Tuesday June 26th 2018

Sorrell’s vision of the future of the big six holding companies doesn’t seem that appealing from where we’re sitting (on a stool in the Drum bar in Cannes)

 

St Luke’s were fortunate enough to be present at the Drum Bar in Cannes last Thursday where Sir Martin Sorrell was interviewed by Stephen Lepitak, the Editor of the Drum. It was an incredible coup for the Drum gang to get the most talked about man in advertising to do his first appearance since certain allegations came to light in Cannes with them.

 

The content of his interview has already been picked over and analyzed in depth by far greater journalistic brains than me.

 

The fact that a 73 year old, who still has 2% of WPP stuffed under the bed for his pension, and still wants to start all over again, is pretty impressive.

 

The fact that he graciously conceded that he was replaceable at WPP, albeit by two people rather than one (Mark Reid and Andrew Scott).

 

The fact that his new venture S4 Capital, will be taking his new fast, data-led creative proposition straight to the C-suite, bypassing the CMO and their ‘paltry’ budgets.

 

But the point that really stood out was his assessment of the future of the big six holding companies.

 

He said they were all broadly moving in the same direction – one big totally integrated company; one where big, multi-disciplinary client teams are built around client needs, where agency brands become less and less important.

 

A dystopic world where bright, hungry and restless talent is subsumed into huge units with names that sound like they were dreamt up on the Apprentice like Red Fuse, Orange Waistcoat, Purple Wasp.

 

It’s an attractive proposition for clients, granted. At least in the short term. In Sorrell’s words, ‘clients just want the best people for the business, and are less interested in agency brands.’ And these units can be resourced much more efficiently, with utilization being maximized, and the accumulation of knowledge of the brands making things faster and slicker. And of course you don’t have dozens of agency brands working for you, all with their own agendas, p&l’s and management overheads, all competing for their slice of the pie.

 

But there are two big problems with this model. Firstly, when the talent in these teams effectively become an extension of the marketing department, they end up losing the very thing that clients came to them for in the first place: lateral thinkers with broad experience and ideas beyond the clients’ worlds that can have a transformative impact on their businesses.

 

It does beg the question – if a client is looking for their agency to be an extension to their marketing department, why not just have a bigger marketing department in the first place? Unless it’s just a convenient way to manage headcount.

 

Second, what about agency culture? At St Luke’s, we believe in the old Peter Drucker mantra – ‘culture eats strategy for breakfast’.

 

Why? Because we believe a clearly defined and inclusive culture leads to clarity and originality of thought; it can foster an environment where better ideas happen faster and are more complete; where we can continue to evolve our model quickly to fit our client needs; and where we can make deep and lasting impact on brands.

 

That’s why we work incredibly hard to nurture our culture, and support our people on their own journeys of personal transformation. That’s why we were recognized by Campaign as the second best agency to work, for an agency of our size.

 

But when agency brands in holding companies are weaker or even non-existent, how and where does culture coalesce? Am I first and foremost an employee of the holding company, and what do they believe? Or do I first and foremost work for Purple Wasp, and who are they anyway?

 

Perhaps this trajectory for the holding companies is inevitable and what clients want. But we believe culture is everything. And strongly defined agency brands are the best way to help shape it.

 

But then we would say that, wouldn’t we?

 

by Ed Palmer, Managing Director