Do WPP’s becalmed London creative agencies need a business blood transfusion?

Marcoms giant WPP has four big (or supposedly big) creative agencies in London – JWT, RKCR/Y&R, Grey and Ogilvy – and 49 per cent of the relatively new CHI.

But, rather strangely, according to Campaign/Nielsen figures for 2012, JWT, Grey and Ogilvy are languishing in the lower reaches of the top 20 agencies by billings at 15, 17 and 18; separated by another fallen star Publicis Group’s Saatchi & Saatchi and behind CHI.

Together their billings (still a roughly accurate guide to financial performance) don’t amount to top dog AMV/BBDO’s £458m. RKCR/Y&R is the WPP exception, in fourth place with billings of £249m.

But there’s a tale in the latter’s clumsy nomenclature: Y&R in London was revived a decade or so ago by buying indie agency Rainey Kelly Campbell Roalfe and, even though the quartet have long since departed, appears to have hung on to the injection of business (and the residue of capable management) the deal brought in.

Much the same has happened recently at Omnicom’s Adam&Eve/DDB (A&E was itself a breakaway from Y&R) and Interpublic’s DLKW/Lowe. Both these are much more recent deals so the jury is still out on whether these turn out to be quick and temporary fixes. John Lewis is vital to the former, Halifax was vital to the latter but it’s now at….A&E/DDB. So these things don’t always work.

But, to return to WPP, does it actually matter if three of its headline agencies are languishing in the bottom reaches of the Top 20 and, on current trends (Grey possibly excluded) may well drop out entirely next year?

The billings table is notoriously volatile these days (with the exception of AMV/BBDO) as heavyweight TV campaigns are few and far between compared to, say, 20 years ago. So if one of your big clients decides to take a rest, you can drop down the table like a stone. But a low ranking for a supposedly big agency does mean that it isn’t winning much business, particularly local business.

It can be argued that the job of JWT and Ogilvy is to service WPP’s big global accounts so that stuff doesn’t matter but local success does mean that you can attract talent, win awards and keep everybody (fairly) happy without needing to bung them even more money. So it does matter.

So what should WPP’s still-hyperactive boss Sir Martin Sorrell do about JWT and Ogilvy? In the case of the latter he could shift it from its Canary Wharf HQ in London’s new financial district where it was dragged kicking and screaming (although, typically, not loud or hard enough). Communications to Canary Wharf have improved but it’s still, in adland terms, out on a limb.

He could also do something about the constant high turnover of top management. Ogilvy has just appointed Cheryl Giovannoni from WPP-owned Landor (left) as its new UK CEO, the umpteenth occupant of the post in recent years. Giovannoni has worked at Ogilvy before in London and South Africa but appointing someone from a design agency does rather reinforce the impression that Ogilvy isn’t really an ad agency at all.

As for JWT, the one-time aristocrat of London agencies doesn’t seem to be able to do anything right despite appearing to have, from time to time anyway, some reasonably talented people. It just isn’t a player at the moment; an extraordinary state of affairs for an agency that everyone (even Charles Saatchi who was obsessed with becoming bigger than JWT) used to look up to (literally, in terms of the billings table).

So should SMS get his cheque book out and inject some talent and business into these two agencies (Grey in London was never as big as JWT or Ogilvy)?

The usually cautious Omnicom shelled out an eye-watering £60m for A&E to rescue a DDB that seemed to be unable to convert its creative ability into business. Sorrell might jib at such an amount, even if he could find someone to spend it on.

Maybe he should consider reorganising his UK empire instead. Appointing a heavyweight to oversee all his UK ad agencies might just work (although the agencies would all moan like hell, of course). WPP ad agencies often feel rather unloved, by the boss anyway. He seems far more interested in other stuff these days.

Maybe the agencies need a champion to fight their corner.

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About Stephen Foster

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Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.

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