Does WPP’s New Strategy Signify The Recoupling Of Creative And Media?

Even before WPP’s restructuring announcement Tuesday, the holding company had already merged digital agency VML with creative agency Young & Rubicam, and digital agency Wunderman with creative agency J. Walter Thompson.

It’s still unclear what that means for GroupM’s four large media agencies. WPP CEO Mark Read didn’t comment directly about the media buying arm, though changes are already afoot with Wavemaker chief Tim Castree being elevated Wednesday to GroupM North America CEO.

A GroupM spokesperson said that beyond the merger of MEC and Maxus last year, it does not plan on any more consolidation within the group. But that doesn’t preclude a media agency combining with a creative agency.

“GroupM could have a tighter integration with the creative side of the holding company,” said Jay Pattisall, principal analyst at Forrester. “That could look like GroupM agencies merged with a creative or digital agency, or it could be in the form of exclusive partnerships.”

If that transformation happens, clients will have to adjust their expectations. Media departments spun out of creative agencies to create a new profit center and avoid brand conflicts. Integrations are expensive, and those fees will likely find their way back to the very brands currently trying to cut costs.

“If marketers are looking for integration, they’re going to have to pay for it appropriately,” Pattisall said. “And they’re going to have to be much more forgiving about conflicts.”

It’s unclear if clients want their media and creative agencies merged together – or if doing so will create growth, said David Jones, CEO of brand tech firm You & Mr Jones.

“Rarely when you put two businesses that are struggling together does it create one that’s doing well,” he said. “There’s a structural decline happening in an industry, so there aren’t too many solutions to that.”

Do the shuffle

Even if creative and media don’t consolidate, GroupM’s most tech-savvy teams will be deployed across WPP’s network.

Read said Tuesday that WPP’s roughly 6,000 technology specialists need to be removed from silos across the group to deploy common tech and data stack. As WPP’s media arm, GroupM holds much of that expertise.

“There could be an opportunity for pockets of specialization to shift up to the WPP level,” Pattisall said.

Either way, GroupM’s role in WPP’s new structure “is clearly going to be double or triple duty” as it takes leadership of not only media, but data and ecommerce, said Greg Paull principal analyst at R3.

The great recoupling?

WPP is making unprecedented moves in merging creative and digital agencies, but it’s not the only holding company trying to break down silos.

While Omnicom, Publicis and IPG haven’t done cross-discipline mergers, they have been pitching as integrated accounts at the holding company level.

In October, Mercedes parent company Daimler AG consolidated its $950 million media account across Omnicom Media Group. And Publicis won the Smucker's media and creative account by pulling together talent from across the holding company.

“This is not something where WPP has a unique set of problems,” Jones said. “It was the biggest company and the market leader, and therefore it's suffering the hardest. You may find WPP has its toughest time now, but in 12 to 18 months from now, it’s someone else.”

Besides the traditional competition, holding companies are facing down new contenders, including former WPP CEO Martin Sorrell’s S4, which is structured to avoid silos between creative and media.

“You’ve got some still relatively small players emerging but that are growing incredibly fast and starting to crack this conundrum for clients,” Jones said.

1 Comment

  1. Thomas Shell

    I think some of the best work I've done and seen on the agency side was at full service shops. It just makes the ability to bring an idea from start to fruition easier and realistic.

    Reply

Add a comment

XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>