Life is a lot more difficult for breakaway agencies – and clients – in the Sorrell era
Once upon a time breakaways were all the rage: Messrs Bartle Bogle and Hegarty broke away from TBWA (which then looked like an agency that would never happen), Frank Lowe and Geoff Howard-Spink departed the great Collett Dickenson Pearce, which rapidly became un-great, to be swallowed by Dentsu I think, and, most famously of all, Charles and Maurice Saatchi, Jeremy Sinclair, David Kershaw, Bill Muirhead and Moray MacLennan quit (or, in the case of the brothers, were dumped by) Saatchi & Saatchi and went off to form M&C Saatchi.
Saatchi & Saatchi recovered under Publicis Groupe but never regained its former global eminence. But assets, people, really did go down in the lift, sometimes never to return. And, quite often, took key pieces of business with them. Contracts existed, of course, even back in those days but they were less onerous than now. Clients could do, basically, what they wanted. ‘Gardening leave’ for top execs was a delight to come.
Not sure if BBH took much, if anything, from TBWA (its noteworthy account was Lego); Whitbread, which then had the Heineken brand and later Stella Artois in the UK, followed Lowe. In a later life Lowe, having sold the agency to Interpublic and fallen out with its management, left to form The Red Brick Road with the Tesco account. British Airways departed Saatchi & Saatchi for a long tenure at M&C.
One man who clocked all this was WPP founder Sir Martin Sorrell (below) and he has almost single-handedly re-written the rules to make it very hard indeed for departing luminaries to make their next fortune with what he clearly sees as his business. Eight years ago he became embroiled in a lengthy legal action against the founders of adam&eve (who quit RKCR/Y&R) one that ended on the steps of the courtroom with A&E making a big payment although they didn’t admit to very much. In that instance Sorrell might argue that he won – no business went with them – although, several years later it did, most notably Lloyds Bank and Virgin Atlantic.
It’s not good for an agency to lose business to a breakaway but it’s not great either for it to feel the business remains because of the threat of legal action. Lloyds was the account in question in the adam&eve action. It stayed for some years but owner Lloyds Banking Group still rewarded A&E with its huge Halifax account.
Departing Grey London superstar Nils Leonard and his colleagues now find themselves in the midst of all this barbed wire. Times and contracts have changed, even since the A&E breakaway in 2008. Leonard and co. might not actually be in business until the start of 2018, a long time to sustain your attraction and reputation.
But what do clients do in these circumstances? Has Sorrell been able to re-engineer things to the extent that, say, Grey’s biggest clients are loyal to the agency and not the high profile individuals who seemed to exemplify the place – and, maybe, worked on the business?
To an extent he clearly has. More clients than ever ask holding companies rather than agency networks to pitch, part of Sorrell’s fabled ‘horizontality.’ WPP has also, relatively recently, come up with the convenient wheeze of ‘closed’ pitches or simply moves between its various agency brands. News UK went from CHI (49 per cent owned by WPP) to Grey and, then, back again. CHI has now installed a 90-strong agency called Pulse in News’ new South Bank HQ. So the business stays in WPP – half of it anyway and probably more as Pulse also includes staff from Wunderman and, possibly, other WPP companies.
Marks & Spencer decided to review its business at RKCR/Y&R so is holding a ‘closed’ WPP pitch. This is thought to include CHI (again), Grey and VCCP, now seemingly regarded as part of the WPP fold following the purchase of Chime by Providence Equity with help from WPP.
Why any client should choose to limit themselves in this way is something of a mystery. Maybe M&S thinks WPP has enough variety at its disposal to give it the options it needs (note the presence of two minority-owned agencies CHI and VCCP). Maybe some clients just decide to go along with these holding company shenanigans for a quieter life. When following the individuals you want is likely to land them – and, possibly, you – in court then you can see why some opt for an easier time.
All of which makes life harder for breakaways and their potential clients. Maybe adland’s budding entrepreneurs should revive that other old standby the new agency ‘dream team.’ These included Gold Greenlees Trott and Simons Palmer Denton Clemmow and Johnson. The most famous, and enduring, was Wight Collins Rutherford Scott – still around as WCRS of course. Actually the four of them weren’t that famous at the time although the indefatigable Robin Wight made them appear so – which amounted, in the end, to the same thing.
The holding companies are sagging a bit at the moment; budgets are under pressure, so is pay and quite a few of the natives are considering revolting. It’s a lot harder than it used to be though.
