Droga5 to shut its Sydney office in what agency founder describes as a ‘bitter pill to swallow’
Droga5 is to close its underperforming Sydney office, just two months after the shock departure of executive creative director Steve Coll.
The withdrawal from Australia after seven years in business in that market will give the group more scope to focus on exploring opportunities to expand elsewhere, including China, the agency’s CEO has said.
“This was obviously a very difficult decision, both professionally and personally, and as a proud Australian, it was a bitter pill to swallow,” said David Droga, creative chairman and founder of Droga5.
“However, we see little value in continuing to operate in this market with an office that, sadly, no longer consistently represents the Droga5 brand.
At the time of Coll’s departure, Droga5 Sydney CEO and partner Sudeep Gohil admitted the agency had failed to live up to the reputation forged from its flagship New York office, but said the return of creative chairman David Nobay to the agency was “getting the band back together”.
Mumbrella understands Gohil and Nobay have been in New York in recent days meeting with senior Droga5 management.
The office will officially close its doors before the end of the year.
The agency has struggled to fire after losing its major client Woolworths in March last year.
Droga5 has shed a number of clients in the last 18 months, most notably Woolworths. The agency also saw the Sunbeam account move to The Works in May, and lost ING Bank in July.
In July, Gohil said the agency had 43 staff members with a “couple, three or four, of core retained clients”, while the rest the client relationships were based on project work. It is unclear what the closure means for staff or clients.
Heineken-Tiger and Coca-Cola Asia-Pacific are the agency’s two largest retained pieces of business, with Netflix and travel brand Helloworld rounding out the retained list.
“We continue to realize strong growth in the U.S., and are focusing on creating a world- class leadership team in Europe while simultaneously exploring potential models of offerings in China as our two key priorities outside the U.S.,” said Sarah Thompson, Droga5’s global CEO in a report on Campaign Brief.
It has been long rumoured the agency has lost the Qantas account – and was not involved in its latest brand campaign – although the airline has previously declined to confirm it.
It is unclear what will happen with that project, or the staff remaining at the agency.
Miranda Ward and Nic Christensen
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Reading between the lines..a lot of anger in that press release.
The fact the two locals couldn’t get a word in speaks volumes.
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Dear Droga 5 people,
A tough day for sure guys – and I wish you all well, this is a bloody tough industry at times.
At the risk of sounding opportunistic (if it helps good people find good jobs then I’ll cop the accusation), I am looking for excellent candidates across:
– Account Management
– Planning
– Creative
– Digital Strategy
– Project Management
– Content & Community Management
– Social Strategy
– Analyst
– Content
– Media Planning
– Design
– Developer
– Tech Lead
We have won a number of significant accounts in the past few weeks and could need 25+ new people.
If you are interested please send your CV to me at noel.magnus@reborn.co
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Wow, was not expecting that. Sad news indeed.
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A terribly sad day.
Some of the best people I’ve worked with across 18 years in the business.
My condolences.
Here’s praying the anonymous trolls hold back for a week or two… but knowing this fucked up industry, I highly doubt it.
Suds: We love you man.
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Noel, if that is your real name and not a pseudonym, and whatever your company is called, I think you have just distanced far more people from your company that you may attract. Give it a bit of time and space man (or woman)
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@Vicki
Given the response I’ve had, I think not – but thank you for your concern.
And yes, it is my real name.
NM
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Noel if you cannot see how bad that looks then you are in all sorts.
To the D5 family – congratulations for 7 years of taking the industry on and in many ways making it better.
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Hey Vicky:
http://www.linkedin.com/profil.....AME_SEARCH:
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Vicky, I actually think that Noel Magnus is offering to help people currently employed at Droga5 by offering these talented folk work. I don’t believe that he is being opportunistic in posting that at all. If more people spoke up and offered employment opportunities we would have a much better industry as a result.
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Noel Magnus… How dare you advertise job vacancies. How dare you. Lol
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Just on the comments above…
Noel…i feel you look a little foolish and indiscriminant.
It just looks slightly wrong no matter how well intentioned.
It isnt a job lot…
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Noel saves the day!
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Unbelievable.
A bunch of people are likely to lose their jobs through no fault of their own.
The honchoes will be all right. Nobby will either get snapped up or devote himself to other projects. Ditto the other big names.
The real tragedy is the effect of this on the dozens of people we’ve never heard of.
So Noel offers the possibility of work to these people. and he gets slagged off. Were I at Droga, I’d much prefer the sniff of a job to pious platitudes about how great it all was.
Oh, and for those who don’t know who he is (which is obviously most of those commenting) Noel has a long and distinguished record in the biz. Google him.
As I said, unbelievable.
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Hi Noel,
20 minutes after the death notice is published and you’re asking the bereaved whether you can buy the deceased’s car and personal effects. If you don’t think that’s in poor taste, then you need to pause for some reflection.
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Agree with above
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It’s unfortunate when any business closes for those left in its wake, but hey guys – this is advertising. Not Syria. Grab a tissue Life will go on. Brands will be served. All will be ok.
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I have the highest regard for the Droga guys and i’m sure they will all learn and keep buggering on as we all have to do.
Sadly I spend an inordinate amount of time explaining to many people in agencies, mainly under 35, that the agency business is not a collective but a very tough, competitive industry. For those of us who have found ourselves suddenly without an income to pay the mortgage, and the seemingly relentless bills that arrive whether you have a job or not, I would think that Noel’s post at least provide some solace that there are some options/hope out there. Also you need time to grieve when a friend or relative dies… when an agency closes or you lose your job from account losses etc. you just get on the phone and try and get placed as soon as you can.
Noel is by nature highly competitive, and as pointed out by Steve above exceptionally successful. Retaining clients, winning pitches, championing great ‘work that works’, and critically making agencies profitable are some of his many skills. And he has resilience in spades, which is what anyone in any type of agency must have. Certainly one of the top advertising people in Australia.
Final observation if you don’t have the strength of character to put your full name to your comment don’t bother, it makes them totally irrelevant.
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Sorry Noel, but you’re not running a humanitarian relief effort, don’t masquerade as one. Your heart’s in the right place but the execution is all wrong.
It’s tacky because you’ve used the opportunity to trump up ones own business success where another has failed. That last paragraph… If you simply said you had job opportunites, it wouldn’t read like crass opportunistic behaviour.
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@ Noel M.
Good on you. I think that’s a good thing you’ve done.
Sad day for the agency.
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Very sad that closing the doors was seen as the best option by David Droga, rather than replacing some or all the management team.
Most start ups don’t get CMOs lining up to hand them their business. But it became apparent a few years ago in that D5 Sydney management had a real problem keeping clients.
Many of us saw this coming when no attempt was made by New York to “fix” the problems in the agency.
(See the changes D5 London has been going through)
Shame.
An especially sad day for all the employees who worked their guts out trying to make David’s agency great.
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Don’t think there’s anything wrong with Noel’s comment. It gives the talent from Droga a chance to potentially work together again as well. Calm it people.
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What kind of organisation does a deal to be part of a startup incubator, and then folds a month later?
Looks like Startmate dodged a bullet there.
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There’s nothing wrong with Noel’s comment. It should be welcomed. People need jobs – they have bills to pay. Well done for publicly putting it out there Noel.
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At least Sudeep got to fly home from the shut-the-doors meeting in first class!
https://instagram.com/p/7RlNG2Na_V/
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This is a painful reminder that clients don’t hire based on agency brand or network reputation.
Clients stay based on the performance of the last brief.
It’s a people business and demands unforgiving amount of hands-on effort.
Take your eye off the ball just once and clients will take the agency off their roster.
No amount of management changes and spin can mitigate actual performance.
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My friends in New York tell me this much
Droga is on a mission to right all wrongs this year and “get rid of all the stowaways”
Close serial non performing Sydney office. Check
Total new management bench in London Check
Fired useless Vice Chairman in New York. Check
I guess if you survive this year at Droga5, you know he rates you.
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Good one NM
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Sad news for Droga and it’s people.
Good on you Noel. If I was faced with losing my job I’d like to think that the rest the industry would extend support and opportunities to my peers and I. Noel’s put his direct contact email and not his careers page which makes me think that he does genuinely want to help.
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When they took on Woolies they lost it.
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Australia has a tough and competitive advertising industry and we are currently enduring difficult market conditions.
Whatever the rights and wrongs of Droga’s particular circumstances, as an industry we need new, innovative and progressive agencies and small businesses to continue ‘giving it a go’ to help lead the industry forward
I very much hope the remaining Droga employees can find meaningful new roles
(and…a nice hi-jack by an experienced adman in the thread – well done Noel!)
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Well done Noel
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I find the opportunistic self publicity of Noel slightly distasteful. Also the fawning career polishing by his friends delusional and counter productive to his credibility. From the link to his CV above his last 4 jobs have lasted 6 months, 15 months, 7 months and 9 months.
Lets all calm down and judge him and Reborn in a couple of years time. Until then agree with Nick above – a ‘nice hi-jack’ but enough about Noel already.
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Still wondering how my comment didn’t fit Mumbrella’s policy…
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Hi Mate,
I can’t find anything in our back end that looks like an unpublished comment from you. It may have got lost in the ether somewhere. By all means have another try.
Cheers,
Tim – Mumbrella
A sad day – D5 are a great outfit and Sudeep a refreshing CEO
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hot tip noel, next time contact the business directly/discreetly and do it with some class
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I had lunch with Sudeep the day after Woollies was lost and a couple of months after we had to shut the doors at Big Day Out which I was running. Lesson I’ve learnt #1 Failure is critical for smart people to grow…and just a stupid faux inspirational Meme on FB for everyone else. Sudeep is a true renaissance man, a multifarious archetypal all rounder…I look forward to his next chapter
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What an interesting 24 hours it’s been.
Yesterday afternoon a load of people (yes, real human beings with families, mortgages, car loans, school fees, career dreams, etc. ) found out that D5 was closing its doors – and their jobs were gone.
Not fun for anyone involved. In fact totally shit for everyone.
I know a number of them – and sympathise with all of them.
At the obvious risk of walking headlong into the trollosphere, I decided to write a post letting those D5 guys know that there might be a light at the end of the tunnel.
Not to hijack the blog.
Not to self promote.
Not to be the Messiah.
Not to do anything other than let people going through a horrible moment in their careers and lives that my door is open for a chat if they felt we might be a good fit.
Real jobs. Real conversations. Real possibilities.
That’s it plain and simple. Nothing More.
To those who have taken an anonymous shot at me – you’re obviously entitled to your opinion, but I can’t help but think it shows off your cynical and poisonous characters – so either change your tune or please leave the industry. Now.
To those who have understood the reality, thank you for saying so both publically and privately.
And a special mention to ‘@How long?’.. an excellent use of statistics to paint a misrepresentative picture in support of your argument. (A career in political commentary awaits).
Noel Magnus.
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Indeed sad news, but as one of those former clients who was attracted to the hype, but ultimately disappointed; this outcome is not surprising.
Many great people, but let down by local senior management who seemed to be much more interested in their own reels/their own hype than genuinely understanding client challenges (or god forbid, client opinions on the work).
It was an easy decision to leave.
Best of luck to those personally impacted by the closure.
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I think we all know what ‘@How Long’ is polishing……
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Version I think the opposite is true of Noel’s comment, rather than suggesting he is trying to buy the deceased articles, he is trying to ensure the relatives of the deceased have secure incomes, he did so after offering his “deepest sympathies” but that alone won’t pay mortgages! Your comment is indicative of everything that is wrong with the creative industry when stroking peoples egos or upholding appearances take precedent over making sure money is being made & bottom lines are being met. Personally having been in Droga5 offices 2-3 years ago to try & help them identify where the hole was in the bucket they didn’t want to listen or take evasive action & honestly the writing has been on the wall with this operation for a long time, only 2 months ago I was saying to an FD from a network agency Droga5 Sydney are in trouble, sad but true. Kudos to Noel for taking a more practical initiative for the bereaved creatives!
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They did try to fix it – Duncan Marshall.
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Good on you Noel. If you did this in the USA or Europe you would be applauded for taking the initiative. Only in this backwater of a country (Australia) would people whinge about it. While the world takes a step forward (most) Australians always take 2 steps back.
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When the BlueArc Group went into Voluntary Administration a couple of other digital agencies and preferred recruiters put their hands up and reached out to us all. We were all most grateful.
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It seems the digital marketing space is more suited to smaller, more specialised agencies – you can’t really transpose the traditional advertising sensibility into the online community, people are pretty jaded with brash, shouting 1950’s Mad Men. The idiom of internet culture is an opportunity to create very different marketing stories and approaches – perhaps some of the people left high-and-dry by this closure can take on a more entrepreneurial spirit!
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Noel – can you let us all know how many applications you received on the back of that plug – genius idea.
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I thought Noel’s initial offer was respectful and genuine. He was offering to provide some possible employment at a time when it was needed. I’m not sure why people needed to comment on this – I assume each and everyone had a job themselves!
This is just life. businesses end sometimes and people lose out. I’d rather have some prospect of opportunity at that point in time myself, than nothing…….
You might have a different opinion, but if Noel was able to employ just one person, isn’t that a better situation than not posting?
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At the risk of stating the obvious, is Noel just doing what marketers are supposed to do: spotting a marketing opportunity and exploiting it?
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You’re basically saying you care more about David Droga – a millionaire – than the hundreds of employees who make barely livable salaries in his agency. This guy is a true business man, he is helping people who want what he is offering. It’s a win-win. I doubt anybody who just got layed off is saying “wow what a jerk!”
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