Sad, yes, to see the demise of once-grand agencies, but the economy is in a long-term funk. Advertisers struggle to grow the top line and cut costs to boost the bottom line; agencies (to repeat ourselves) struggle to grow the top line and cut costs to boost the bottom line.
Shuttering marginal agencies and a staggering holding company is ultimately good for advertisers and the agency community. When the agencies close, there are two outcomes: Business shifts to successor agencies, or jumps to a competitor. In both cases, non-essential costs-the overhead of the closed agency-get removed from the system while an advertiser still gets the work it needs. Closing Cordiant Communications Group, meanwhile, resolves client concerns about its financial stability; WPP is in a stronger position to develop Cordiant's vital specialty businesses.
Other owners of faltering agencies have merged agency names in search of a cure, ending up with no culture and no clear identity. Agency wranglers today often kill faded brands; thankfully, we have no Lowe Bozell (LoBo?), no Saatchi & D'Arcy, no J. Walter Bates.
Back in 1986, agency boss Bob Jacoby sold Ted Bates Worldwide in what was then the biggest ad deal in history. Now Bates, which long ago surrendered its unique selling proposition, nears its end.
It's often said the comfortable world of agencies changed after the sale of Bates. So be it. There's opportunity for agencies to succeed in meeting the needs of cost-conscious clients. Advertisers don't need more agencies with a past. They need agencies with a future.