GroupM’s new media agency ‘Newco,’ a combo of MEC and Maxus (do you get the impression this has been organised slightly hastily?) is scrapping a whole layer of regional management with individual offices across the world reporting to New York, London and agencies in Canada, Germany and Italy. Asia Pacific, chiefly Australia, China and India, will report directly to New York.
CEO Tim Castree (from MEC, left) says this is to concentrate resources on client-centric activities and GroupM’s new suite of “customer journey” products but such a spectacular level of delayering looks like a cost-saving measure too.
Merging MEC and Maxus in the first place is clearly aimed at saving costs and GroupM owner WPP recently merged the substantial Neo@Ogilvy into Mindshare (substantial in terms of people anyway). It is, though, investing in new digital media agency Essence where senior Maxus UK staff are headed.
WPP boss Sir Martin Sorrell recently predicted “fundamental” changes to his and other holding companies’ media agency line-ups. With media agencies being squeezed by suspicious clients on the one hand and the surging tide of automation on the other we can expect a lot more of this.
WPP media executives will be waiting anxiously for more news from Sorrell when he delivers WPP’s half-year numbers on August 23.
PS We’re promised a name for ‘Newco’ at the end of August – but it won’t begin with a ‘M’. Which rules out Minor, Minus…