OMG Newcastle’s ‘startup mentality’ aims to bring growth to the north east
The Media Leader Interview
OMG Newcastle MD Pete Coates explains how the group’s 15-month-old branch fits seamlessly into its wider UK network and why northern talent shouldn’t be overlooked.
In January 2024, Omnicom Media Group (OMG) planted a stake in Newcastle, opening an office in the city centre that it said would “enable clients to connect with OMG’s industry-leading capabilities across the UK”.
Why the expansion into the north east?
“There isn’t a lot of our direct holdco competition in Newcastle,” Pete Coates, OMG Newcastle’s managing director, tells The Media Leader. “We already have a base in Manchester and we wanted to go somewhere where we could have first-mover advantage [operating a different kind of model].
“That was the key element.”
Coates is a born-and-bred Geordie who has made his media career entirely in the north. He attended law school at Newcastle University, later eschewing the profession in favour of pursuing journalism. After the premature end of a stint at Red Bee Media live-subtitling BBC Newcastle programmes, he worked for 14 years at Dentsu agencies Carat and iProspect before being poached by OMG.
“Having our base here in Newcastle now gives us an extra dimension that we can plan in”, says Coates, adding that OMG’s “agency as a platform” model “lends itself really well to an agile growth model” for OMG’s northern outfits.
Coates, who reports to OMG UK CEO Laura Fenton, insists that the Newcastle team works with London staff “as closely as if we were in the same building”.
“We are operating as if we are one team across multiple locations,” he explains. “There isn’t a single client that we work on, whether it’s one that we won because of our base here or one that we’ve created roles to work on from here, that doesn’t have a mix of people from different locations that are on it.”
Such an operating model means success is measured not only by driving business growth in the north, but also by the degree to which OMG Newcastle strengthens OMG’s national and global proposition.
“The objective is growth,” says Coates. “But the attribution of success is more nuanced than just: ‘How many clients has Newcastle won?’
“Of course that’s part of it, but it’s also: ‘What other elements of our growth, both new and organic, have we contributed to by having our base here?'”
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One business, three locations
That is a distinct model compared with other UK agencies. According to Coates, there are typically three operating models large London businesses take to expansion up north: the silo, the service-centre model and the shop-front model.
Many northern agencies, he argues, operate in siloes, largely independent of the London business but with the latter’s name above the door. Meanwhile, he compares the service-centre model to “offshoring” — or creating a large team somewhere outside London that specialises in a relatively small handful of tasks.
The shop-front model, in comparison, operates by creating a small base outside London to use as a way to “funnel briefs and work back down to the mothership”.
On the contrary, OMG’s vision is “quite simple”, Coates explains: “We’re just one business that happens to have three locations. And whatever our clients need us to do, we’ll build it for them in a way that works for them.”
He compares this model as derivative of US businesses, where agencies regularly have employees in five time zones operating as one team, flying in and out of each other’s offices and seamlessly interconnecting.
“Something in this country — I don’t think it’s just our industry, I think it’s a UK thing, something rooted in our DNA — is to be quite parochial about location,” he posits. “[Brits] say that location must have a very specific purpose that everybody understands and it can only do that thing.
“Whereas we’ve gone, well no, we’ve got an office in London, an office in Manchester, an office in Newcastle. We’ve got some clients, capabilities, talent, markets, new-business opportunities. Let’s just use that toolkit however we need to in order to deliver whatever our clients want us to do.”
Is investment leaving the north?
At last year’s Future of Media Manchester event, regional agency leaders warned that the northern agency sector has shrunk in recent years.
Simon Crunden, then managing director of independent network The Freethinking Group, estimated that £250m in Manchester agency billings had been lost to London shops.
One UK media owner sales executive corroborated the figure, noting that there has been a “perception issue” from brands that agencies outside London lack requisite capabilities, expertise or buying power relative to their counterparts in the capital.
But Coates suggests that this need not be a longer-term trend. “I don’t think it’s any reflection on the perception or the reality of the capability or talent of the people outside of London,” he says.
He argues that geography has little to do with brands’ demand for agencies with “a bench strength of really diverse capabilities” that can “deliver everything that they need right now in a smart, quick, agile and effective way”.
“Out of London, the indie sector has generally grown through specialism,” he notes. “I think it’s challenging for a client today to choose a series of agencies with specialisms when they need that one point of contact that can help them to navigate.”
Coates thinks this presents an opportunity for a scaled network agency like OMG to lean back in to the region by offering access to specialised and local talent, as well as the broader range of capabilities within the wider group.
Destination employer
OMG recognised that there is a strong talent and client opportunity in the north east that it could leverage from Newcastle.
“There is so much good talent in Newcastle,” Coates points out. “Getting our hands on experienced talent has not been that challenging.”
He notes that OMG has become a “destination employer” in the city, especially for top talent from local independent agencies or London-based ad executives looking to move somewhere more affordable.
Since Newcastle staff service both existing OMG clients as well as new business won in Newcastle, there are large British and global brands being worked on at the office, providing an attractive opportunity for potential hires.
Coates reveals that he’s spoken to 15 people who own a house in Newcastle but who currently commute to agency groups in London, staying at hotels or with friends or family during the week.
“They want to live in the north east of England where they’re 13 miles from the coast, where there’s a different standard of living and they can afford house prices,” he says. “But they want a career in a major agency. Almost every single one of them has sent me an email going: ‘I’d love to have a chat at some point.'”
When OMG announced the Newcastle expansion in December 2023, it committed to a goal of creating 170 jobs for local residents. While the outfit has not yet reached that scale, it has grown at pace.
Currently, the team numbers 36, with about one-fifth comprising entry-level talent, including from Newcastle and Northumbria universities.
Coates likens the vibe at the office to a “startup mentality”. He wants to make every hire, regardless of seniority, “a stakeholder in the building of the operation”.
The plan is to add staff within a “seed team” model — a spine-like structure where teams are created to develop new capabilities, with new employees added at more junior levels as the office scales. Such a model, Coates explains, offers tangible career progression opportunities aimed at retaining talent.
Upon its foundation, OMG Newcastle rented a serviced office space with 10 desks, electing to eschew a long lease that might weigh on growth considerations. By October 2024, the team had moved into a 24-desk office. Five months later, it took over the entire fourth floor of the building.
“We’ve been on a journey through this building and it’s tangible to people to see that growth from a little box to a whole floor,” says Coates.
“We’re still early days within this operation. We’ve got a lot of growing to go.”