Diaspora in Greek meant to scatter around and we’ve seen numerous, mostly unhappy examples of that over the centuries.
Adland is set for a further scattering around as the Omnicom/IPG merger inches towards completion and most of the big holding companies shed staff as quietly as possible. Always it’s the “non customer-facing” serfs who designated for the chop – must be a lot of people allegedly doing not that much, which hardly speaks well of current managements.
Adam&eveDDB is not, as far as we know, planning to merge with anyone although it is part of Omnicom. It still looks like a pretty successful agency but it’s seen something of a diaspora of its own recently. Founders James Murphy and David Golding left to form New Commercial Arts (since bought by WPP’s Ogilvy), another founder Jon Forsyth set up Neverland, former joint CEO Mat Goff formed ARK and now high profile and much sought-after CCO Richard Brim is going it alone with former CSO Martin Beverley and McCann London CEO Polly McMorrow.
In days of yore most such agencies, if successful, would end up selling to an ad holding company, as NCA has. But do the holding companies still have the appetite and, if not, who’s likely to back the newbies? Murphy and Golding weren’t short of suitors: one big group tried to buy a stake before they’d escaped their gardening leave. But the others?
DDB did it before, buying storied London creative agency Boase Massimi Pollitt to boost its flagging london operation back in 1989. BMP, famed for its TV (below), was itself a breakaway from Interpublic-owned London Pritchard Wood. Many of that generation quit the holding companies, some to make serious money as they floated on the London Stock Exchange. The WCRS founders came from Euro Advertising (later part of Euro RSCG, now Havas), CDP, Saatch & Saatchi and Ogilvy respectively. At one point they bought Carat.
As the BMP effect wore off on the then BMP DDB (there was a Needham in it for a while), DDB owner Omnicom rolled the dice again to buy Murphy and Golding’s adam&eve for a reported £120m following an earn-out. But would they do it a third time if one of the new diaspora hits the big (ish) time?
There’ll be many more start-ups as the fall-out from Omnicom/IPG takes effect and other holding companies downsize the creative parts of their empires. But the likeliest source of eventual backing for these is private equity, already a big player across the broader creative and media landscape. P/E already backs the highly successful VCCP in London alongside MSQ (the former Media Square) and Out of Home media specialist Talon.
If a really big deal was to emerge – such as a break-up of WPP – P/E would be the likeliest agent, able to take the company off public markets while it worked its sometimes savage cost-cutting way. That’s growing more likely as WPP struggles for growth.
So we may be on the verge of a sea change in the industry with the holding companies – apart from the all-conquering Publicis and, maybe, Omnicom/IPG – supplanted by the (even more) unsentimental money men. A risky outlook for today’s new agency entrepreneurs but a challenge they’ll have to embrace.
