Sir Martin Sorrell may say that he wants WPP to behave more like “one company” but his rivals seem to be getting there ahead of him.
According to Adweek Publicis has confirmed that it is moving all its agencies – which include Publicis Worldwide, Leo Burnett, Saatchi & Saatchi, BBH and its gaggle of digital shops – into one office in the US, in half a dozen locations. This mirrors the actions of smaller French rival Havas which has centralised into Havas “villages.”
This is part of Publicis’ much-heralded ‘Power of One’ strategy (known as POO in some quarters) and follows other moves including combining its agencies under one banner in smaller global markets. Newish CEO Arthur Sadoun (below) is leading the charge.
Publicis says: “In the spirit of the Power of One, we strive to better serve our clients through deeper collaboration, cross-agency sharing and insight. As we often do, we are continually considering opportunities to consolidate our operations in major cities where it makes sense for both our clients and people.”
The fear in some parts of adland will be that this is the start of a trend to dispense with agency brands – or reduce them to names on a door – as clients seek cost savings ahead of considerations like account conflict. There’s also the unignorable truth that when you move desks and chairs from a number of offices into one there aren’t so many of them. So it’s irresistible, for a stressed holding company anyway, to reduce head count in the process.
For WPP the problem is more complex. The marketing services behemoth is built on four big creative agency acquisitions: first JWT then Ogilvy followed by Y&R and Grey, all bought for huge sums. Merging two or more of them would be an admission that the old model is no longer relevant.
Media agencies have taken over from creative agencies in recent years, as least as far as generating profit is conceded. But they’re in full-scale retreat as big clients question sources of revenue and cut fees.
Somehow or other the big holding companies need to find a way of doing more – or the same – with fewer people and brands if they’re to maintain their margins and position in the world.
It seems that the French are ahead of the game, if such a reductionist process can be so described.