Sir Martin Sorrell has been performing at the US 4A’s ‘Transformation’ conference, debating, among other things, the issue of whether or not the internet has added value or destroyed it. To which the only answer is: it depends where you’re sitting.
But, in revealing the spend on social media by WPP’s companies, he rather gave the game away:
“We manage a book of about $75 billion dollars around world. Last year we invested about $1.6 billion with Google, $200 million in Facebook. Our prediction this year will be to get to somewhere about $400 million with FB, and Google will be north of $2 billion. As a point of reference, we’ll be investing about $2.5 billion in News Corp. And we spent about $6 million with Twitter last year. Don’t know what it’ll be this year.”
We know, of course, that WPP’s media agencies (Mediacom, Mindshare, MEC, Maxus, Kinetic (outdoor) and new ones like Joule in mobile) are grouped under GroupM, which started as a negotiating unit to leverage the scale of all the agencies together. Now it’s rather more than that, essentially WPP Media. With its very own ‘Big Book.’
And much the same is happening to the creative agency brands – JWT, O&M, Grey and Y&R. They do, of course, operate independently with their own clients but increasingly WPP fields a team for very large clients, which may or may not be based on one agency. Ford globally is the main example (the agency was called ‘Blue Hive’ a while ago but you don’t hear much of that now) but the same has happened in the UK recently with News Corporation and Vodafone.
Years ago WPP set up a standalone agency for Dell called Enfatico but that ended in embarrassing failure, one which may have reflected the sharp decline in Dell’s fortunes as much as a problem with the idea. How long will it be before the equivalent of GroupM surfaces above WPP’s creative agencies?
Non-WPP clients seem to be taking the same view. General Motors’ Joel Ewanick has just announced a new agency called Commonwealth (which he calls a ‘company’) to handle Chevrolet globally. This is mostly McCann with some input from Goodby Silverstein which handled Chevy in the US. Some might see this as a way of saving face for Goodby, expecting to see it disappear as McCann takes over the business (McCann may well see it this way).
But if it’s a company then it’s surely more permanent. And as a company it presumably has at least two shareholders, McCann owner Interpublic and big rival Omnicom which owns Goodby. Does GM have a share?
At the very least we’re seeing holding companies becoming operating companies. Havas CEO David Jones probably recognised this when he decided to rebrand his biggest agency Euro RSCG as Havas Advertising.