Brands without borders: OMD’s Nikki Mendonca on the digital single market
Sharing data across jurisdictions remains a headache for brands that operate within a number of different markets. The situation may be about to become a lot easier in Europe, however, due to the European Commission’s digital single market strategy. “I’m optimistic about what these changes would mean for brands,” says Nikki Mendonça, president of OMD across Europe, the Middle East and Africa (EMEA). “Ultimately, it’ll be better for the consumer.”
Mendonça is responsible for overseeing the performance of agencies across 60 countries, managing chief executives working for both local and international clients in more than 85 offices. She tells City A.M. about tailoring creative to different cultures, and how the agency managed to grow during the financial crisis.
Has a global online community aligned tastes among consumers in different countries?
Since 2007, I’ve seen more homogeneity in behaviour than stark differences between markets. This is largely due to smartphone penetration, which is now 60 to 70 per cent in most countries in EMEA. There is wider access to social media, and we are seeing more consistency in behaviour on those platforms. But as a society more generally, we’re also gravitating towards more common conversations. This explains why Netflix, and others like it, are rolling out across EMEA as we speak – because the ability to create content consumed by people in similar ways is now becoming the norm.
There are, of course, still some differences between markets. Countries like Russia prefer to use their local media channels like VKontakte and Yandex, instead of Facebook or Google. But largely, we are seeing a trend towards more usage of global media channels and properties across the world.
Is this making it easier to roll out creative across different markets?
Largely, more homogeneity and the fact that most people are positively affected by the same emotions in advertising makes it easier to come up with creative concepts which can be launched globally or regionally. And then with the capabilities of programmatic buying and dynamic creative optimisation, we can tweak a brand’s creative “on the fly” should it need to be adjusted for any particular nuances, like local consumer dynamics.
The food industry, and particularly eating out, is a sector where local differences are extremely important, however. McDonalds, which is one of our clients, will provide a standardised menu of sorts, but also makes sure that 20 per cent is catered to local tastes. But consumers in the EMEA region are travelling internationally at a rate never seen before, which automatically creates more homogeneity and means there is more scope for brand consistency in the future.
OMD grew throughout the financial crisis, at a time when clients were suffering. How did you achieve that?
We had a clear strategy which was “client first”. It sounds really simple, but we encouraged our local chiefs to find out how their clients were reprioritising objectives, and where the client’s entire C-suite was changing its focus. Those priorities might have been cost efficiency, or even a greater use of digital because it was a more effective go-to-market strategy for some clients. During that period, we learnt that, if you focus on your customer, you can’t go wrong, because they are your business. This has paid dividends coming out of the crisis, because we were better placed in 2011-13 to expand our product service delivery in line with what we knew our clients needed.
The financial crisis also showed clients that they could truncate the services of 13-15 marketing agencies into five. We had to be one of the five agencies a client would retain so we recruited in people with the skills to offer a 360 degree service. Our service delivery is now based around two pillars – content creation and distribution. We’ve expanded our offering to include a lot of marketing services, such as electronic customer relationship management, public relations and retail activation, not just the media planning and buying services we had been providing before the crash. That doesn’t mean you need to have everything in-house. Technology is advancing at such a rate that we prefer to procure it to fulfil a specific need, and have the agility to replace it when it’s no longer best-in-class.
How do you think the European Commission’s plans for a digital single market will change marketing in Europe?
The 16 initiatives laid out by the European Commission are very encouraging, particularly for marketers. It has said that a digital single market would add about €415bn to Europe’s economy every year, supporting thousands of jobs. Netflix, Uber and Amazon, for example, are coming up against strict local regulation in some of the markets they are trying to expand into. So anything which brings down borders across Europe to create a more fertile marketplace for e-commerce and content consumption will be beneficial for our industry and consumers.
Sometimes I sit in envy when I look at countries like the US, when we have so much red tape to contend with. We need to be able to execute seamlessly across our regions, and different restrictions around the free flow of data can pose real problems for multinationals. Most importantly, such limits aren’t best for consumers, who want free roaming and to be able to download content whenever and wherever they want.