Even though business in general, is notorious for rewarding senior management with obscene pay packets, which inevitably culminate in humungous “get the fuck out of here,” golden parachutes when their never ending failures and screw ups have finally become too much even for their hand-picked cronies on the board of directors to ignore… The fetid luminaries running the ad biz at both the Big Dumb Agency (BDA) and Big Dumb Holding Company (BDHC) level are equally as venal in their never ceasing efforts to bury their snouts in their respective corporate troughs.
AdScammers will be familiar with my many tirades concerning BDA’s and their noxious masters, the BDHC’s. The management of both becoming increasingly desperate in their ill-fated attempts to remain relevant to their BDC’s, (if you’re losing track; that’s the AdScam acronym for Big Dumb Clients) whilst continuing to liposuction out a ton of loot before the roof caves in.
For now, I shall pass on the BDA’s, and concentrate on the four Big Dumb Holding Companies, (BDHC’s) Interpublic, Publicis, Omnicom and WPP. (Update, since writing this, we are now down to three BDHC’s with the impending merger of Omnicom and Publicis to form “PubicCom,” which in the interest of “efficiencies” will no doubt result in thousands of non-management layoffs).
Compared to ad agencies, which have been around since the Devil opened a full service office beneath an apple tree in the Garden of Eden, the holding companies are a relatively new phenomenon that has managed to destroy some of the world’s greatest advertising agencies through a combination of greed, arrogance, ignorance and just general fucktardliness. As I said in a dynamite speech (he said modestly) at a 4A’s conference in 2010, if the respective managements of the BDA’s had the nerve to do it, they would engage in a leveraged buyout and get themselves out from under the control of their masters. Obviously, this is a scenario that will never happen, ‘cos they don’t want to rock their respective gravy filled boats… And they don’t have the balls to do it!
As you can imagine, my suggestion was greeted with shock and horror by the assembled audience of BDA lackeys. Although, later on in the bar (where else?) several of them confessed that they agreed with me, while looking over their shoulders to make sure they weren’t being caught on any hidden BDHC surveillance cameras. In fact, I have it on inviolable authority that the management of a major BDA, set the wheels in motion to actually undertake this venture, only to knock the idea on the head when it dawned on them this would entail putting the twelve bedroom house in Greenwich, the ski lodge in Aspen and the summer home in the Hamptons in hock to fund the operation.
So, why do I maintain that the holding companies are destroying the agency biz? Simply because they no longer allow their constituent BDA’s to be managed and run in the best interests of their clients. They are now run solely for the benefit of the holding company, all of which are publicly traded and all of which are concerned only with making their quarterly numbers… This is why all the BDHC’s are actually run, not by advertising people, but by bean counters, whose expertise is limited to the production of spreadsheets, rather than ads.
Every agency laboring under the yoke of their holding company masters must kick back a third of their revenues to the holding companies. If the revenues are down, it must then be made up in the time honored fashion beloved by these Captains of Industry: In other words, by reducing overhead. And as the biggest chunk of an ad agency’s overhead is the cost of the people working there… Heads must roll, obviously not senior management, just the poor schmucks in the trenches.
Then when things improve, cheaper, less experienced workers can be hired. That these will not do as good a job as the people who were originally let go, is immaterial to the BDHC obersturmbahnfuehrer drooling over his spreadsheet… Until the inevitable day when a long standing BDC fires its BDA because the work has turned to shit!
But that’s another story.
Let us now consider the checkered and often sordid history of the big four BDHC’s.
The granddaddy of them all is Interpublic: Started in 1961 with the melding of McCann Erickson and McCann Marschalk, it went public in 1971, and has been going downhill ever since, thanks mainly to the delusions of grandeur suffered by its Chairman and CEO, Phil Geier (left), during his twenty year tenure from 1980 to 2000. Through the last ten years of Il Papa’s reign, Interpublic went on a buying spree, purchasing hundreds of lame ass companies, many of them only operating on the periphery of the ad biz… Something which, to this day, still seems to be the modus operandi of all Big Dumb Holding Companies… “Buy or Die! Expand holistically! Offer unlimited Datametric Ideation Capabilities… Or, whatever other inane gobbledygook bullshit is flavor of the month.
Unfortunately, the management of these behemoths seem to be incapable of realizing that well over seventy five percent of the companies they buy are absolute crap and will inevitably end up in the rapidly filling dumpster of: “Well, it seemed like a good idea at the time!” So, not surprisingly, most of them cease to exist within a couple of years of their purchase, and the original management, while working out their non-compete clauses and drinking numerous latte, mocha, decaf, frapacinos, as they network on their JesusPhones, fuck off back to their Mill Valley, Woodside, SoHo, NoHo pads, do it all over again, then get bought for millions by another BDHC! Ha, didn’t some foreign intellectual once say, “We are doomed never to learn from the lessons of history.” Or something equally erudite.
Interpublic’s major claim to fame is that for a number of years from the late nineties on, its finances were in a shitasmic shamble, resulting in numerous shareholder lawsuits, an SEC investigation and a dramatic collapse of their share price. All this, while hosting huge vintage champagne fueled parties on the Aristotle Onassis yacht, “The Christina O”, at the Cannes International Advertising Awards grab fest, each spring.
The current CEO of this disaster is Michael Roth, who had never worked in the ad biz before joining the board of Interpublic. Prior to this, he was in the insurance industry. In common with the CEO’s of the other BDHC’s, in addition to his multi-million dollar annual salary and dumpster loads of stock options, he regularly awards himself exceedingly large “performance” bonuses… Even when, more often than not, there is no performance to justify such a reward. Not surprisingly, reliable sources tell me that in the event another holding company should swallow up Interpublic, Roth will walk with a $35 million golden parachute.
Meantime, over in France, Publicis Group sits on top of a multinational empire including Burnett, Fallon, BBH and Saatchi & Saatchi… That would be the original Saatchis, the one the “Cockney Gits” Charlie (lately achieving notoriety for attempting to strangle his “English Muffin” wife over lunch) and Maurice, almost demolished thanks to their insatiable appetite for acquisitions, culminating in their failed attempt to buy one of Britain’s largest banks. That’s right, a honking great bank. Obviously, something every advertising agency needs. Perhaps the brothers saw this as a great way to fund their exuberant life style, which involved the purchase of way too many restored Norman castles, Rollers, and multi-million dollar dead sheep floating in tanks of formaldehyde, courtesy of art charlatan Damien Hurst.
Le Patron of Publicis is Maurice Levy (left), who originally joined the company as its IT Director in the early seventies. The legend is that he was walking past the Champs Elysees office at two in the morning (mmm, what the fuck was he doing on the Champs Elysees at that time?) when he spied flames coming out of the windows. Rushing in, he saved all the company data which he had thoughtfully backed up the day before (wonder if they searched him for cans of gasoline and matches?). Anyway, the old geezer, Marcel Bleustein-Blanchet, who had founded the company after being retired from the army of Joan of Arc, was so overwhelmed by this miracle that he anointed Maurice as his successor. As they say, you can’t make this shit up. But, if you’re in advertising, you can certainly embroider it a bit!
In common with his fellow BDHC heavies, Maurice makes shitloads of money, owns multiple mansions, yachts and islands, regularly awards himself the obligatory “performance” bonuses, and is “maitre” of all he surveys.
So, that’s two BDHC’s down and two to go. Next week I shall tell you all about the smartest, Omnicom… And without a doubt, the biggest and the baddest… The Poisoned Dwarf’s evil empire: WPP.
So, do not adjust your dial. Stay tuned to super-heterodyne station, AdScam!