The Essence of media: people, data and automation together

WPP's Essence has made its name as Google's digital media agency - with a culture that's more like a tech company than a traditional buying shop. And now its global CEO has been picked to transform parent company Group M. So how much does Essence's rise point the way to the future?

We have created a culture that looks more like a technology company or a data company than maybe some of the things that you have seen from traditional agencies," Christian Juhl, global chief executive of Essence, says.

"We recruit from different institutions. We recruit from different practices. We train in a very different way. We have some incentives that are a little bit different than the rest, which has been a problem occasionally at WPP."

Juhl, who says "I prefer T-shirts and sneakers to suits and ties", was speaking at WPP’s investor day in December, where he explained how the 1,800-strong media agency began life in London as a digital start-up in 2005 and counts Google as its biggest client.

"Our mission is to make advertising more valuable to the world," he said. "It’s about bringing connections much closer between brands and consumers. It’s about getting rid of things you hear about like fraud. It’s about using data, technology and analytics to identify where those [connection] points can come together, so we can make real ‘brand experiences’ on behalf of our customers."

As Juhl spoke about Essence, it sounded like he was offering a vision for the intelligent agency of the future: "Definitely, it’s a different type of culture. When you come in, it feels very much like an engineering or even a consulting organisation."

He went on to outline how Essence believes "the future of media" has three major components:

  • A data-driven approach to everything.
  • Using that same data to inform personally relevant experiences.
  • Leveraging the cloud, artificial intelligence and machine learning to make sure the results are proven, from both a brand and direct-response perspective.

It looked significant at the time that Mark Read, the then newly-appointed chief executive of WPP, wanted to showcase Essence – rather than one of the bigger media shops, MediaCom, Mindshare and Wavemaker, or the media-buying parent company, Group M. And so it has proved. Read announced in July that Juhl will replace Kelly Clark as global chief executive of Group M on 1 October – a move that confirmed Essence as one of the most important global media agencies to emerge in the past decade.

Roots outside the agency sector

Essence’s London home near Oxford Circus has a prosperous air with three-wheeled barista vans installed as permanent fixtures around the office, where staff can order coffee – albeit there is no Google-style free canteen.

It might look like a typical agency, but Essence has always had a different approach because its British co-founders, Matt Isaacs, Andy Bonsall and Andrew Shebbeare, were outsiders. 

Isaacs was a management consultant and Bonsall and Shebbeare worked in financial services, and the trio saw how digital marketing was going to transform the ad industry – with the potential to make media buying and measurement more accountable and transparent.

Sir Charles Dunstone, co-founder of Carphone Warehouse, was an early supporter of the agency and the retailer became a client. Winning Google’s digital buying account soon afterwards in 2005 was pivotal because that drove expansion in the US and Asia.

The founders had one eye on an exit by the time they recruited Juhl, an American ex-Razorfish executive, to run North America from San Francisco in 2013, making him global chief executive in 2014. 

A year later, WPP won the race to buy Essence, which likely sold for over £75m, according to estimates at the time. It was such a prize that one of the losing bidders, Omnicom, launched a rival data-driven agency, Hearts & Science.

Shebbeare (pictured, top), who is brainy and bearded, is the only founder to remain at Essence and has gone on to be chairman. "I felt I had a lot of unfinished business," he says, because he oversaw the setting up of the agency’s practices, software design such as its campaign management platform, Olive, and recruitment of the leadership team.

Selling to WPP meant Essence could move from being a digital agency to a "full-service" media network. Importantly, Essence could expand faster geographically and diversify by reducing its dependence on Google.

The timing was good as the Google-Facebook duopoly was taking hold while the Association of National Advertisers was investigating "non-transparent" practices at US media agencies. "It never occurred to us there was anything other than a disclosed way of doing business," Shebbeare says. 

Rob Norman, who was chief digital officer of Group M at the time and is now a senior advisor, recalls: "Buying Essence was a unanimous decision at Group M. We saw it as a technical and cultural opportunity to transform the way the media practice operated. People, data and automation together had to be our future. Christian’s elevation [to run Group M] is a clear signal of the continuation of that intent."

Simon Nicholls, partner at GP Bullhound, advised Essence on its sale and says there was "a strong fit" with WPP from the start because, unlike a lot of independent agencies, it already had large clients and was used to running "very big international campaigns with trillions of data points". He adds: "I’m not sure there’s a more successful deal that WPP has done in the last five or 10 years in terms of how it’s turned out."

Johnny Hornby, chief executive of The & Partnership, which runs a joint venture, M/SIX, with Group M, knew Essence long before its sale to WPP and says: "It’s absolutely the right thing that a digitally led, tech-savvy business is the one to lead the media charge for WPP. The future of media lies more in the Essence world."

Significant wins

Group M moved some key clients, including Comcast, Target and BT, into Essence in 2017 – largely because of weakness at sister agencies Maxus and MEC, which merged to form Wavemaker – and it now has $4bn in billings.

Two significant wins have been T-Mobile in North America last year and L’Oréal in the UK and Ireland this year, because they demonstrate the agency’s consulting and computer engineering credentials.

When T-Mobile pitched its media account, it brought some digital buying in-house and appointed Essence as a consultant, as well as using the agency for more traditional services. That showed in-housing can be an opportunity as well as a threat if an agency can offer training and access to best practice on an ongoing basis.

The L’Oréal review was another example of tech-savvy collaboration as Essence devised a new unit, Beauty Tech Labs, which will give the client’s marketing and media teams direct access to Essence’s project management software and technology. L’Oréal’s ambition is that Essence and WPP will be "operating very much like a tech company, rather than a holding company" that can support the in-house team, build technology and create a culture of "learning", according to Gayle Noah, media director of L’Oréal in the UK and Ireland. "The idea of Beauty Tech Labs is really to deliver this agency of the future," she says.

The L’Oréal win had additional significance because Wavemaker was the incumbent and Essence showed Group M could change its offer to retain one of the world’s top advertisers.

The Google relationship

Juhl: 'Our mission is to make advertising more valuable to the world'

Some rival agencies believe Essence remains too dependent on Google but they concede the agency benefits from having the inside track on how the world’s biggest media owner operates. Read cites the Google relationship as evidence that WPP is well-positioned for the future.

"Together we have developed some of the most advanced technologies, services and processes," Juhl said at WPP’s investor day, pointing to automation, personalisation, "platform-based collaboration" and tools to improve search and biddable media as key areas.

Juhl’s team has spent a lot of time on driving efficiency and speeding up ways of working for Google – creating what Essence calls "self-driving campaigns".

He explained how a traditional, biddable media campaign requires "a lot of manual steps, multiple technology systems and multiple processes" – "with a ton of people touching it at each point" from planning and forecasting, to ad copy approval and execution. One mid-sized campaign could easily take "50 people hours" – equivalent to the work of seven people over a day or one person over seven days. 

However, Essence managed to "shrink that down" to "one person in seven minutes" by devising computer scripts that automate various manual processes and by merging technology systems. The agency also uses data and machine learning so that it can automatically pick keywords, make forecasts and pre-select ad copy "that we know is going to perform, based upon historical norms" to save time. 

"What that really allows us to do is not necessarily to shrink time," Juhl says. "It allows us to do all of this on a much more systematic basis for all of our clients around the world."

By reducing complexity and manual tasks such as reporting, Essence can focus on "insight" and "rapid experimentation" that leads to a culture of "continuous learning and optimisation", according to Juhl, who described it as "a revolutionary shift". It matters because "we strongly believe in future that all media is going to become addressable" and most of that one-to-one messaging and targeting will need to be done by machines, not humans, he said.

Shebbeare and his co-founders always believed that media and creative should be managed closely because the message needs to be customised in the age of addressable media. Essence understood the potential of machine learning and artificial intelligence not only to improve bidding and optimisation but also to inform the creative and execution.

The technology is "for stories, not just for sales", as Emily Henderson, head of media at Google EMEA, put it when she spoke alongside Shebbeare at Advertising Week Europe in March.

In their session, Shebbeare and Henderson gave an example of a Google marketing campaign that ran on the recipe section of The Guardian’s website. The client wanted ads for its intelligent assistant device, Google Home, to be contextually relevant when placed next to editorial. The idea was that the user would see an aubergine recipe and the ad would read: "Hey Google, add aubergines to my shopping list." 

However, using keywords to match an ad proved unreliable – for example, trying to establish whether a vegetable tart was savoury or sweet. So, Essence took a different approach based on inferences, not rules. It used image recognition and machine learning to scan photos from about 250 recipes and build a model that could be "scaled" and "easily replicated" with thousands of other recipes – without having to pre-screen more images.

The result was Essence created ads that were "assembled on the fly, entirely through machine learning", according to Shebbeare, who added there are "so many possibilities" for other brands.

"It’s a new definition of creative," Henderson said. "The old world of ‘what a creative is’ is long gone."

In the new world, creative directors, programmers and data scientists collaborate, and teams from Essence and Google will meet for a hackathon, sometimes with a creative agency and even a publisher, to test ideas. 

"That way of working, we believe, is the new norm," Henderson said. "It really does take a diverse set of skills to bring these things to life." 

She added: "From a creative’s perspective, in particular, it’s opening up new pathways, new ways to be creative – it’s not just making 30-second TV spots any more."

Still, observers say Essence is on a learning curve when it comes to working with creatives because the agency’s heartland has been in dynamic, content optimisation in the digital space, rather than brand strategy. Omnicom’s OMD still handles Google’s offline media. 

Bringing some of Maxus’ talent and clients into Essence increased the agency’s "full-service" know-how but Juhl admitted at the start of this year: "The challenge remains in front of us to take what we’ve been able to do in digital and do it in analogue channels."

A deliberate growth strategy 

Essence’s rise has been steady but there was a moment, shortly after the sale to WPP, when the agency looked in danger of being eclipsed by Hearts & Science, which launched in 2016 and picked up two huge accounts, Procter & Gamble and AT&T. A few years on, some of the hype around Hearts & Science has faded, although its founder, Scott Hagedorn, has been promoted to run Omnicom Media Group in North America.

Shebbeare says Hearts & Science has "some amazing leaders, particularly Scott", and "I like to think that there are similarities between the ideas that we set out with and they set out with". 

But he adds: "No matter how brilliant any leader is, there is a pace of growth and change that is not sustainable – and agencies are people-driven businesses. You cannot win two of the largest accounts overnight and expect to be able to staff them, motivate everybody, create a compelling culture and deliver good work product. It’s just not possible. And, therefore, the expectation that created was totally unreasonable."

By contrast, Essence has been "very measured about our growth over the years", he maintains. "Sometimes people have asked if Essence was slowing down and if we’d had our moment. That didn’t change our point of view about what was appropriate for an agency’s growth rate. I continue to think that 20% to 30% a year, globally, is the sweet spot for us. It allows us to motivate our people and allows us to deliver for our clients."

Shebbeare urges brands that are considering changing agency "to think really hard about whether that agency can sustain the growth – no matter what price commitments or proposition is put in front of them".

Essence’s caution was part of the reason why it limited the number of people that joined from Maxus. There is room for growth because Essence is one-quarter of the size of MediaCom, Mindshare and Wavemaker, which each employ around 8,000 people globally.

As Essence looks to the future, Kyoko Matsushita, previously its Asia-Pacific chief executive, will succeed Juhl as global chief executive and the agency has just carried out a brand refresh. Japanese-born Matsushita becomes a rare woman in Group M’s senior ranks.

Juhl and Shebbeare know that making advertising "more valuable to the world" will not count for much unless the ad industry cleans up the digital marketplace.

Juhl says: "There’s no doubt that the combination of cloud computing power plus AI represents a significant opportunity for pictures and words to be optimised." But "machines aren’t particularly ethical" and "we need to think very heavily" about how the ad industry collects "signals" and uses AI to optimise against them, he warns, adding that it’s important "we don’t lose the magic of creativity in that process".

Shebbeare says the ad industry is at a crossroads. "I really want to emphasise how important it is that this technology is used responsibly and thoughtfully," he told Advertising Week Europe. "It could be completely squandered – and it kind of has been, to date."

He went on: "There are lots of very, very advanced uses of machine learning that are incredibly nefarious. This technology can be used for fraud, it can be used for voter manipulation and it can be used to make victims of the most vulnerable in society. Or it can be used to redeem the advertising ecology and create a new era of sustainability. And that choice is on us."

Essence is determined to be on the right side of that argument.

Innovating at the speed of thought

Essence prides itself on a "test-and-learn" culture. In addition to its regional operating units, the Americas, EMEA and Asia-Pacific, it has a separate product innovation arm, 2Sixty, with its own P&L.

"One of the fundamental principles of Essence is that it encourages innovation at the fringes," Iain Niven-Bowling, executive vice-president of 2Sixty, says.

The division (which is named after the speed of thought – 260mph) includes Olive and the "self-driving campaigns" technology, and the idea is that these products can be sold on an enterprise basis across Group M and WPP.

South African-born Niven-Bowling talks about how 2Sixty has a philosophy of developing products that are "complimentary" to clients’ and agencies’ needs, rather than competing with them. 

"If you want to in-house, we’re not going to be worried," he says. "We want to be a partner with you and collaborate."

For example, 2Sixty has created standalone pieces of software that later became part of Google’s tech stack, which Google itself uses.

There is a relentless, scientific approach to improvement. "Everything we do we want to achieve a 30-times impact," he says. 

2Sixty’s open-minded approach extends to who it hires. The team comes from tech and software companies, gambling firms, e-commerce and fintech players as well as media agencies. Many have "computer science or maths backgrounds".

Recruitment involves "very rigorous" tests, including for coding skills and cultural fit, although Niven-Bowling admits competing with the tech giants on salary and benefits is "hard".

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