JWT: Why the merger is no panacea

JWT: Why the merger is no panacea

The news that J Walter Thompson and Wunderman are to merge may not have been entirely unexpected, with the former's reputation suffering in the wake of allegations of discrimination. While the rebrand and a change of leadership could attract new clients, it also throws the spotlight on wider questions about the febrile nature of the diversity debate in the industry.

When Mark Read, chief executive of WPP, announced the merger of J Walter Thompson with Wunderman, he will have breathed a sigh of relief.

The creation of Wunderman Thompson means that the august but underperforming J Walter Thompson brand, which dates back to 1864, will be consigned to the past, even if some of its recent problems cannot be instantly swept away.

Sorting out JWT, which WPP acquired in 1987, was expected to be one of Read’s priorities when he revealed his strategy update to investors and analysts on 11 December but he brought forward the news as it leaked.

Read may have been keen to get on top of the story, given that JWT was suffering unwelcome attention, following allegations of discrimination at the London agency on the grounds of sex, race, sexual orientation and nationality.

The saga began at a Creative Equals event this summer when JWT creative director Jo Wallace, on stage with executive creative director Lucas Peon, said that she wanted to "obliterate" the agency’s reputation for being full of straight, white men. A group of men who fall into these categories complained about her choice of words and were made redundant shortly after doing so. Incidentally, Wallace’s statement followed JWT saying that its gender pay gap was 44.7%.

After Campaign broke the story on 12 November, it was seized on by the national media, escalating what JWT must have hoped was a local embarrassment into a larger issue that is very current and much in the public eye.

The knowledge of who had authorised the use of such language by Wallace at the event, given that chief executive James Whitehead was also in the audience, was questioned. It also raised issues over how febrile the language around diversity has become and whether some sort of tipping point had now been reached.

At the time of writing, none of the men involved was able to talk about the accusations. JWT said it could not comment, while insisting it treats all redundancies "fairly, lawfully and without any form of discrimination". But what would clients think?

The impact on talent

One intermediary said that JWT was likely to escape major reputational damage, even before news of the Wunderman Thompson merger.

"While there will always be a few brand owners – often ex-agency people – who show an on-going interest in the agency village, it is of little relevance to them when they are not considering a review," Martin Jones, managing partner at AAR, says.

However, Jones believes the Wunderman Thompson proposition and a focus on diversity of talent could attract new clients. "They will not be comparing the new agency with the old agencies, but will be looking at the new team compared with others available to them," he adds. "That will be the true test of the agency as meritocracy becomes the differentiator."

Wunderman Thompson’s appointment of Mel Edwards, formerly of Wunderman, as global chief executive, and Tamara Ingram, formerly of JWT, as global chairman, sends another signal about this meritocracy. "We wanted it to feel new," Edwards said, explaining why the agency has adopted a new name.

But could the arguably incendiary language used on stage at Creative Equals and the subsequent redundancies affect another particular cohort of society – British, straight, white men – if they start to feel threatened as the industry seeks to redress its imbalance?

It is a possibility, according to Helen Kimber, managing partner at headhunter The Longhouse. "For quite some time our industry has been in danger of positive discrimination in terms of gender, ethnicity and age," she says. "Our job as a headhunter is to mitigate this and make sure that the best people are hired, but that’s not easy. So yes, possibly if you are old, middle class and white, you are suffering at the hand of this."

Jo Wallace said that she wanted to 'obliterate' the agency's reputation for being full of straight, white men

Mick Mahoney, who left as chief creative officer at sister WPP agency Ogilvy UK earlier this year and is now partner and chief creative officer at Harbour, says: "The pervading atmosphere is that there’s a lack of warmth towards straight, white men at the moment, which you can sort of understand. [Gender equality] was due a correction – everyone accepts that."

Mahoney says that while running creative departments he was never under direct pressure to pick one type of person over another to rebalance its make-up. "There was most definitely a view that the more representative we could make it, the better. Anyone worth their salt would want diversity," he concludes.

Another senior creative agrees that the atmosphere has become inflamed: "Yes, some people are feeling vulnerable. But this is always a symptom of change, there will be fallout – people are feeling fragile on all sides. Whenever there’s a redistribution of power it will make an impact."

Sarah Golding, chief executive of The & Partnership London and president of the IPA, says: "The diversity agenda cannot be considered to have ‘gone too far’ while large groups of society – women, ethnic minorities and the disabled – remain woefully under-represented at senior and many [other] levels in our industry.

"This is not a result of a lack of talent in those groups, it’s a result of legacy cultures and organisational structures that need to be addressed. For this industry to really flourish and flex its creative muscles, it needs to feel open to all. Therefore nobody should feel too ‘anything’ to be able to succeed in advertising – neither too old, too young, too rich, too poor, too white or too black."

Part of the reason that feelings have run so high at JWT is because Gustavo Martinez, its former global chief executive, allegedly made sexist and racist comments two years ago. Martinez stepped down, while insisting there was "absolutely no truth" to the allegations, but was controversially allowed to stay on at WPP by the group’s chief executive, Sir Martin Sorrell.

There is no doubt that the decision led to continued anger in parts of JWT, until Martinez finally departed in the wake of Sorrell’s exit.

The Wunderman Thompson merger – like the VMLY&R tie-up in September – suggests that Read wants to move decisively to obliterate some of the strategic mistakes of the recent past.

Picture credit: Bronac McNeill

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