Maybe it’s August but there’s been another round of crystal ball gazing about the future of agency holding companies – chiefly WPP – and the now hardy perennial of who’s going to be WPP’s CEO – probably Mark Read (below).
Forrester has produced a big new report on agencies; some “findings” involving market speculation: the likelihood of a break-up bid for a holding company – WPP again but, surprisingly, Vivendi which now owns Havas alongside the much bigger Universal Music and broadcast interests including Canal+. Some Vivendi shareholders are said to be less than impressed by boss Vincent Bollore’s antics and Vivendi may sell Universal Music anyway to keep them happy.
WPP, says Forrester, has about 100 creative agencies outside its main networks JWT, Grey, Ogilvy, Y&R and digital specialist AKQA (can you name any of them? Maybe the list includes the likes of bespoke Ford agency GTB) and they clearly need to be tidied up. It also has a raft of media agencies under GroupM even though it merged Maxus into MEC.
But a big break up deal? Still looks unlikely even though there’s lots of cheap money sloshing around the financial system. How much are the networks worth on their own? Y&R cost WPP $4bn 20 years ago. What would it be worth now? Rather less presumably.
It also suggests some ways in which big clients and agencies might work better together, instead of the state of undeclared war that seems to be the norm now.
This, it says, requires a model which “puts clients at the centre and accelerates the powerful combination of creative entrepreneurialism and brand execution.” Actually it puts creativity at the centre and for this to happen there would need to be radical rethink of how agencies – and other suppliers – are paid. Stacking up the hours won’t wash – you have can a better idea in one than a hundred – but nobody’s found a way of doing this since full service media commission disappeared. This worked because a good, effective campaign would run more often and therefore earn more money.
Mark Read’s interim reign at WPP has, so far, been a case of softly, softly. Leaving the agency leaders to, mostly, get on with it away from the pressures of Sorrell-type micro-management.
So far the evidence, in a number of reviews, is that some clients – Shell, Mondelez media – are prepared the give the old system in new hands a whirl.
Retaining Ford would be a massive vote of confidence in the ancien regime. But Ford as a brand is on the back foot and agency GTB’s work has hardly been inspirational. WPP’s best bet may be that the other global networks all have car business.