy team.

So how does it work? How does The Greenhouse successfully produce nontraditional content? To begin with, content production projects call for a different approach. They require fewer reviews and less scrutiny. The Greenhouse team is part of the conversation from the start, at the table to understand scope, timing and budget, and to set parameters around the editing process. And in the end, clients are presented with an authentic piece of content, delivered in a short time with an affordable price tag, while associate producers are gaining valuable experience and insight into a career in production.

To date, the team has worked with clients such as Hallmark, Allstate, Nintendo, Samsung and Kellogg’s. Have a project in mind? Reach out to Vincent Geraghty at Vincent.Geraghty@leoburnett.com to start the conversation.

Connecting markets through cases and key learnings is critical to building our activation capabilities globally. This is the purpose of Arc Interactions, a monthly video conference featuring specific topics and cases designed to further our knowledge in the activation space.

Since Arc Interactions began almost one year ago, our audience has grown to nearly 100 for each session. A recent survey of participants showed that more than 95 percent find Arc Interactions beneficial to their work and nearly 50 percent have used Arc Interactions discussions, information and materials to support business in their own markets.

Join us each month for an informative conversation, many with featured guests, including Tom Bernardin in December.

Contact Lynsey Elve at lynsey.elve@leoburnett.com to learn more or for instructions on how to tune in.