If there’s one consistent theme to Sir Martin Sorrell’s long tenure at WPP (apart from delivering the numbers of course) it’s his belief that WPP can and should set up customised mini-agencies for big clients.
The most recent is Blue Hive for the global launch of the new Ford Focus (and many Ford models besides, WPP presumably hopes). But by far the most ambitious was Enfatico, the agency WPP set up in 2008 to handle everything Dell.
The deal was a disaster from day one, not least because WPP found it impossible to hire the stars it needed for an agency that needed to be in the big league immediately, and Dell promptly reverted to an ad hoc arrangement with various WPP agencies, headed by Y&R. Now Dell’s three-year contract with WPP has expired it’s hired three new creative agencies.
Dell has now dumped WPP entirely from its US creative business (although Y&R remains remains its ‘official’ global agency) and has chosen Montreal’s Sid Lee to handle consumer marketing, Havas’ Arnold for business to business and Minneapolis’ Barrie Rozario Murphy for public sector stuff like schools and colleges.
WPP aside, it’s a fantastic win for these agencies especially Sid Lee.
WPP may keep some international business but that looks unlikely as Dell has clearly decided that Sir Martin’s holding company cross-agency arrangements hold little attraction. As it is WPP has just lost up to $422m annual billings in the US.
Latterly WPP-owned Wunderman, which used to be a direct marketing specialist, was the lead creative agency on the account and that was never likely to succeed. Coupon ads in the press are exactly what Dell has been trying to get away from.
So why don’t these WPP mini-agencies succeed? The jury’s still out on Ford of course but another such venture, for Samsung, collapsed even more rapidly a few years ago (it wasn’t helped by the fact that Samsung had an in-house agency Cheil).
Sir Martin could do worse than have a no-strings debate with Y&R Brands global boss Peter Stringham (Y&R provided the bulk of Enfatico). Stringham is also a former global marketing director of HSBC.
With that accumulated wisdom Stringham would no doubt tell him that agency staffers are fiercely loyal to their house team and bitterly resent being lumped together with people from other agencies (WPP or not) to fill out a client service arrangement negotiated by a boss they never see and don’t much like.
This clearly makes no sense at all to Sir Martin’s decidedly left-sided brain. He thinks it’s the only way the big marcoms companies can crush the independents.
The evidence so far is that he’s wrong.