J Walter Thompson’s (JWT) plans to buy specialist media agency Unity have collapsed (MW last week), but this is by no means the end of the story.
Talks between JWT and Unity, the specialist in “media-neutral planning” whose clients include Carphone Warehouse and Green & Black’s Chocolate, dissolved after the two sides failed to agree a price and a way of integrating the media shop into the ad agency.
But JWT chief executive Simon Bolton says he is already working on alternative arrangements as he attempts to shift the agency’s focus from being a creator of advertising to offering clients more broadranging communications planning.
He says JWT looked “seriously” at a partnership deal with Unity three months ago, but the two sides could not agree a price. He adds: “These are good, talented guys, but their business hasn’t grown fast enough. We couldn’t agree on the financials. We have begun new arrangements with a group of people. If that goes well, we will announce something.”
A Unity insider says the talks collapsed because the sides were unable to agree on the media specialist’s position within the group – it wanted more independence than JWT was prepared to give it. If Unity were to give truly independent media advice, it would need to be distanced from the profit line of the agency. But the insider adds that news of the talks has flushed out interest in Unity from other agencies and he believes some kind of deal will be struck.
Both sides deny claims by one source that the takeover plans were stamped on by Sir Martin Sorrell, boss of JWT parent company WPP Group, who is thought to have argued that it made more sense for JWT to hire individual media planners rather than fork out for a whole media planning agency. And it is thought Sorrell believed Unity would have been a more appropriate acquisition for WPP than as a JWT bolt-on.
Within the holding company, Unity would have been able to advise on the services of dozens of marketing services companies, while JWT offers a more limited choice, including Black Cat, RMG Connect and Cheetham Bell/JWT in Manchester.
One problem was that the acquisition would have undermined the role of WPP media agency MindShare, which professes to provide just the sort of media-neutral planning for JWT that Unity offers. MindShare chief executive Kelly Clark says he was “surprised” to hear about the talks with Unity, and insists MindShare is well positioned to offer neutral solutions for JWT and its clients.
“There is nothing to suggest that we offer anything other than neutrality in the way we plan solutions for Nike, 3, Boots or Ford. And they are getting accountable delivery of those solutions. We are in the market every day improving our understanding of consumer behaviour,” he says.
He casts doubt on the success of specialist media planning agencies such as Naked Communications, Michaelides & Bednash and Unity. “They don’t have many long-term client relationships, a lot are short term,” he says, adding that much of their work is probably on two-month contracts, while MindShare has “enduring” relationships.
In truth, the issue of medianeutral planning is one that is vexing most of the top advertising and media buying agencies. But the problem for established agencies, the specialists claim, is that their profits are tied to creating – or buying – specific ad campaigns through television, press and posters.
Fragmentation of media and audiences means it is harder than ever to target messages to particular groups and shape consumer behaviour. And the agencies are likely to offer solutions using traditional media, when the brand may require a direct mail campaign, an element of staff retraining or an improvement in customer relationship marketing technology. A pure consultancy would suggest any of these paths, while a traditional agency is still tied to its operational side and has vast production resources that need employing.
Observers say it is easy to see why JWT would want to buy a whole media planning agency – it makes the prospect of bridging the gap between creativity and media look far more serious than just hiring one or two executives.
Publicis Groupe picked off Unity founder Derek Morris last year to inject some media-neutral planning into the group. There is logic in this as Publicis offers a number of different services, so media-neutral solutions are possible within the group. Morris was subsequently promoted to joint chief executive, although a recent reshuffle has shunted him to chief operating officer.
Some observers are deeply sceptical about the journey towards media consultancy and whether ad agencies should undertake it at all. “Ad agencies should stick to what they are good at. Clients go to them because they create great advertising. They shouldn’t throw that away,” says one source.
However, this opinion appears to represent the minority. Agency bosses have already embarked on the media-neutral gold rush and it will soon be hard to find an agency that does not claim to offer this service to clients. But it is a highly political process that threatens to undermine established relationships between creative agencies and media agencies, which claim that they already offer media-neutral planning.