Media agency brands are dead
Opinion
Holdcos talk about diversity and culture but remain addicted to centralising operations. Why is this command-and-control mindset not challenged enough?
So now we know why Nick Lawson abruptly exited EssenceMediacom as global CEO at the end of last year.
The world’s biggest media buying agency group, led by newish CEO Brian Lesser, has just announced a major reorganisation that axed global agency leadership roles altogether.
As media inventory is increasingly sold by online platforms (many of whose leaders played non-speaking roles at Donald Trump’s obscene inauguration last week), the buy side is following suit by steadily repackaging themselves into truly global buyers.
They were once just global brand names above the door for wildly different regional offices. Now the Borg is looking for pieces to assimilate.
Survival of the fattest
One former holdco (not WPP) exec put it bluntly to me this week: “Everyone’s copying Publicis.”
He explains: “Publicis joined together their new business and marketing years ago. The team works across everything, whether it’s Publicis Media, Publicis integrated… [and] Omnicom Media Group did that this time last year. WPP are now doing that.”
Let’s be clear about what this means: holdco media agency brands are becoming meaningless.
In practice, holdco “agencies” operate as “platforms” on which advertisers can buy WPP, Publicis, Omnicom or IPG services.
It matters less which of agency an advertiser chooses to work with. After it is selected, the advertiser is given a bespoke team that bolts on a range of holdco media services. Nick Manning has written extensively on how holdcos’ proprietary media services — ”broking by any other name” — have become a major part of their deal-making.
Nick Manning: The rise and rise of ‘inventory media’ is a further blow for client/agency trust
As I wrote last month, the thousands of people who work across the six media agencies at Omnicom and IPG have every right to be nervous about what the future holds, assuming the Madison Avenue merger completes this year as expected.
It’s not necessarily great client service or media expertise that guarantees you a job at a holdco any more. Your ability to fit into a centralised bureaucratic structure matters more.
Essence: The clue’s in the name
Among the thousands of things I don’t understand about this industry is why centralisation is assumed to be the right way of doing business.
When Dentsu’s CEO* (I’ll bet you £50 that you don’t know his name — no cheating!) decided to “rationalise” 300 agency brands into six international mega-blobs, he insisted the change would be “more logical and transparent for our clients” and, ahem, “reduce costs significantly as our operations become simpler”.
There shouldn’t be anything simple about smashing together hundreds of businesses into a handful of operating structures. These holdcos are built by acquiring great (and not so great) independent agencies with distinct cultures and identities. The onus should be on the acquirer to accommodate a diverse range of services and talent within a family of broad business objectives.
Don’t agree with me? That’s exactly what we were led to believe during the most recent major agency acquisition: GroupM’s purchase of Essence.
Rob Norman, WPP’s former chief digital officer, told Business Insider in 2015: “If we decide to change the Essence culture, we will lose its people. The senior people have lots of chops in the game, so if we make it culturally difficult, they will leave.”
Well, guess what: they changed the Essence culture, merged it with MediaCom and lost its people.
Soft-core pawns
Centralisation is more than an opportunistic move: it’s a cultural default.
Large commercial corporations are typically modelled on the military: a hierarchy built to eliminate redundancy and confusion.
Last century’s big political argument was, in essence, a clash between competing visions of centrality: capitalism, where free-trade businesses are internally led by core executive teams and the “chief executive”; and communism, where goods and services are provided by a central government bureaucracy or dictator.
Whereas decentralised systems are weird. They’re scary. They instantly provoke a shuddering sense that control is being lost. Who’s in charge?!
Never mind that the natural world reminds us every day of how harmonious and efficient a decentralised system can be.
And there is an inherent weakness in all centralised systems: the people within them only succeed by becoming highly specialised.
If every individual is incentivised to become an expert or specialist, we lose the generalists who can see the bigger picture. Or, worse, we promote specialists to become “managers”, despite knowing nothing about management!
You privately hear this complaint emerge from agency groups regularly. I heard it literally last week from an experienced new-business exec at a Big Four network: “I haven’t met many integrated ‘super-planners’ — they are becoming a dying breed. For on-the-ground marketers, their absence is a critical challenge that holding groups can’t afford to ignore.”
A year ago, VCCP Media’s then strategy chief Steve Taylor called for a return of media planner-buyers. Taylor now finds himself as chief strategy officer at IPG agency Mediahub.
Will they listen?
Lessons from Japan
There are other ways to build a business that is less dependent on central control.
Kenichi Ohmae’s provocative 1982 work The Mind of the Strategist analysed why the then globally dominant Japanese consumer tech-led economy was outperforming the US and Europe.
While not quite claiming the Japanese “do it better”, Ohmae did point out some important cultural and post-World War II factors that made the country’s zaibatsu (”wealthy clique”) successful but different:
- After WWII, Japan’s zaibatsu managers repurposed military technology into consumer goods, like rice cookers and clothing
- These companies grew quickly in a competitive, lightly regulated market, adopting collaborative, less hierarchical structures
- Hard work and community became core values in Japan, reinforced by schools that prioritised group success over individual achievement
- This fostered a skilled, committed workforce with a leadership mindset, lifetime employment and a focus on the company’s long-term welfare
- Generalist executives were able to collaborate more effectively and respond to crises and big industry changes, making their business more agile
This is completely at odds with what we see in companies like agency networks, which are now centralising even more and at risk of becoming clones of one another.
It might also be a clue as to why Dentsu, Japan’s dominant media and advertising company, could never seem to integrate the French and British agencies it acquired, such as Carat and Vizeum.
And a lack of differentiation — the essence of what could be a “brand” beyond logos and office decor — is what gives advertisers’ procurement teams the ammunition to slash fees.
Who’s in this for the long haul?
The stakes are high. WPP’s fortunes depend on GroupM succeeding.
Without going full 1980s-style corporate Japan, longevity at the top may be GroupM’s great strength right now. Despite the exit of Lawson, nearly all of the new-look leadership team have been at WPP for a significant tenure already.
Lesser was founding CEO of Xaxis (now GroupM Nexus) in his first stint at the company, while Toby Jenner (global chief business officer) and Adam Gerhart (global chief client officer) each have more than two decades under their belts.
So, if there is a GroupM “way”, here’s a team of people who should know what that is. And, more importantly, they should care.
There are too many people in this industry who move around from rival company to rival company, never fully invested in the work they’re paid to do because they’re too busy looking over their shoulder.
Maybe that’s why WPP has faced such a backlash when it bluntly ordered everyone to come into the office four days a week (another command from the centre!). There is an obvious expectation for most holdco employees that their work is transactional rather than consensual.
If you treat your people like they are fungible, then don’t be surprised when your whole business becomes fungible.
*Toshihiro Yamamoto said this, although he stopped being CEO three years ago. Dentsu is now run by Hiroshi Igarashi.
Omar Oakes was founding editor of The Media Leader and continues to write a column as a freelance journalist and communications consultant for advertising and media companies. He has reported on advertising and media for 10 years and was previously media and tech editor of Campaign. His column on The Media Leader was nominated for the BSME’s B2B Column of the Year in 2024.