Procter & Gamble is not Grey's only client, but is its biggest and most influential in this process. If Publicis acquires Grey, it will consolidate the marketer's global business with one holding company. Most believe P&G, which as recently as two years ago employed four holding companies, is loath to put all its brands in one basket, a position its relationships with other service providers seems to support.
P&G is mum on the subject. At the Cannes International Advertising Festival, I sidled up to P&G CEO A.G. Lafley and marketing chief Jim Stengel one evening outside the Majestic Hotel. After some small talk, I asked about Grey. Lafley suddenly found something very interesting to stare at over my shoulder while Stengel said he wouldn't discuss Grey in a tone that made it clear there was no need for me to ask again. (I did ask again; Stengel's answer didn't change, nor did Lafley's intense interest in some distant focal point.)
Shops that work with P&G say it's not the marketer's style to tell agencies how to run their businesses. It is more likely to let them make decisions and then react. In 2002, P&G streamlined to two from four holding companies after Publicis acquired and shuttered D'Arcy Masius Benton & Bowles. P&G focused its business at Publicis and Grey. "It wasn't our choice, but it did allow us to say what's the best way to realign our brands," a P&G exec told Ad Age at the time.
If P&G wants more than one holding company, it could quietly bless a sale of Grey to WPP, which counts P&G rival Unilever among its largest clients. Historically, P&G/Unilever has been one of the toughest conflict challenges there is. For years, agencies that worked with one couldn't work with the other. That stance has loosened somewhat. Unilever works with Bartle Bogle Hegarty, an agency in which Publicis owns a sizable minority stake.
If WPP were to acquire Grey and successfully juggle P&G and Unilever, every other agency company should view it as a victory. Agencies believe that as a result of industry consolidation, conflict rules are outdated and bad business. Clients must change their stance, they say, and trust holding companies to put up firewalls between agencies that work for rivals. Agency execs also point out that in other service businesses, such as accounting, expertise in a category is rewarded rather than punished.
The debate comes just as more marketers launch holding-company reviews. It's a phenomenon Ad Age first identified two years ago in a story headlined, "The rise of the superagency." Because of conflict rules, holding-company CEOs like to pretend this isn't happening. But they have competed in seven such reviews in the last year.
Among parent company chiefs, WPP's Martin Sorrell has been the most vocal about the idea that holding companies might be the new full-service agencies, offering an array of services under one roof. The idea makes rivals itch. "Suicide," said one competing CEO.
Reconciling the full-service view with his desire to acquire Grey will be Sorrell's biggest challenge. It's one he could possibly pull off by promising to operate Grey independent of that full-service menu. That's an outcome marketers and holding companies that don't want their options limited should root for.