Sir Martin Sorrell must have felt like a rock band manager, jetting from country to country and meeting the high-profile clients Grey Global had served for many years.
We can be fairly sure that, unlike the prototype 70s-era rock ‘n’ roll manager, the WPP chief executive never threatened anyone with a cricket bat or threw any televisions out of hotel room windows as he met with clients in the wake of his company’s acquisition of Grey last month.
But we can also be fairly sure that, despite the power of the agencies he oversees, not all of the clients on the Grey Global roster have been in awe of the man or, indeed, WPP.
Sorrell’s autumn 2004 world tour was more than just a get-toknowyou jaunt – according to sources at the network, it was more a damage limitation exercise.
With the acquisition of Grey and, with it,MediaCom, Sorrell finds himself juggling a number of client conflicts – and last week he was hoping to ensure he could keep all of the balls in the air.
It’s a juggling act that many top agency executives are trying to perfect. In a world where the number of agency networks capable of handling a global brief has dwindled to a precious few, client conflict has become a fact of life. The key is in handling it.
Steve King, worldwide chief executive at ZenithOptimedia, thinks that the changing media landscape will invariably affect the way agencies handle conflict issues.
“There is inevitably less choice, at the network level, for clients when they are choosing agencies,” says King.
“As we move further and further upstream when addressing a client’s business, agencies have to have a distinct degree of separation between any overlapping clients.”
In the case of WPP, whether all of the agency’s high-level, high-spend clients will actually be happy now that they’re in one stable remains an open question.
There has already been a defection on the creative side with confectionery giant Masterfoods moving Mars out of Grey Global and into Omnicomowned agencies BBDO and TBWAWorldwide. WPP insists the move was already on the cards and was happening even before they took control of Grey Global – a process that will still take a further few weeks.
But, surely with WPP-owned J Walter Thompson holding the Nestlé confectionery account, Masterfoods would have been considering its position in any case.
The Mars media account remains withMediaCom, but if Masterfoods was to rethink the situation, it wouldn’t be the first time a media account has followed the creative business out of one network and into another.
Moves such as Mars will happen – merger or no merger.
After all, clients move for a multitude of reasons. A degree of churn is, after all, a part of the agency business.
However, if a merger accelerates that process, it can become a concern.
A more worrying scenario for WPP than the loss of Mars is the as yet unconfirmed rumours that Volkswagen will consolidate its $1.4bn global media account into one network.
VW’s agency of record in the US is Havas, one of two smaller global networks that seem ripe for a takeover, while in Europe the media is handled by MediaCom.
Whether or not this highprofile automobile manufacturer would like to sit under the same network umbrella with perennial WPP favourite Ford is still a matter of conjecture.
But whether agencies acknowledge it or not, client conflict – which is always a touchy subject in the industry – does remain an issue for many clients, despite Sorrell’s denials that the Grey acquisition caused concern for those clients involved.
Iain Jacob, chief executive at StarcomMediavest, says that client confidentiality has become a serious issue for media agencies as consolidation takes hold, offering clients fewer points in which to place their business.
“Consolidation is simply a fact of life; we now have to credibly explain to our clients the way we manage confidentiality, because it is an issue. It’s a legitimate concern for clients, and we have to respect that.
“We certainly have a set of standards on client confidentiality, and I would suspect other agencies have too.”
Allaying the fears of clients concerned about conflict is now an integral part of the job for top agency bosses such as John Wren, president and chief executive of Omnicom.
In addressing the issue of client conflict in an interview withMediaWeek earlier this year,Wren argued: “That question has been largely taken off the table.
“The advertising community is way too smart – I mean, they understand that there are different values even within the brands that make up a holding company.”
This may be true and the security measures that the media industry has introduced, such as firewalls within computer systems and coded door locks within agencies, may suggest that the problem can be contained. But is that enough for clients? Joe Uva, president and chief executive ofWren’s lead media agency OMD, thinks that client conflict in the most competitive sectors can cause certain problems for advertisers: “I think there are hyper competitive categories, and there are certainly hyper competitive clients where there are one or two or three dominant players in a given category. And I don’t think it’s reasonable to expect that one agency from each category, be it media or creative, would be able to serve all three.”
Uva does, however, think that if an agency is to hold competitive brands, that agency needs to prove to the clients involved that the information it holds is sacred, and will never be passed on to a third party.
“I do think that you need to demonstrate an ability to protect confidentiality of information, with the firewalls that exist today, and the ability to separate individuals in teams so no two people would ever be privy to the same knowledge, presents an interesting consideration for a client.
“I also believe that there can be a distinction between strategic functions and those functions which are more leveragable services, such as buying, or research on a nonproprietary basis, that I would think don’t present the same kind of conflict that a strategic function may.”
It may come back to the oft-quoted line that this is a “people business”. And as Uva suggests, it’s easy to programme a computer to deny access to confidential information. In an often fluid profession, the trick lies in being able to programme human beings to keep rates and campaign information to themselves after eight pints of Stella Artois.
Clients may suspect this, which may be one of the reasons they don’t like sitting in agencies with competitors.
Unilever is a prime example of the control a large advertiser has over its media agency. It has based its European account at Initiative since the agency was formed out of Lowe Lintas in 1989, giving the Interpublic company the moniker of “the Unilever agency” – an image chief executive Jerry Hill is actively trying to change.
Unilever has put itself into an enviable position of making sure that Initiative never touts for the business from rival consumer goods giant Procter & Gamble – along with Unilever, one of the world’s biggest advertisers – so the issue of client conflict within that arena would never come up.
With Unilever’s head of global media Alan Rutherford pressing for yet more savings on his £630m pan-European spend – a rumoured £28m – Initiative feels compelled to comply.
If Unilever decides to award the account to the other two media agencies in the running (WPP’s MindShare or Aegis’ Carat), Initiative stands to lose a huge chunk of its billings. The price of keeping clients separate can run very high.
Agencies do try to control client conflicts, but it can be like juggling firesticks.
An example of this was ZenithOptimedia’s use of its Equinox offshoot to pitch for film distributor UIP’s £26m business, which was at the time held by Mediaedge:cia.
This would have been fine if the agency had not held the £22m account for independent film distributors Entertainment Film Distributors, an account that went to MediaCom just nine months later because EFD saw the situation as a conflict.
For global clients, stomping away with an account because an agency’s sister company has taken over a competitor’s brief is not as easy to do as it used to be, however.
The truth is, the doors are closing fast as consolidation progresses. The consolidation of networks and the extension of brands across an advertiser’s portfolio is taking the choice for marketing services away from advertisers.
If, by the end of the decade – or sooner – we are down to four networks, which looks increasingly likely, advertisers may just have to learn to accept the fact, on a global basis anyway, they won’t be able to have an Omnicom or a WPP all to themselves.
This article was first published on Media Week