‘Second wave’ agency structure is the future…

David Wethey’s observations (MW last week) regarding the drivers of the industry are unquestionably sound, but only if looking to the past.

Looking ahead, I’d challenge his view.  The industry is going through slow, painful change, and for me the trends are extremely clear: growth for the global groups will come from emerging geographies, not mature markets; while scale benefits a few global advertisers, the contrary is true for the wise and fleet-of-foot local brand manager, and single-discipline businesses are under growing pressure to adapt to changing client needs.

The polarisation between the global groups and independent single-discipline businesses is creating a gap, a vacuum that will be filled by a new model. It’s a natural market-structure change that will lead to more choice for the customer.

The “second wave” of groups is in its infancy and only just beginning to gather momentum, but the opportunity for clients is, in my opinion, very attractive. Far from an uncomfortable halfway house, it’s a third choice with these upsides: a much wider talent bank than a single discipline business; senior, experienced practitioners running the broader business; committed management via shareholding structures; the retention of an entrepreneurial culture; owners, not managers, and a very attractive environment for staff.

I’m not suggesting the second wave is better, just different from the old two-party model, offering an alternative. And if the second wave ends up with a 20 per cent share of the UK market, it will be a potent one.

Engine’s recent trade ad asked if its new structure was the future. I think we are reading the same tea leaves.  David Wethey’s observations are always wise and well-informed, but maybe he hasn’t stumbled across the same tea leaves as Tim Bell, Robin Wight, Don Elgie et al.

Paul Simons

Chief executive

Cagney

London W9

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