Holding-company consolidations can only be called complete when PR is in the negotiationWhen news emerges of a holding-company-wide client relationship going up for review, PRWeek's first question is always whether PR is included.
In the case of the reports that Bank of America is reconsidering its relationship with Interpublic Group, the answer is yes.
Indeed, IPG has a number of its PR firms working on the BofA business, including MWW, Weber Shandwick, and GolinHarris. But as many people realize first-hand, PR firms aren't always included in these account consolidations, even when every other discipline is.
The logic behind this is as follows: Media buying should be consolidated as the more markets a single entity is negotiating in, the more power it has to drive prices down. Advertising often goes hand in hand with media buying and the agencies are often aligned thusly. Direct marketing, previously a holdout to consolidation, became more involved in these consolidations due in part to the owned direct marketing networks growing through M&A, and in part to the economies of scale that integrating data-mining software and research brings. But PR is a holdout, because it is a local business, and thus something that should be decided at a local level.
Things are changing, though. When PRWeek profiled WPP (reportedly a contender for the BofA account) in the January 3, 2005, issue's Who to Watch feature, we singled out the company's knack of packaging its brands in a creative way and positioning itself as an agent of talent. CEO Martin Sorrell is clear on the point that PR firms are involved in these consolidations, and that indeed PR was a factor in last year's company-wide HSBC and Samsung wins.
But according to media reports, it appears that the performance of those agencies working on the BofA account were not the key drivers behind the review. Rather it was a combination of IPG's ongoing financial troubles (and it's less than surprising that a financial institution is having qualms about one of its vendors having such high-profile financial issues), and the expected departure of IPG's EVP and CMO Bruce Nelson, the pointman on the account. While Nelson is not the only glue that held the BofA account together, IPG's predicament does highlight the vulnerability of having someone quite so key to an account at the holding-company level.
Nelson's apparent involvement does throw into relief the question of just what is the extra magic a client gets from buying all their marketing services from a single company. If the whole is indeed greater than the sum of its parts, then how can such a relationship be thrown into turmoil with the impending departure of one person?
The rule now on the success of the holding-company-level client relationship would seem premature, as PR has so often been excluded. But as PR becomes more integral to the process, it has a chance to bring its expertise in media-neutral strategic thinking and its understanding that in marketing - a game that has many intangibles - relationships can equal millions of dollars in revenue. When a client buys an entire holding-company relationship, it buys into chemistry, strategy, and price. Bringing PR in can have a powerful effect on the first two, and it can add extra value for the third.