The trouble with being a big service company is that, when things begin to change, lots of your clients do too and it’s often you they want to change.
Such is the rather bleak outlook currently facing WPP, hammered by client cutbacks at the top of a fairly long to-worry-about list.
Another such, in the wake of cutbacks at P&G and Unilever, is Kimberly-Clark which, until now, has used WPP agencies – chiefly Ogilvy and JWT – pretty consistently. Indeed there’s a Team K-C (or some such) at WPP.
But Kimberly-Clark, whose brands include Kleenex, Huggies and Andrex – is now reviewing its creative agencies. According to Adweek Ogilvy is still in there but JWT isn’t. Which might mean that those Andrex puppies are destined for oblivion.
There are two things here. One is hanging on to a big piece of business – K-C spends about $600m worldwide – while another is facing the reality that the business won’t be worth so much if you do jump through all those pitch hoops and retain it (or most of it). Even if you do you might not be “retained” in the sense of charging the client through the year for being on the case.
WPP boss Sir Martin Sorrell’s favoured solution to frisky clients is “horizontality,” offering them dedicated teams, as with Team K-C. This seemed to be working a few years ago as WPP teams or bespoke agencies – like its GTB (Global Team Blue) agency for Ford – sprung up all over the place. But the wind seems to have changed direction.
The Association of National Advertisers (ANA) report in the US a while back, although it was mainly about media, brought home to some clients in the starkest terms that they weren’t actually in full control of their agency dealings. There appears to have been a ripple effect across the marketing spectrum with clients calling the shots, which means (sometimes) lower fees and a reluctance to put all their advertising eggs into one agency or holding company basket.
Any CMO who isn’t re-examining these things might be accused of not doing their job.
The K-C agencies on the North American business are largely incompetent, and frankly, screwed. When their old CMO (Clive Sirkin) left so did the rather cutting edge approach to marketing. Now there’s a new CMO who will want to do things his way and that means cleaning house..and probably a big step back in the way they do business. What a shame.
JWT is a dinosaur of an agency in the way they act and think. They’re absolutely awful to work with and their ideas are terrible. Somewhat surprised that Ogilvy is still in the mix, but they somehow still win business. So they win they’ll hang on for 2 years just like they do with all their clients since they’re not original and a slow moving dinosaur as well.