WPP is planning to merge its Grey and Ogilvy agencies in Sweden: which may be a solution to a local problem or a sign of things to come at the world’s biggest marcoms network.
WPP says the merger of the two agencies based in Stockholm is intended to create a bigger shop.
“The strengths in Grey and Ogilvy respectively complement each other in a way that will make the new agency a compelling one stop partner for both big and small companies, with business issues that can be solved with creative and effective communication. The vision is for the new agency to be a leader in the Swedish market with its unique broad offerings”, says Carl Erik Kjærsgaard, CEO at Grey Nordic.
Which it well might. But WPP these days networks all over the place – Grey, Ogilvy, JWT and Y&R in creative, Maxus, MEC, Mindshare and MediaCom in media – at a time when global advertisers are increasingly inviting beauty contests from the big marcoms outfits: WPP, Omnicom, Publicis Groupe and Interpublic (not that often in Interpublic’s case).
And WPP itself has been a prime mover in this process, successfully pitching bespoke versions of ‘Team WPP’ at clients including Ford, Bank of America, Miller Coors, News International and Vodafone. It doesn’t take a very clever bean counter (and WPP boss Sir Martin Sorrell, left, is a clever one) to work out that costs can be cut dramatically by shoehorning some functions at least (like finance and HR) into a group operation. And, down the road, the question of whether or not you actually need all these networks is bound to arise, particularly when big advertisers want to buy WPP, not Grey or Ogilvy.
Underpinning this trend is the desire by the marcoms giants to give global advertisers who feel, rightly or wrongly, that they need the same agency everywhere, less choice. Clients are less likely to walk if there are fewer places to walk to. If Ford, WPP’s biggest client, decided to dump the network where would it go? Omnicom has most of VW and some of GM through its stake in Commonwealth, Interpublic has GM through Commonwealth and Publicis Groupe has most of the French car industry and Toyota via Saatchi & Saatchi. The one credible indie for such an account, Wieden+Kennedy, has Chrysler.
Anyway, all we’re talking about here is a deal in Sweden. But ‘consolidation’ as they call it is all the rage in financial markets. And the marcoms industry isn’t immune from it.
This is indeed an old story (a year old), as readers tell us.
So we’d better reclassify it as Analysis not News!
For some reason Google News is exhuming old WPP stories and presenting them as new. But you can never trust Google News entirely (especially as we’re not on it). But should have spotted this one.
However – consolidation will surely increase apace in the agency world as well as among advertisers. WPP boss Sir Martin Sorrell said as much in interviews in India recently.