To Combine Or Not To Combine? That Is The Agency Holding Company Question

According to Wikipedia, Christopher Bullock wrote in his book “The Cobbler of Preston,” "'Tis  impossible to be sure of anything but Death and Taxes.” I would evolve that well-known saying to: “’Tis impossible to be sure of anything but death, taxes and Sir Martin Sorrell having an opinion.”

Last week, Sorrell delivered a lecture at The City College of New York, where he said that agency holding companies should contemplate getting rid of all their brands. According to press reports, he argued that there is not enough differentiation between creative agencies under one holding company umbrella, and that holding companies might lose more by having competing brands instead of having just one brand.

He continued to argue that agency holding companies should evolve from just being holding companies to services companies — like, for instance, McKinsey, which operates under one name but offers a plethora of consulting services. 



Hold on a minute.

First of all, S4 Capital, the new Sorrell vehicle, may not look anything like a traditional agency holding company. It does not offer typical agency holding company services like creative strategy and development, media strategy and execution (S4’s Mighty Hive is predominantly a programmatic media offering) and so on. But for sure there are individual brands under one holding umbrella. So that seems to be going against his lordship’s own argument.

And secondly, there is this: I love Porsches and am especially taken by the Panamera. I also like the VW Golf, as it once saved my life in an almighty big highway pile-up. And I love Audis for their groundbreaking four-wheel drive technology. These are all car brands under one roof: the Volkswagen Group. If I follow Sorrell’s logic, I should contact Hans Dieter Pötsch, VW Group’s chairman of the supervisory board, and ask him to build me a car combining the aforementioned brands into one.

I know, it is not the best analogy, but you get the point. Under the bonnet, some or all of the car tech might be the same, but from the outside they are distinct, and appeal to different people for different reasons. The same is true for brands owned within the same agency holding company.

Procter & Gamble is taking things even further. Under its new Woven approach, it is bringing in talent from across its roster of agencies, owned by various holding companies. So to keep my analogy going, P&G is on the order of combining talent from The Volkswagen Group with Fiat Chrysler talent (which runs from Ferrari to Dodge to Alfa Romeo to Jeep, and more). So now I am asking the CEOs of VW Group and Fiat Chrysler to give me the best of what they have, combined.

I very much understand that in marketing, and perhaps even more so in advertising, it is all about individuals and teams (that is, people) delivering smart, strategic and effective solutions. But to suggest that the holding companies just simply throw all of into in one structure is a little too much. Perhaps the better solution is to be able to deliver those types of solutions when needed, but to also have individual brands for when that is the best solution. 

Oh, wait, I just described how it is today… Back as you are!

1 comment about "To Combine Or Not To Combine? That Is The Agency Holding Company Question".
Check to receive email when comments are posted.
  1. Ed Papazian from Media Dynamics Inc, May 20, 2019 at 7:39 a.m.

    Good one Maarten. Many agency clients are still concerned ---and rightly so---about not getting lost in the politics and shuffle of a single very large agency. Rightly---or wrongly---they want their own private "creative" group and are reluctant to share its efforts with many other accounts---especially those which might be regarded as "competitve". While this is also true with the media function---it is less of an issue than with "creative" which is still held to be all important.

Next story loading loading..