Mark Ritson: Today’s agencies are like yachts – underused, expensive and all the same

The merger of Wunderman and JWT into Wunderman Thompson shows the key challenge of consolidating agencies: while necessary, it’s complicated by their commoditisation and lack of differentiation.

Cannes yachts agenciesOne hundred and fifty-four years is a long time by any measure. But in the 30-second carousel of images that is advertising, it is close to an eternity. That’s how long J Walter Thompson (JWT) has been running – in one form or another.

The firm can trace its history back to one of the first ever agencies, Carlton and Smith, which opened its doors in New York City in 1864. Just over a decade later its talented book keeper, James Thompson, bought out his employers and eventually renamed the company after himself, abbreviating the James and adding his middle name to make the agency sound less common and more established.

It subsequently became one of the great advertising agencies. Arguably it was the first to offer a true ‘full-service’ model to clients, to truly qualify as a global agency, to build a creative department, and when it was bought by WPP in 1987 it became the biggest early acquisition of what would become the most important advertising company in the world.

READ MORE: Mark Ritson: Don’t just look at the long term, look at the long, long term

But the facts, impressive as they are, don’t do the brand justice. It’s JWT, man! For marketers of a certain age, a job interview with the agency was the ultimate objective. When JWT came in to pitch, more people than usual turned up in the meeting room because it was J Walter Thompson and, you know, a ‘big deal’.

This week’s news that J Walter Thompson is to merge with sister agency Wunderman is also a big deal. Around 10,000 employees from both brands will be conjoined into the new agency – cleverly rebranded as Wunderman Thompson. I say cleverly with tongue poked firmly in cheek. While there is no doubt that WPP, and all the big agency groups, need to embark on a significant bout of brand consolidation, the manner of that consolidation remains somewhat unconvincing.

Agencies’ banal branding

The grand irony of agency land was always that, despite the immense focus these companies placed on client’s brands, their own approach to branding was more prosaic. If three mates wanted to leave their agency and create a new one they invariably went down the pub, moved a few place cards around and went with Mate, Friend and Amigo. Over time and after a thousand pitches, that name was routinely abbreviated into MFA. Over more time, and with acquisition by a big agency network, the name was further extended to MFA BigGroup. Not exactly branding rocket science.

And this barbarian approach to brand creation is now being applied in reverse with the same brutal logic. BigGroup owns MFA and another agency called Green? Let’s smash them together, call it MFA Green – or, if we really want to shake things up, Green MFA – and have a steak dinner to celebrate. Two agencies are now one. I’ll have the filet.

I exaggerate a little. But only a little. WPP has done some more advanced consolidation work in the last year with, for example, the creation of Superunion from the ruins of Brand Union, The Partners, Lambie Nairn, VBAT and Addison Group. But for the most part it’s been the down-the-pub approach in reverse. Iconic PR firm Burson-Marsteller was merged with sister firm Cohn & Wolfe to create Burson Cohn & Wolfe. Legendary agency Y&R was merged with digital shop VML to form the terrifyingly bad Scrabble hand now known as VMLY&R.

VMLY&R.

You see what I mean? There’s no doubting the creative or strategic capabilities of the newly named agency. But the minute the team introduce themselves there will be head scratching, polite laughter and – probably by the now for the 50th tiresome time – a witty client saying something like “I thought you guys were in the branding game”. It’s a bit of a branding mess, which hurts a newly conjoined agency twice. First, because the core competence of any advertising company is partly branding. Second, because it’s a mess.

In the case of Wunderman Thompson the confusion is less of a concern. Genericism should be the issue. No one would argue that J Walter Thompson was not a dusty brand. But smashing into the back end of Wunderman, another fine and less dusty brand, results in the opposite of synergy. WPP have taken two amazing brands and managed to produce 0.75 of a brand as a result.

The history of JWT would confirm that Thompson is a very generic name – even its titular founder thought so – and much has been lost in this new arrangement. Wunderman Thompson sounds, at least initially, like a company that sells telephone directories or a second-tier law practice from Croydon.

The need to consolidate

I am being too hard on WPP. It had to act. The method of its consolidation is less interesting than the rationale behind it. After a long century of creating new agency brands and then, a few years later, creating more, we have very suddenly arrived at a new place where killing and consolidating has become the order of the day. Why?

To some degree this is a result of poor leadership at the formerly independent agencies. While it’s true that JWT was a brand in need of revitalisation, its fortunes were significantly worsened by a two-year law suit alleging serious sexism and racism at the very top of the organisation. The leadership failings have not always been as extreme but many of these once-great brands have not been run as well or independently as they could have been.

But most of the now consolidated agencies are victims of much bigger, broader forces in the world of marketing. Clients are gradually but increasingly becoming global beasts. It’s a trend that has been taking place for two decades but the noose has tightened in the last few years around most local, independent marketing departments operating within multinational companies.

The grand irony of agency land was always that, despite the immense focus these companies placed on client’s brands, their own approach to branding was more prosaic.

The strategy and most of the creative work is now done out of New York, Zug or London these days and then sent out for execution. That process of consolidation demands more agency focus and fewer, bigger agencies. And as clients consolidate their requirements they are being targeted by a much broader range of alternative suppliers.

Even a decade ago a request for proposal was usually sent to your incumbent agency and the two or three other agencies your marketing director had heard good things about. That approach is now as archaic as a smoking room on the fifth floor. Clients today are dividing their brand building affections across consulting firms, digital platforms and publishers as well as exploring the potent opportunity of doing the whole thing in-house. While advertising investment continues to grow globally, the number of different competitors looking to benefit has grown exponentially in the last decade.

When private labels from Tesco and Sainsbury began to make significant inroads into the supermarket categories of the 90s the big FMCG firms like Procter & Gamble and Unilever did a very smart thing. They closed down their number three, four and five brands and focused their resources on the number one and two brands in a category, which could not only defend their turf against Tesco Value but actually prosper in that new competitive context. In the same way, WPP now hopes a smaller cadre of agencies with more horsepower will win the day against Accenture, Google and an in-house team of 300 down the road.

Lack of differentiation

To some degree the agencies have also been the agents of their own downfall. Whisper it quietly around Soho but most of these agencies now all offer the same thing. Everyone offers creative and planning. Everyone can now do above-the-line, promotional and digital. Everyone has an impressive show reel of campaigns and clients from yesteryear. Everyone now targets mid-size firms and the big behemoths. All these agencies bang on about the power of creativity. Each claims a focus on “effectiveness”. They all win a big bag of Lions at Cannes every year.

But, like the long line of superyachts that overlook la Croisette at the Port de Cannes, despite their different names and flags they are all fundamentally the same. And underutilised. And painfully expensive to operate.

Ask agency people over a beer what enabled one firm to win a big account versus other agencies and most will revert back to the ‘back bench’ of five or six star people in each country who could offer the most impressive vision of strategy, media and creative to the client team. The brand of the firm comes a distinct second to the talent, almost as if the agencies themselves – other than as a house for certain people – are basically identical in scope, service and positioning.

That similarity has not been helped by the trend of creating ‘dedicated’ agencies. The practice has been common for many years but it seems to be picking up steam in the current climate of complexity. When DDB won the huge McDonald’s account in 2016 it did so by pitching not only its own services but those of a combined team drawn from people and services from Facebook, Google, The New York Times, Twitter and other agencies like Alba, Burrell, The Marketing Store, and many, many more. The new hybrid agency was eventually named We Are Unlimited.

READ MORE: Barclaycard’s five rules for building an in-house creative agency

When agencies are pitching for work with other agencies in tow and openly blending and mixing their offers they are essentially offering a commoditised, broken down alternative to their own total brand offer. Nothing wrong with that, especially if it wins big accounts like McDonald’s. But dedicated firms also serve to reduce differentiation further and commoditise the once imperious agencies into a single amorphous mass.

If you go to a VW garage and the salesperson suggests you keep the Golf’s steering wheel and chassis but go with a Honda engine and a Toyota transmission you might drive away with a superior vehicle but also the cloying sensation that none of these brands count for anything any more. And that situation is exacerbated when the dedicated agencies stop being dedicated to the client they were created for and start hunting for other business in their newly formed, multiplicitous state. We Are Unlimited is now pitching for other clients.

WPP’s big branding error

And while he has already taken a lot of shit over the last 12 months we also must point the finger at Sir Martin Sorrell and the WPP structure he created all those years ago. Sorrell made an almighty brand architecture blunder in making WPP more famous than it needed to be.

WPP was – is – a house of brands. Its holding company status is meant to be just that: a holding company and nothing more. I’ve worked for other big house-of-brands groups and there is a tremendous amount of time devoted to ensuring independence across the sister brands and ensuring the corporate brand disappears from customer view.

That’s not how WPP has operated in recent years. Sorrell became far more famous in the industry than any of the agency heads he employed. WPP probably got more media mentions in the industry press than any of the agency jewels it owned. Multiply that over many years and the agency brands within the WPP house of brands gradually moved closer and closer together in perceptual terms. JWT stopped being JWT years ago and became WPP Agency number four.

Customers don’t know that Lamborghini is owned by VW. Every client knows that JWT, Ogilvy and Grey are all part of WPP. Not helpful.

Consolidation in advertising land is partly a function of a massive sea change in the industry but also poor strategic management at many of these formerly great agencies. At WPP it now hinges on the successful strategic merger of a lot of formerly precious brands into a much smaller list, and then the successful navigation of a new advertising era by these tighter, more focused firms. Pull this off and WPP will retain a dominant place in the future of marketing communications. Fuck it up and potential extinction awaits.

It also leaves WPP with two remaining powerhouse agencies rather exposed. The glorious agency Grey and the iconic firm Ogilvy now stand out like two unpruned rose bushes – one red and the other dark grey – at the end of a long line that have been dead-headed and weeded ahead of winter. And the temperature is falling.

There is much speculation that Ogilvy and Grey are also about to undergo a merger. And that possibility means another challenging bout of brand consolidation and renaming. The team at Ogilvy are, I am sure, lobbying for a bold new co-branded title: Ogilvey. Meanwhile, over at Grey they must be keeping their fingers crossed that the ancient pub game of agency brand naming and consolidation will put them first in the equation. Greyvy anyone?

Hide Comments16 Show Comments
Comments
  • Marcelo Salup 29 Nov 2018 at 4:22 pm

    Two issues:

    1. While all agencies claim “effectiveness” in some form… none of them can really stand up to, say P&G, and say, we added $10 zillion dollars to Head & Shoulder’s bottom line last year. A sign that I’m right is that most modern ad contests are won on compensation. Yet, hundreds of small agencies CAN stand to their local Plastic Surgeon and say “I brought you 12 surgeries last month alone”. That has got to hurt.

    2. Many agencies think that they have something called “brand equity” and thus want to retain their “brand-equity-replete” brand name. ☺ Big mistake. Clients don’t give a shit. It would be so much better to just do away with old names! At FCB we went through endless cycles of “we’re Foote Cone & Belding” and then “no, we’re FCB”, “No! We’re Foote Cone & Belding”… clients didn’t care. It would be great if an agency the size of JWT would all of a sudden say “our new name is ‘MindBender'” but they don’t have the balls.

    One exception: All yachts are not alike at all! You take European-designed yachts and they have really loooooong front decks. You take American-designed ones and they have relatively short front decks and very confy back decks. Big difference, you lumprenproletariat, you.

    • Sandra Pickering 30 Nov 2018 at 7:32 am

      Very neat summation.

  • Andrew Greaves 29 Nov 2018 at 4:45 pm

    “Leggy Ivory”? “Ivy Orgy Gel”? Maybe not.

  • Justin Lines 29 Nov 2018 at 9:53 pm

    ReddishGrey

  • John Bell 29 Nov 2018 at 10:11 pm

    Grovel – name, strategy, purpose and disclaimer

  • Derek Johnston 29 Nov 2018 at 11:08 pm

    Agreed, there is no personality or agenda left in the naming or branding of most ad and design agencies. Having worked for only founder named agencies my entire career, we saw the merit in finding a philosophy based name in Family (and friends) – it’s just that – a family run agency, staffed, and with a client base of friends.

  • Robert Strohfeldt 30 Nov 2018 at 12:04 am

    If you can successfully sell food called Birds Eye (yum), then the name is really not that important. It is what you do with it.

    • Pete Austin from Fresh Relevance 30 Nov 2018 at 9:45 am

      Birdesye was founded by Clarence Frank Birdseye II of Montclair, New Jersey, USA. So hence the name.

  • Mark Whitty 30 Nov 2018 at 1:37 am

    Well written article. Thank you, Mark. I think we are down to BBH, Wieden and precious few others to save the ad industry as we know it. Unlikely. Once John Hegarty and Dan Wieden have gone (along with former practitioners turned commentators like Dave Trott), are there really any great creative leaders left that make sense and clients respect? Based on my experience in the last 10 yrs, I have to agree with Marcelo Salup: clients, especially those under 50, really don’t care… JWT, Ogilvy, Y&R and Grey have all been in decline as brands since they became part of WPP. It’s that simple.

    • Ashley Pollak 3 Dec 2018 at 11:20 am

      I think you’re right Mark. We’re reaching an end of an era of the advertising heavyweights – Lester Wunderman, David Ogilvy…

      We’ve got caught in a middle ground, with the big shops becoming like huge faceless ships lost at sea. It’s left the field wide open for smaller shops to refine a clear single minded proposition, and to create meaningful agency brands, no longer tied to the surnames of their founders…

  • Sandra Pickering 30 Nov 2018 at 7:43 am

    Thanks, Mark. You make some very good points as always.
    Two questions (for you and for fellow readers):
    1. As you say, the dominant brand naming model is to brand the ‘talent’ rather than the product or the offer. By definition, this model emphasises that the value is in the people. It teaches clients that the agency believes that the value is in the people. Would WPP have been better to have a brand architecture around products/services/offers?
    2. Given the agencies v. consultancies debate, it’s interesting that, for the most part, management consultancies have adopted similar branding models (McKinsey, Bain, EY…) yet don’t seem to have a brand equity tied in the same way to named, talented individuals. Is this because they lead with methodologies, processes and knowledge bases?

  • Lesley Donnelly 30 Nov 2018 at 10:49 am

    No it is not because of an ‘ology’ that management consultants succeed, it is because they focus on the client not themselves. They identify what needs to be done and if they can’t do it all they pull in people who can. This is not making a dodgy car as Mark states but giving amazing client service. Not only do they not spend their time looking in the mirror, they use business brains to flex their business model as required rather than moan that clients used to pay more when they respected gurus. It’s not a branding issue, it’s purpose crisis – who is more important the agency or the brand they serve?

    • Sandra Pickering 30 Nov 2018 at 11:06 am

      +1

    • Tadas R. 1 Dec 2018 at 11:36 am

      Completely agree.

      Additionally, I would like to point out that both agencies that had created a strategist role in creative agencies do not exist. Perhaps strategic thinking has moved on.

  • Anne Miles 30 Nov 2018 at 10:51 pm

    Well said. Agencies don’t walk their talk. Worst of all they proport to focus on talent but are firing all their seniors. The billing models have to change in order for effectiveness and efficiencies to be valued. Agency culture is the next problem defined by the way everyone looks the same in all staff photos. Unconscious bias from a pot of me toos is not serving our clients nor society. The name on the door is the least of our worries.

  • Richard Fullerton 3 Dec 2018 at 12:26 pm

    Best bit of this post: ‘Sorrell became far more famous in the industry than any of the agency heads he employed. WPP probably got more media mentions in the industry press than any of the agency jewels it owned. Multiply that over many years and the agency brands within the WPP house of brands gradually moved closer and closer together in perceptual terms. JWT stopped being JWT years ago and became WPP Agency number four. Customers don’t know that Lamborghini is owned by VW. Every client knows that JWT, Ogilvy and Grey are all part of WPP. Not helpful.’ Very true.

    Also Zug?

  • Post a comment

Latest from Marketing Week

NOT REGISTERED? IT'S FREE, QUICK AND EASY!

Access Marketing Week’s wealth of insight, analysis and opinion that will help you do your job better.

Register and receive the best content from the only UK title 100% dedicated to serving marketers' needs.

We’ll ask you just a few questions about what you do and where you work. The more we know about our visitors, the better and more relevant content we can provide for them. And, yes, knowing our audience better helps us find commercial partners too. Don't worry, we won't share your information with other parties, unless you give us permission to do so.

Register now

THE BEST CONTENT

Our award winning editorial team (PPA Digital Brand of the Year) ask the big questions about the biggest issues on everything from strategy through to execution to help you navigate the fast moving modern marketing landscape.

THE BIGGEST ISSUES

From the opportunities and challenges of emerging technology to the need for greater effectiveness, from the challenge of measurement to building a marketing team fit for the future, we are your guide.

PERSONAL AND PROFESSIONAL DEVELOPMENT

Information, inspiration and advice from the marketing world and beyond that will help you develop as a marketer and as a leader.

Having problems?

Contact us on +44 (0)20 7292 3703 or email customerservices@marketingweek.com

If you are looking for our Jobs site, please click here