The month in advertising: Mischievous tactics, bloodletting and creativity slowdown

We discuss the big issues in adland this month.

Apparently Sir Martin Sorrell is in the habit of emailing WPP chief executive Mark Read making observations and suggestions about what’s happening at the company he used to be synonymous with. 

His emails often conclude with a polite request for comment, along the lines of: "As a major shareholder, I’d welcome your feedback." You can almost hear Read’s teeth gnashing. 

If true, Sorrell’s insidious/mischievous tactics must be deeply irritating, perhaps even a little destabilising – poking at the inner voice most of us (except perhaps Sorrell himself) have that questions our abilities. Read has spent virtually his entire career at Sorrell’s knee, and though Sorrell is master no more, his authority is, no doubt, hard to forget, even for the cool-headed Read. 

Sorrell has had plenty to email Read about this past month. WPP’s "deteriorating" (Read’s word) revenues, a plunge in the share price (down 15% when the poor third-quarter results were announced, and still tumbling as we write, taking the company’s value to less than half what it was 18 months ago), the loss of key Ford business to rival Omnicom, the dramatic absorption of Y&R into VML (this is no merger), the exodus at Ogilvy. The seeds for all were, of course, sown on Sorrell’s watch.

The weakening of its traditional creative agency model was partially blamed for WPP’s poor results… more of that later. But among all these dramatic headlines, the last two are the ones that have dominated the industry conversation. These are the human stories, and they’re not pretty.

One of the things that has always characterised the ad industry is that it’s a people business. Despite the growing importance of ad and marketing tech, despite the trend away from owner-managed companies, despite the increasing focus on data- and AI-driven creativity (much more on that later in this issue), people are still the industry’s most valuable, differentiating assets, the magic. 

The people really matter, not just because of the eclectic personalities that are drawn to and find a home in this industry – be they straight-talking media dealmakers, strategic marketers, charismatic suits or visionary creatives (with or without tattoos, though we’re rather liking the body as a creative canvas this month). So when people aren’t treated well, and dealt with simply as numbers on a corporate spreadsheet, the reverberations go well beyond the walls of a single agency. 

The bloodletting at Y&R was poorly handled. The fledgling management team there – generally liked and respected – was shunted unceremoniously aside for the incoming VML chiefs.

It’s true that concern for individuals cannot stand in the way of vital corporate manoeuvres. And it may also be true that the Y&R leadership team wasn’t fit for purpose in the new digitally centric business. But the manner of their ousting was bruising. It will be interesting now to hear whether Read’s WPP does the decent thing by Y&R’s former chief executive, Paul Lawson, paying out a severance package higher than
his nine months’ tenure would command. 

Two of the agencies that once stood tall on the London ad scene are now unrecognisable

In the end, the strategically spot-on decision to blend VML and Y&R was mired in bad odour. The incoming VML London crew – who no doubt feel as awkward about the way their Y&R peers have been treated as the rest of the agency apparently does – now have a task on their hands to rebuild team spirit. 

The same could be said for Michael Frohlich over at Ogilvy, where the relentless managerial departures became both a sad running joke and a sobering reflection on how quickly an agency’s narrative can change when the talent makes a dash for the exit. Kevin Chesters – the last of the original ad agency management line-up – quit last month. 

The result is that two of the agencies that once stood tall on the London ad scene are now unrecognisable, and led by people who have not come up through the traditional creative agency route. These may well prove to be positive changes. Both WPP and Publicis Groupe sounded a warning note about the performance of their creative agencies in their latest results. Publicis chief Arthur Sadoun stated that his company’s new model "has allowed us to largely overcome the challenge we are facing in creative activities", while at WPP, Read said: "The slowdown primarily reflects a further weakening of the performance of our businesses in North America and in our creative agencies." Some of the big creative agency beasts of yesteryear are stumbling.

But let’s be clear: not all. At least, not yet. 

In fact, many of those creative agencies that have continued to fully invest in brand-building creative resource under the leadership of strong chief executives (of which WPP doesn’t appear to have enough) and inspirational creative chiefs (ditto) are the ones more successfully navigating the challenges of in-housing, budget squeezes, threats from management consultancies and so on. WPP lost Ford’s global brand creative task last month to BBDO and Wieden & Kennedy, not to an in-house creative department, or a management consultancy.

 Perhaps the truth is that we need far fewer of those beacons of brand-building than the agency marketplace has sustained in the past. Only the best will thrive.

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