If in doubt, simplify. That’s smart thinking at any time but it feels especially relevant now, as every business grapples with political uncertainty and digital disruption.
Unilever announced last week that it was slashing the number of ads it makes by 30% and halving the number of creative agencies with which it works from 3,000. The world’s second-biggest advertiser admitted it needed to cut costs following its rejection of Kraft Heinz’s takeover bid.
But Unilever also maintained this was about ensuring there is "less complexity". As Graeme Pitkethly, chief financial officer at Unilever, put it: "Typically, we create many more advertising assets than we actually put on air. And those assets we do show rarely, if ever, reach the point where they are no longer effective."
He added that using zero-based budgeting – starting the budget with a clean sheet rather than adjusting the previous year’s plan – helps Unilever to think more radically about "challenging the status quo", even if the suspicion remains that it’s about saving money too.
Unilever is not alone in wanting to slim down. Yannick Bolloré, chairman and chief executive of Havas, told a story at the opening of Havas Village in London last month about a client that employed 80 agencies in the US alone. That doesn’t make sense, according to Bolloré, whose group has dropped its creative and media divisions in favour of one P&L. "We are trying to simplify for clients," he said.
Havas argues that the great disruptors such as Google, Facebook and Amazon don’t worry about developing lots of outward-facing subsidiary brands. The "masterbrand" is what matters most.
There is a business logic to simplification. The pressure on brands to manage costs is relentless. The demand for transparency in media pricing is growing. The need for greater discipline on the collection and management of data is imperative.
It’s all about having focus as the pace of change accelerates. That is why, for example, Omnicom Media Group has disposed of its minority stakes in two UK businesses, Goodstuff Communications and Talon, as it focuses on its global agency networks.
There is a risk that as a business becomes more streamlined and global, it will become homogenised and lose its mojo. The rise and fall of Naked Communications, whose London office has just closed, is a reminder that creative people are often "brilliant misfits" who gravitate towards small, disruptive environments, not global corporations.
But the gravitational pull in media is only moving in one direction. Simplicity rules.