While the team model is touted as a boon to their parent
company, numerous staffers at shops like Ogilvy & Mather,
JWT and Grey fear the value of their agencies' rich
heritage and unique philosophies is fading. Said one senior agency
insider: "If it continues to go down this path, and clients go
directly to [Mr. Sorrell] for solutions rather than the heads of
agencies, it's absolutely going to start tarnishing the
Mr. Sorrell's take? Get over it.
He likens the debate over teams to adland's reaction some years
back when it unbundled media from creative. Agencies argued they
wanted to keep media-buying and planning in house rather than see
it spun off into a specialty shop.
"The market moved and clients wanted specialization in media ...
not media subservient to full-service creative," said Mr. Sorrell.
"We at WPP only reacted to a change in the marketplace and what's
happening with teams is in my view exactly the same." He added:
Execs inside WPP and out who don't grasp the need to service that
demand "need to get their heads examined."
Industry observers aren't ready to ring the death knell for
agency brands just yet, but note that an upsurge in teams --
particularly if WPP's competitors ramp up similar strategies --
could bring about major change.
"There's going to be continued interest in exploring these
models because client resources are getting stretched more than
ever, so managing multiple agencies is harder," said David Beals,
president of advertising consultancy R3:JLB. "We'll definitely continue to see
The holding company pitch, or "superpitch," was popularized
about a decade ago. Previously, only big multinationals used them,
but now they're held by midsize marketers and sometimes a single
marketing discipline, as opposed to an integrated account. For
example, a couple of years ago, Italian confectioner Ferrero Rocher
held a holding-company pitch, and more recently, J.P. Morgan called
one for only its digital-marketing business.
The most cynical view of why teams interest marketers is that
some clients have become lazy. Observers say many CMOs would
outsource the cherry-picking of best-in-class shops, and have a
comprehensive marketing solution presented to them. In a world
where new digital, mobile and other types of shops are constantly
cropping up, observers say some CMOs aren't well educated when it
comes to the agency landscape.
Another reason could simply be that CMOs are spread too
"A lot depends on the clients' organizational structure," said
Mr. Beals. "Smaller marketers that have less staff may benefit more
from it than the larger companies that have enough bandwidth to
have someone managing multiple agencies."
The team model is favored by client procurement departments,
too, which get more of a say during reviews these days. The
thinking is they can squeeze more efficiency out of agencies and
have more leverage negotiating fees when buying a volume of
services from a holding company. Still, WPP has so far managed to
expand its overall operating margin while relying on the team
approach, from 13.2% in 2010 to 14.8% in 2012.
Said Mr. Sorrell: "There are clients who don't want [teams].
They want to do the coordination function, whereas with a team the
agency does the coordination function. But in a world where finance
and procurement are becoming more powerful, the trend is that the
clients spend more time looking at their supply chain."
History is littered with examples of failed teams, the most
prominent being the 2009 collapse of Enfatico, an agency WPP built
for Dell. It proved to be too
ambitious, attempting to scale up to 1,000 staffers in a year, and
the marketers who championed the idea left Dell before Enfatico was
up and running. It was quickly folded into WPP's Y&R.
"It's not to say that when you make an omelet you don't break
some eggs," said Mr. Sorrell.
One of the pitfalls WPP claims to have overcome is earning
buy-in for the team concept beyond the marketing suite, from the
very top of companies. (In the case of Bank of America's pitch, CEO
Brian Moynihan was on board.)
"What is a necessity is that the CEO believes in the model and
gives the CMO the authority to get it done," said Mr. Sorrell.
WPP has been by far the most aggressive in promoting the team
approach, but it's hardly alone and other agency-holding companies
are showing increased interest.
Less than a year ago, Interpublic Group of Cos. built a unit to
serve MasterCard under McCann, and in May, Interpublic won a
holding-company review for Zurich Insurance. It was also a team
pitch -- with Interpublic CEO Michael Roth taking part in client
presentations -- that convinced General Motors to
hand all Cadillac brand marketing to Interpublic.
MDC Partners seems eager to dabble, too. Last month, it hired an
analytics guru to sit at the holding company level to be tapped for
new-business pitches. "While the majority of pitches are
individual-agency-led, MDC will continue to provide that
synergistic approach when an integrated solution is best for the
client," CEO Miles Nadal said at the time.
Mr. Sorrell says they can try, but competitors can't beat his
team machine. Besides having executives like Messrs. Rogers and
Korde, he also claims he's worked out the kinks.
"We have always believed in the power of bringing resources
together," he said. "The most difficult thing in an organization is
to get everyone inside the company to understand strategic and
cultural change. We are an industry where turf, territory and ego
historically was important. But with the evolution from mad men to
maths men, as we call it, it means increasingly looking for ways to