I understand you have joined the WPP board as a non-executive director. Congratulations!
From my vantage point, it appears that WPP is undergoing something akin to the TV show “Extreme Make-over: Agency Holding Company” edition. As you know better than everyone else, running any kind of agency is extremely hard in the current environment (except when you are Wieden + Kennedy, it seems). And it appears it is even harder to run an agency holding company.
Consultancies are winning pieces of business that used to be yours. It started with niche stuff like programmatic and data. But now it spans content and creative development, production and distribution. Consultancies are sounding more and more like agency holding companies, but perhaps a version 2.0, while actual agency holding companies are perhaps at version 1.005b.
There appears to be a renewed appetite by marketers for “great” creative (whatever that is). But apparently holding company agencies can’t “do” creative the way clients want it. Dedicated creative shops apparently is where it is at (see my comment about Wieden + Kennedy,).
And if it isn’t consultancies or dedicated creative agencies, then there are myriad specialty service providers who will gladly take on in-housed, outsourced, white-labeled creative production (S4C, anyone?) or other pieces. Media companies will do it for marketers, too. And marketers do it themselves, with ever smarter in-house offerings. The Association of National Advertisers reported in July that 78% of its members have an in-house agency, up from 58% in 2013 and 42% in 2008.
Keith, you instigated part of this growth yourself while still at the helm of Unilever. According to press reports from when your departure was announced, you drove an efficiency effort that resulted in Unilever cutting its number of agencies in half while bringing some of Unilever’s production and programmatic in-house. I’m sure your fellow WPP board members will be fascinated to understand the how and the why of these moves.
The most important question you and the rest of the board will need to address is twofold. First of all, let’s agree that these trends are irreversible. I do not think there’s a future where TV is going to be dominated by TV ads on network TV again. Or where agencies like JWT or Ogilvy will go back to being the dominant brands in the business. So what does this mean for the role and function of the agency holding company?
And second, if the first observation is true, what does this mean for the agency holding company brand portfolio? Helping answer these questions is where I think you can shine — and why your appointment to the board is a bit of a masterstroke.
Helping the WPP board understand the “why” of the changes from a marketer’s insider perspective is a huge benefit. If they understand the “why,” they can respond, and evolve far more effectively.
General Motors and Ford are quite radically evolving their brand and product portfolios in answer to seismic shifts in their global markets. Traditional media companies are radically changing their brand and product portfolios for the same reason. I know this is what WPP and other agency holding companies will have to do also. I don’t envy the task at hand. But I do look forward to seeing how you will get on. Good luck!