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Industry Update a Summary of Newsworthy Client/Agency Relationship Developments and Relevant Marketing Or Agency Management Trends from the Past Month

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Industry Update a Summary of Newsworthy Client/Agency Relationship Developments and Relevant Marketing Or Agency Management Trends from the Past Month Industry Update A summary of newsworthy client/agency relationship developments and relevant marketing or agency management trends from the past month. Volume 34 Executive Summary—Monthly Recap TALENT: securing the right talent and resources Welcome to 2019. What an interesting way to end the year 2018. The word of the year was “brand pur- Welcome to VMLY&R and Wunderman Thompson, the newly pose,” according to the ANA. But it could have easily merged entities initiated by WPP. The moves were motivated been “in-house mania”, “ZBB storm”, “RFPain”, “FBI/ to offer clients end-to-end solutions, combining creative, data, DOJ troubles,” or “agency mergers.” In late Decem- media, commerce, consulting, and technology services to ber, a whirlpool of sharply declining stocks—of which compete with other well-integrated and global agency offerings. many were in advertising and media—opened our It all started in January when five branding and design firms were consolidated into a new entity called Superunion. What’s eyes to the possibility of global economic slowdown. next? Columnist Richard Whitman jokingly asked: “Is AKQAOgilvy What should we expect? With 2018 in the rearview Next?” Maybe. Consolidation is a strategy former WPP CEO mirror, it’s tempting to come up with predictions of Martin Sorrell apparently referred to as “horizontality” before our own about the future of our industry. Will Face- successor Mark Read took the reins. Simplicity and integration book quickly recover from its various scandals from remain at the top of the agency value chain. fake news to data issues? Will the ad industry rebuild • Per Winmo, the average tenure for CMOs is now trust in the supply chain after so many black eyes? 43 months or 3.6 years, less than half that of a CEO, Will holding companies continue to consolidate and which averages 7.2 years but holding steady based on simplify their offerings? Will we see continued inter- comparable studies. est to build in-house agencies operating adjacent • Per Spencer Stuart, less than half of 1% of board seats in to external ones, or will those get reduced in size? the Fortune 1000 have been held by active marketers. What is certain is that marketers want to reduce the Marketing expertise is at the bottom of the wish list for new number of partners they work with, they want trusted board directors at 21% vs. financial expertise (62%). partnerships, they want to avoid complexity and • Agency Mania Solutions launched its new data analytics increase proximity and agility in how service capability, a companion offering to its cloud-based they operate. Will they be heard? solutions that enables brand advertisers to more deeply measure agency performance, ROI, and budgeting. Bruno Gralpois • WPP merged two of its biggest agencies—digital agency Co-Founder & Principal network Wunderman with creative agency J. Walter Agency Mania Solutions Thompson (JWT)—forming a new creative/data/technology entity called Wunderman Thompson. Wunderman Thompson now employs 20,000 people in 200 locations Newsworthy reports and recent developments across 90 markets. The moves follow another recent WPP At AMS, we approach the agency management discipline merger of Young & Rubicam with digital agency VML to as four distinct but complementary practice areas—Talent, launch VMLY&R. Work, Financials, and Performance and Value—which is how we’ve organized industry developments to follow. Table of Contents Talent .......................................................................page 1 Work ........................................................................page 3 Financials ................................................................page 4 Keeping up with the fast-pace advertising production community .......................... page 4 Performance and Value ........................................page 5 Agency Mania: don’t panic, it’s a good thing ........ page 7 Agency Reviews and Roster Changes ................page 8 • The Clorox Company has operated its now 120-person in- • Accenture Interactive acquired Adaptly to improve the house creative agency the Electro Creative Workshop for agency’s programmatic services offering, partnering with 20 years. The in-house agency manages design, packaging, digital platforms, including Amazon, Facebook, Google, and digital for its 26 brands. The entity collaborates with Instagram, and Snapchat. the brand’s external creative AORs: FCB Global and McGarryBowen, as well as OMD and AKQA for media. • Plan A, a new holding company, acquired Badger & Winters, adding on to a roster of agencies that includes • The aftermath of losing a large account: GTB, WPP’s Untitled Worldwide, Twin, Van’s General Store, and dedicated Ford agency, reduced its global workforce Beekman Social. by 3,000, or less than two percent of its total global workforce, after losing the account to BBDO as lead • The year in review: 2018 M&As. Per COMvergence, 79 creative agency. agencies were acquired in 2018, representing 13,373 employees (77% in the digital segment), or $2.4B. 31 of the • Intel reduced the number of staff at its in-house creative 79 agencies were acquired by WPP and Dentsu (39% of unit, Agency Inside, by two thirds (to 30 individuals from the total). Accenture was the most acquisitive consultancy the original 90) as it shifts marketing strategy to be firm with 7 deals. Largest 2018 deals included Acxiom more B2B and ecosystem-focused and less focused on (Mediabrands) and LiquidHub (Capgemini). consumer audiences. Agency Inside, the high-profile entity named Ad Age’s In-house Agency of the Year in 2017, is Noteworthy quotes: expected to collaborate with TBWA, the B2B lead agency. » “We have to be as dynamic and fluid and agile and • Diageo pushed for diversity in its agency portfolio flexible as the marketplace that represents itself (72andSunny, Anomaly, AMV BBDO, VMLY&R, Carat, etc.) today.”—Wendy Clark, CEO, DDB Worldwide asking them to share stats about women in leadership » “Following years of economic progress driven by positions, any gender pay gap or inconsistencies, how human knowledge and intellectual capital, we are women are portrayed in content, and how qualified women now entering an interconnected period of ‘partnership are represented at a senior level in creative development. capital’ where our greatest company assets are our business partnerships.”—Bruno Gralpois, co-founder • Former McCann Health Global Chief Creative Officer and principal, Agency Mania Solutions Jeremy Perrott, terminated earlier this year for alleged violation of the firm’s code of conduct, slapped McCann » “The role of marketing at a company should be viewed Worldgroup and IPG with a $25-plus million wrongful as increasingly strategic by the board. It’s time for termination lawsuit, citing defamation, tortious marketing to better market itself and show its own ROI interference with contract, common law conspiracy, and in the boardroom.”—Mike Kelly, CEO and co-founder, gross negligence. Kelly Newman Ventures » “Agencies need clarity on the advertiser’s goals and • Performance marketing agency Merkle launched an objectives if they are to identify the more appropriate automated bidding platform for Amazon Sponsored solutions.”—Matt Kasindorf, senior vice president Brand Ads. The API (Application Programming Interface) management services, 4A’s integrates with Amazon, allowing advertisers to manage, calculate, and apply bids. » “As work shifts from retainers to project work, clients can’t expect agencies to be category-exclusive in that • Dentsu Aegis Network acquired Digital Evolution Group environment.”—Marla Kaplowitz, President and CEO, (DEG), a provider of data-driven marketing and commerce. 4As Branded “DEG, Linked by Isobar,” DEG will join DAN’s » “The amount of stuff we have to produce is going up Isobar agency network and offer experience, commerce, exponentially and we have to find a way to economize. and digital transformation services in Salesforce, Adobe, One way is to leverage our in-house agency.”—Eric Sitecore, and Microsoft cloud platforms. Reynolds, CMO, Clorox • German software company SAP acquired survey software » “It’s down to us as the client to explain clearly what we maker Qualtrics for $8 billion just before its planned IPO, expect from our partners and what we’re prepared to on the footsteps of its competitor SurveyMonkey. SAP paid pay for.”—Jean-Pierre Diernaz, vice president marketing more than 20X revenue for Qualtrics. and digital, Nissan Europe • Dentsu Aegis Network acquired a majority stake of Videobeat » “Integrity and ethics are paramount and we’re Networks, a media and content agency that focuses on data- demanding that of our agencies.”—Raja Rajamannar, driven TV and online video campaigns in Germany. CMO, Mastercard » “In the words of Muhammed Ali, ‘The fight is won or lost • Publicis Groupe acquired Soft Computing, one of France’s in the gym, long before I dance under the lights.’ The leading data marketing firms, to enhance the network’s same applies for a great media pitch.”—Tom Denford, data marketing expertise, an increasingly important co-founder and CEO, ID Comms competency for Publicis Groupe clients. 2/11 See how stronger relationships contribute to better marketing. Contact us at www.agencymania.com. If others in your organization are interested in receiving this Industry Update, please let them know that they can sign up on our site at www.agencymania.com/subscribe.html. If you have any comments or would like to update or change your contact information, please contact
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