Forget the holding company; here’s the ‘sharing’ company
New business Harbour hopes to provide independents with the benefits of being part of a network with none of the misery. Can it work? Dominic Mills investigates.
One of the things that surprises me when I look at adland is how little structural or organisational innovation there is.
That’s a long-winded way of saying the basic business model has evolved at glacial pace - against a background of constant change in the wider business world. Take one example: the sharing economy.
Yet either grouped together in giant holding companies, or ploughing their own furrows as independents (many hoping to get snapped up at some point by one of the holding companies), agencies of all disciplines pretty much follow the same rules.
At the same time, there is plenty of evidence to suggest clients want something different.
Quite why resistance to change is so strong, I don’t know. Every agency chief will admit privately that the model is, if not broken, then under severe pressure. They pursue the current model not necessarily because it is the best available but because it is the least worst.
Hammersley certainly knows the business inside out, and he’s put in the hard yards in a variety of agencies and networks of varying sizes and degrees of independence over the years: Lowe/Lowe Lintas; The Red Brick Road; DDB; EDC (aka Dare in the UK); and the introverted South Korean giant with global ambitions and corporate ties to Samsung, Cheil.
Hammersley’s proposition is thus based on three observations: one, that independents and specialists, especially owner-managed, do better work for clients and are better places to work; two, that in networks, even small ones, individual units become enslaved to the larger organisation and its bureaucracy; and three, despite points one and two, clients want the reassurance of scale, diversity of offer, and maybe geographical reach too. To twist the famous saying about IBM: “No CMO ever got fired for appointing WPP”.
Thus Harbour offers, as Hammersley says, an “opportunity for independents to level the playing field”.
But in case anyone thinks Harbour is just a mini holding company in all but name, it most emphatically isn’t. It owns nothing, but provides independents with the ability to work together; pitch together; access international markets; and share resources and back-office services such as HR, tax, legal, IT and so on. The details are here.
Think of it like this: the benefits of being part of Network Inc with none of the misery.
In other words it’s a collective or, as Hammersley prefers, a ‘sharing’ company. In that sense it is a take on the current business zeitgeist, whether that’s the renting of music by consumers (Spotify), cars (Uber, Zipcar) or beds (Airbnb), some of which are essentially facilitators.
But however on-trend the idea is, it stands or falls on the members of the collective. Any crap agencies and the idea is tarnished.
To date, I’d say Hammersley has done a decent job corralling in some well-known indies and specialists. In media, it’s Goodstuff; in creative, it’s George and the Dragon and Oliver - the in-house specialist that has shaken up a few received wisdoms. Other specialists cover off digital, film production and a studio. You can read their details here.
International access and resources are available through Serviceplan, a multinational German indie with a presence, barring the Americas, around the world.
But it’s only a start. To have the full deck and a sense of scale, Hammersley really needs another half dozen or so agencies and certain specialisms covered off: content, for example (plenty of good indies there), data, UX, social, PR, and a trading desk.
At some point, it will have to get properly international.
And, just to stay really on-trend, Harbour could even add in a management consultancy. It’s not my world, but as I understand it the management consultancy landscape is like the agency one: a few giants we’ve all heard of (Accenture etc), and loads of indies. So maybe there’s potential there.
The financial model, as everyone is wondering, seems pretty simple. Agencies pay a flat fee (not tiered to size), a shared commisson fee on business won via Harbour, and a share of any cost savings.
So why might agencies join? Some will see it as all about incremental revenue and new-business opportunities. Some will see it as an effective way to cut costs on back-office guff. Some will see it as way to extend their capabilities. And some will just want to be in a gang of like-minded, but not competitive, peers. It’s difficult to under-estimate juts how lonely it can be for owner-managers of indie shops.
I had my doubts about the timing of the launch when I heard it was in Cannes week. Cannes week seems like an opportunity to bury bad news, not make good news. But I was wrong.
Harbour is an antidote to the increasing giganticism prevalent in the industry, exemplified by Cannes. Everything about Cannes is a function of size, whether it’s ego, expense account, holding company domination, tech platform T&E budgets, awards category expansion and so on.
As I understand it, since the announcement Hammersley has been inundated with approaches from agencies that want to know more.
And by the way, the anti-Cannes event hosted by Rezonence last week in Shoreditch was a triumph. Others will follow suit next year.
Cannes: the gravy train...the buffers
Hard as it may be to believe for an organisation that has hitherto just cruised along like a giant blue whale hoovering up everything in its way, but it may be that Cannes’ seemingly unstoppable expansion is over.
First new Publicis boss Arthur Sadoun announces that it will pull out of Cannes next year; then Sir Martin says he may follow suit pretty much for the reasons listed at the bottom of the previous story.
Of course nothing here is quite what it seems. Sadoun wants to use the money saved by not entering Cannes to invest in AI. He may be back in 2018; WPP is probably lobbing a hand-grenade or two Cannes way in order to lower the costs of participation by the big networks - over $10m I’m told when you factor in everything.
Nevetheless, Sadoun’s announcement - certainly one way for a new CEO to make a splash - seems to have gone down like a up of cold sick with his creatives. Indeed, if you are ECD of Publicis Outer Mongolia and your chance to bestride the global stage is snatched away just like that, you’d be pretty cheesed off.
Meanwhile, if you really want to have a laugh, here’s Cannes MD Jose Papas explaining to the Drum that all the stuff about Cannes (the place and the festival) being a rip-off is rubbish, and anyway, at just €1,595 for two days, a two-day pass is an absolute steal and a round of drinks for under €100 is the bargain of the century.
The man has clearly never done Cannes with his own wallet.
But for those who like the idea of sticking one to Cannes, here’s an excellent counter-view from Brian Jacobs. Awards like Cannes are good for morale and talent recruitment.