WPP’s VML merger—ad execs and experts react to agency shakeup

WPP made big news yesterday when it announced the merger of two of its largest creative networks, VMLY&R and Wunderman Thompson. The new entity, to be called VML, will begin operating in January of next year and will have 30,000 employees, making it what the holding company is calling the largest global creative agency. The move, which comes during Advertising Week in New York, has unleashed a string of reactions from advertising executives and experts—some positive, some negative and some predictions of layoffs—and some jokes about other options for the new name. After news of the merger broke, R/GA resurfaced a 2018 post on X (formerly known as Twitter) that read, “The year is 2078. There is one ad agency left: WPPublicisCom&IPGDentsuCorpCo. It slowly orbits the earth in a space barge.” The year is 2078. There is one ad agency left: WPPublicisCom&IPGDentsuCorpCo. It slowly orbits the earth in a space barge.— R/GA (@RGA) September 26, 2018 I can’t believe they didn’t go with VMLY&RWJWT. These folks are brand experts? https://t.co/XoAuA8P0Gn— Brian Morrissey (@bmorrissey) October 17, 2023 Beyond the joking social media posts, industry insiders also weighed on the significance of the merger for WPP. Several executives interviewed by Ad Age see the potential for the new network to provide scale for larger clients, which could be a potential advantage in holding company-level pitches that have become increasingly common in recent years. “The new combination will give WPP a new, globally scaled offering, which as major marketers move to fewer global relationships, should be a good, competitively scaled offering,” said Matt Ryan, CEO of consultancy Roth Ryan Hayes. “The resulting company should definitely be a competitor to the consulting companies like Deloitte Digital and Accenture Song.” “Independently, they were not small enough to be an agility player anyway, so why not scale for the clients that need that scale?” Ryan added. Check out the latest Ad Age events and award programs VMLY&R and Wunderman Thompson were third and ninth in the U.S., respectively, on consultancy R3’s most recent creative agency new business ranking, which lists agencies by the size of accounts won throughout the year. The merger stands to bolster the network’s presence in North America, according to Greg Paull, principal of R3. “It's not a secret that the North American creative agencies haven’t grown at the same speed as WPP’s other assets,” said Paull. The merger “is a reflection that both agencies have had their challenges in North America, and it's clear that WPP believed that one plus one should equal three rather than keeping them separate.” Also read: More agency consolidation is on the way From a capabilities standpoint, multiple people who spoke with Ad Age agreed that the new entity provides what is needed from a modern agency, especially as marketers look to consolidate their agency relationships. The move will create an offering combining commerce, loyalty and technology with creativity at the forefront, according to Jon Cook, global CEO of the new entity. The merger “signals the integration of customer experience, brand experience and commerce services—not just under one logo—but as interconnected disciplines that form business solutions,” said Jay Pattisall, VP and principal analyst at Forrester. “Marketers are tired of managing multiple, duplicative specialists. They must deliver the aligned experiences that consumers demand from brands. And brands need agencies as connected as consumer expectations. What this merger shows is that CX and commerce are part of the larger marketing experience.” But the move will likely come with integration challenges, according to several executives who predicted that there will be layoffs in the future to eliminate duplicative positions. Cook told Ad Age there are no plans for layoffs as a result of the merger, but that the new entity will be “doubling down” in some areas and “doing less” in some areas. “From where I sit, I have a hard time thinking any client needs a bigger, more bloated agency. But, of course, these sort of things aren’t about ‘synergies’ or whatever the b.s. the press release touts ... they’re always about consolidation and cutting costs,” wrote John Kovacevich, founder and creative director of agency SOS, in a LinkedIn post. “Ultimately, people are going to lose their jobs. And that sucks.” “Likely there will be a fair amount of talent disruption and retention issues; particularly among creatives,” Ryan said. One consultant, who spoke under the condition of anonymity, said large clients won’t have an issue with the merger as long as the right talent stays on board. “As long as clients get the people and the resources to do stuff for them and if they have access to more resources, they'll be happy. And as long as their favorite people who work on their business don't get sized out, then most clients will be happy,” the consultant said. The move essentially ends the legacy of some of the most historic ad agencies, Young & Rubicam, J. Walter Thompson and Wunderman. The entities had gone through their own mergers in 2018, but partially retained their names as part of what is currently VMLY&R and Wunderman Thompson. “I don't have a dog in this fight and have zero association with any of the agencies,” Kovacevich wrote in a LinkedIn post. “I'm old and I appreciate ad industry history, so I have a little nostalgia sadness when the old names officially die off. But it's a business of change and few things last forever.” David Griner, co-founder of the Creative Ladder, also chimed in with some biographic info on the various founders of the legacy agencies. “I'm too young to have known James Thompson or Raymond Rubicam or John Young or Lester Wunderman,” wrote Evan Levy, president of Atlanta shop Fitzco, on LinkedIn. “I do know they gave their hearts and souls to build agencies that bore their names and made award-winning work and employed brilliant and creative people and threw great parties and reveled in pitches won and agonized over pitches lost and endured infinite late nights solving all the world’s problems together. If I concentrate, I can smell the pizza and cigarettes. But these, as of today, are no more. Retired and mushed together by WPP, which is short for Wire and Plastic Products. Sounds about right. RIP.” While some have been nostalgic about the legacy agencies, others believe the legacy brands just weren’t what they once were, so modernizing the names could change perceptions. “You can’t imagine how many times we’ve been in meetings with [a marketer] who’s never worked with Wunderman or J. Walter Thompson, and I’ll have [the agencies] on a long list and they will go, ‘Isn’t that like a big old fashioned agency?’ Maybe they’re big, but they’re definitely not old-fashioned. It’s funny how people think when they see those names. This is coming from senior people who should know better,” Ryan said. Multiple executives shrugged off the merger as just another in a continued trend. Other recent mergers include WPP’s media investment arm GroupM combining Essence and Mediacom and Dentsu consolidating its creative shops under the name Dentsu Creative. “From my perspective, it is about the capabilities, talent and vision more than the brand name,” said Michael Kassan, CEO of MediaLink. “CMOs are looking for business partners, and having broad capability, strength and scale from their agency partners is essential to their growth and success.” “This [merger] signals the role of the independent creative brand is becoming diminished,” Paull said. “You've seen that through what Publicis has done [with its Power of One structure] and increasingly larger marketers are looking to have holding company relationships with their agency partners to drive efficiencies and effectiveness." That said, he added, that it was “sad” to see the end of “incredibly long-serving brand names.”

WPP’s VML merger—ad execs and experts react to agency shakeup

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