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On the fashion for holding company agencies...

08 Nov 2016  |  Bob Wootton 
On the fashion for holding company agencies...

Following the launch of Omnicom's new agency earlier this year, Bob Wootton wonders whether the advertising produced by agency holding group-created teams is ever as good as the pitch

Many expect another 'Mediapalooza' in 2017 as many big advertisers review - partly because it's about time (coming up three years) and partly following the ANA report on agency practices.

Meanwhile, Omnicom has created a new agency, Hearts and Minds, and won big from Procter and Gamble and AT&T (which, if we believe the respective offices of the US' two frightening Presidential front-runners who finally seem to have found something to agree on, may or may not include Time Warner).

PHD's talented Frances Ralston-Good will be its UK leader. Omnicom is also setting up dedicated agency for McDonald's with a rather different (read unappealing) remuneration model.

No surprise, then, that a favourite current talking point (apart from being seriously short-changed by Facebook which, amazingly, nobody seems to be doing anything about) is agency holding group-created entities winning complex, often global, pitches.

So here's a perspective on the record to date.

WPP, the biggest holding group, was the original architect, but hardly evidences creativity when naming them: Team Red for Vodafone; Blue Hive, now Global Team Blue for Ford; Green Team for Lloyds Bank; and Team HSBC for guess who?

The composition naturally reflects each client's spread, advertising and relationship needs. The perfectly sound idea is that relevant resources are assembled from the holding group's numerous subsidiaries.

It wins custom from the big boys, so it's clearly good business, but there's less consensus on its merits from an practitioner perspective.

Surely cherry-picking key talent and skills from a vast array of available resources must enable assembly of an optimal, winning team? And since all parties work for the same ultimate entity, under a single ultimate team leader accountable to client and holding company alike, it should enable better, fleeter communication and alignment?

Well, yes and no. It all depends how the holding company runs its business and WPP likes to maintain 'healthy' competition between subsidiaries. While this surely keeps each on its toes, it can also foster fissures in multi-territory cross-disciplinary teams.

Many advertising professionals also bemoan the downsides of working for only one client, particularly the experienced senior creatives and strategists who are often picked for these jobs (and whose circumstances often make it difficult for them to decline. Those I know are pretty miserable).

Most advertisers need agencies because they bring quite different skills, working methods and personality types. Agency people don't tend to make good 'corporate types' - the best are agile, bright, have short attention spans and dislike the routine and repetition that the process so beloved by their clients requires.

They're often also young and in a hurry. Many see variety as important as challenge and consider working across a range of clients' business problems more intellectually stimulating and a much faster way of assembling a broad base of experience. To them, a single-client brief is a dead end.

It's often the most talented and ambitious that feel this most strongly, so while a single-client agency might be able to offer a fair average level of skills, there may be few exceptional (and perhaps also difficult) people.

Holding groups also argue that dedicated agency teams can better understand and navigate the client's often labyrinthine organisation. However, it's said with some truth that owners come to resemble their dogs.

Over time - not much time - the team effectively becomes an adjunct of the client, adopting the very behaviours that dilute its difference and ability to create unique stand-out work. My friend and mentor the Ad Contrarian wrote about this recently.

So has the advertising produced by these holding group teams been as remarkable as I'm sure they claimed it would be at pitch?

Well, unprompted I remember some heavyweight activity concerning a family of bees for Vodafone, and then some Star Wars characters. Yoda stared out at me from taxi receipts I picked up around that time.

Ford chugs along about its rather good cars but seldom surprisingly or noticeably.

The agenda is being set by electric, hybrid and even driverless vehicles and recent stuff featuring the GT40 and the new Mustang seems a million miles away from the prosaic rest of the range. Or, dare I say, a visit to a dealer. Clarkson gave the Fiesta ST200 a cracking review, but neither are advertising.

Lloyds seems to be cutting through rather more. Some decry its reversion to the black horse, but I'd argue it should never have relinquished such a powerful, enduring equity in the first place.

A return to roots with a lick of paint might be just the ticket while people, even core savers, don't exactly trust our financial institutions.

My main recollection of HSBC, "the world's local bank", is livery on airport pier tubes whenever I travel. And a wealthy oriental obsessed with getting the registration plate '8' onto his limo.

Not a meerkat or Moneysupermarket booty in sight, then, but this is one person's unrigorous view. What of the world-renowned IPA Ad Effectiveness archive?

Well, over the past ten years, the currency of the longest-lived of these 'team agency' relationships, I find nothing for Vodafone, one paper each on Ford and HSBC and one for Lloyds from WPP agencies but pre-Green Team.

Perhaps the clients don't want to betray competitive advantage, or perhaps the remuneration model is so tight that agencies won't divert resource into awards entries, but this doesn't seem much for a doubtless vast amount of work and cost (and some lavish TVCs too).

Underpinning hygiene like keen media buying may be excellent, but you'd expect that from any credible agency suitor. I would also include online targeting, but there's disaffection growing amongst the biggest mass brands there.

As a former boss with extensive multinational client experience always wisely used to say, "you can't save yourself rich", which I interpret here as "no amount of structure, process, cost saving or refined targeting will help if haven't got a good idea in the first place".

Finally, the last thing any advertiser concerned about transparency and where their money is going should be doing is consolidating under a single agency p&l because it maximises opportunity to conceal, manipulate and cross-charge.


Bob Wootton is principal of Deconstruction

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13 Dec 2019 

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