Harnessing creativity to deliver on ad agency’s bottom line

The business of creativity has many gurus, and Miriam Hughes has recently been taken with one in particular. She "really liked" Daniel H Pink's book on excellence, A Whole New Mind: Why Right-Brainers Will Rule the Future, because it reaffirmed for her the importance of bringing "people who think differently" into the office.

Hughes is group chief executive of Dublin-based communications group DDFH&B. She talks about brainstorming sessions and how they can sometimes “feel foolish”, especially when they kick off with more esoteric, personal questions. But ultimately she’s a believer.

“Actually, just sparking different reactions between groups can get things going. I don’t think you can underestimate the value of those workshops in the communications business.”

Advertising has always been powered by creativity, with a track record of bringing different disciplines together to push the industry forward. The DDFH&B Group, which is 73 per cent Irish-owned, has itself embarked upon a series of lateral, expertise-acquiring expansions. Most recently it established below-the-line marketing offshoot Goosebump and added public relations to the mix via the Reputations Agency.

Hughes, who became group chief executive in 2011, originally came from “the other side”, meaning she was once the client – indeed, she was a client of DDFH&B itself.

After post-university stints at AIB and healthcare group Smith & Nephew, where she was a brand manager for feminine hygiene and other toiletries, Hughes joined Nestlé as the marketing director of its confectionary products. This was in 1988, when Nestlé was still called Rowntree's and still manufactured KitKats in Inchicore. It was here that she first came into contact with the now 31-year-old agency and its founder and chairman, Jim Donnelly.

“I always liked the agency,” she says. “They were always evolving, and I could see that as the client. The creative directors changed, the business leaders changed. And I think that has continued.”

After Nestlé, Hughes was in charge of a team of 22 as head of communications, sales and marketing for Bank of Ireland, where she also worked on campaigns with about half a dozen people from the bank’s advertising agencies.

“It was around that time that I realised that was the part of the job I loved most,” she says. “And it was the first time that I actually had to go back and sell the work internally. There were a lot of internal stakeholders in financial services.”

It felt like she was flipping to “being halfway client, halfway agency”. So when Donnelly asked her to join DDFH&B as a group account director in 1999, she could see what she needed to do. She said yes.

Advertising is a tough business, now more than ever – “and I think everybody would say that to you. It’s a very tough business, and it’s much tougher than it’s been.”

Recession has changed both consumers and clients. The latter are "more challenged for budgets, more challenged in demonstrating returns". She concurs that there has been pressure on hourly rates as well, as documented in a recent "census" by advertising industry body IAPI. "We're probably as competitive as the rest in terms of rates, but every business needs to have a model that is sustainable."

Hughes doesn’t, however, anticipate a return to bubble- era revenues. At the peak in 2008/09, DDFH&B’s turnover reached €35 million and its profitability hovered at €5 million. Last year, the group recorded revenues of €24.2 million and a pre-tax profit of €3.2 million.

There is now more stability in the market, but these revenues and profits are also down slightly on 2012. Hughes attributes this to investments made in the business, including the renovation and refurbishment of its headquarters at Christchurch Square, where the company has been based for more than 20 years.

“I’d like to think we’ll get to somewhere between where we are and where we were,” she says, describing it as “a realistic ambition”. In 2008, the economy was “on fire”. Normal circumstances didn’t apply. “I don’t think anybody will get back to those heady returns.”

While some consumers are “back in spending mode”, the crash has made its mark. “Some things that they did six years ago they will never do again.”

She cites a study by communications giant WPP, which owns 27 per cent of the group, on what happens to consumers' priorities after a recession.

“Some of the things you wouldn’t, as a consumer, have compromised on before get pushed down the prioritisation list, and it all becomes about value-for-money. The key thing we say to all our clients is that you have got to stay high up that prioritisation list. But that list is tougher now. Consumers are much tougher. You have got to prove that you are worth your place on that list.”

Irish voice for Irish clients

DDFH&B’s client list includes Bord Gáis Energy, Fáilte Ireland, Kerry Foods, the National Lottery and SuperValu, a group that she describes as “Irish clients with Irish issues”, as well as international brands such as Lucozade, Littlewoods and her former employer, Nestlé.

At the IAPI’s biennial ADFX awards ceremony earlier this month, Hughes’s agency won the Grand Prix for its campaign for The Gathering 2013. It has since applied the social media lessons learned from that project to its work on Fáilte Ireland’s partially user-generated #ThisIsLiving campaign, designed to boost domestic tourism.

“What we see is that people want Irish brands to succeed,” says Hughes. As a result, Irishness will be centralised in the communications of, for example, former Grand Prix winner SuperValu, which is “very committed to the brand story”.

There can be challenges, too. Irish consumers tend to expect higher standards from companies such as its client Eircom “that have been around for a long time”, she thinks, than they do from its competitors.

Among the eight “Sharks” it collected at last weekend’s Kinsale Sharks festival, it picked up three for the “Guru” advertisements made for the National Lottery’s play online campaign. As well as tripling the volume of online plays during the campaign period, the Guru ads, Hughes says, are an example of advertising that “feels Irish - it feels like it’s of us, which I think is important”.

DDFH&B sometimes localises campaigns for international brands – “repurposed is a great word” – and there is validity to doing that. “Other times, and many times, it is really worth investing locally in a local campaign because you will get a better return,” she says.

For budget reasons, some international brands are under pressure to use “international materials” without any localisation at all. This, too, can be “viable”, and the agency often “sense checks” content on their behalf. In other cases, however, the lack of local flavour is “very much a lost opportunity” for all concerned.

Irish Life is one recent client win, and Hughes is now in pursuit of clients in the soft drinks and snacks sectors.

“Everybody’s out there looking for the next piece of the jigsaw. We have a great array of clients and really strong breadth, but, yes, I think soft drinks would be great to work in. Snacks, certainly, we have Nestlé chocolate, and we’ve worked on and off in the crisp category. Every category has challenges and the more of those you can conquer the better your business.”

The only predictable thing about the industry is its unpredictability. “If you want predictability, if you want something that is solid, you wouldn’t be in the communications business,” she says.

Fifteen years ago, when Hughes stepped into the agency world on the suggestion of Donnelly, the move was partly a striving on her part for better work-life balance.

“At that time, I wanted to do a four-day week and take a bit of a back seat, but also do something challenging that I really enjoyed,” she says. In 1999, her daughter was four and it was “a time in my life when I was just re-evaluating my priorities”.

A full-time commitment

The four-day week didn’t last. “What you begin to realise is that, while a four-day week would be lovely, if you really want to drive a business or be part of it, it’s very hard to do that on a four-day week. So it started to slip into five days.”

Though it’s “not to say that you can’t still have flexibility”, the more ambitious she became, the harder it was to turn off. “I just got absolutely sucked into the business,” she says.

Needing to be there for clients as they sank into “difficult situations” during the recession was also a factor, and she wouldn’t have taken on the running of the business if she didn’t enjoy the problem-solving aspects.

“Business is in my blood,” Hughes says, describing herself as a “very logical” or more “left-brained” person who is nevertheless fired up by the so-called “right-brain” randomness brought to the table by creative employees.

“Half the time I think they’re all mad, but that’s okay, because we’ve got a lot of logic and process, so being half-mad is actually very good in this business,” she says.

She talks about advertising as “a people business” and says DDFH&B avoided the worst of the “deep-cutting tactics” of the industry as the recession hit. “We probably carry more people for the business than any other agency in Dublin.”

It is now hiring on the increasingly important digital side of the business, which accounts for roughly 30 per cent of activity. Digital is “the starting point” for campaigns such as the recent social media promotion for Molson Canadian.

One criticism Hughes has of the industry is that, in the rush to embrace digital, advertisers forgot that their digital campaigns had to be “rooted” in their brand. Content was produced “just for the purposes of being shared”, she says. That content might have been robust and engaging – or “sharable” – but it muddled and sometimes lowered the voice of the brand. “It was less clear what was going on.”

That period has left her convinced that the larger agencies (DDFH&B employs 136 people across its businesses) are better placed to handle the demands of modern campaigns. Access to the WPP network of research, case studies and planning expertise also helps, with Hughes mentioning regular Skyping, webinars and monthly business updates and hailing the relationship as a “supportive” one.

Hughes says advertising "isn't all like Mad Men". Still, like everyone in the industry, it seems, she watches the show, which she observes "has got wilder" as it's gone on. She jokes that she got into the business at the wrong time.

“There was a time in advertising when it was like that. I remember as a very young brand manager watching people drinking through lunchtimes and smoking in boardrooms.”

Her “fascinating” experience at Smith & Nephew, “a very serious organisation”, in the mid-1980s was a touch Peggy-like, in the sense that although its products would be bought and used by women, she was working with a sales force that was all-male.

There are fewer parties now, and Hughes gets her kick from “edits that put hairs on the back of your neck” instead. She wouldn’t still be doing what she’s doing if she wasn’t having fun and there wasn’t a buzz.

As for the industry, “I think we have to be more brilliantly creative than we have before. We need to be brighter, cleverer and more brilliant.

"But then, that's always been the truth of the business." CV Miriam Hughes Name: Miriam Hughes

Age: 51

Position: Group chief executive, DDFH&B Group

Family: She is married to Shane, a publican, with one daughter, Hannah (19). They live in Rathgar, Dublin. She raised the youngest of her three sisters from the age of 14, after their parents passed away at a relatively young age.

Background: Originally from Terenure, she has a BComm and Masters in Business Studies from UCD.

Interests: Spending time with family and friends, travelling. (Portugal is a favourite destination).

Something you might expect: She says the industry has become “much more disciplined” and needs to be more ambitious.

Something that might surprise: She drives a distinctive 2008 white Saab biopower convertible, which she calls her pre-recession car.