Coordination Between Shops in Holding Companies Is Key

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NEW YORK ( -- Getting employees from sibling ad shops to both "kiss and punch" is one of the ongoing

WPP and Publicis offer suggestions on how to manage quarrelsome siblings.
challenges facing the heads of holding companies, as chief executives from two of the world's largest advertising groups made clear.

Management's goal at every holding company is to ensure that their agencies, public relations firms, research shops and other entities can deliver a coordinated offering that's better and cheaper than their competitors.

Three things
Clients "come to us for three things," said Martin Sorrell, WPP Group's chief executive. "Creative execution, strategic thinking and coordination."

"We must continually change the way we are organized," agreed Publicis Groupe Chairman-CEO Maurice Levy. "We have to make sure we are not outdated."

Speaking today at the AdWatch: Outlook 2002 conference, co-sponsored by UBS Warburg, Taylor Nelson Sofres' CMR and Advertising Age, the global holding companies led by Messrs. Sorrell and Levy represent a combined $13 billion in billings.

Their comments about integrated efforts came after remarks made by Steven Heyer, president and chief operating officer of Coca-Cola Ventures, during a luncheon presentation.

'A common vocabulary'
"Agencies need a common vocablulary that is understood across all media disciplines," said Mr. Heyer, who at one point in his career served as president of Y&R Advertising. "Agencies have spent too much time investing in creative and not enough in media and in integration." Clients, he added, look to agencies to "tell me how to find my consumer."

This question of how to effectively organize and manage assets comes at a time when growth through acquisition -- by and large great generator of revenue in recent years -- is on the wane, and agencies' organic growth rate is slowing significantly in comparison to previous years.

In a statement issued June 24, WPP Group said weakness in revenue in the first five months of 2002, and the "possible continuation of this trend for the latter part of the year," will make it difficult for WPP to meet its target of 15% operating margin for the year. Mr. Sorrell said today he believes there is still room for cost improvements.

Mr. Levy, meanwhile, today said revenue expectations for Publicis for 2002 remain unchanged at slightly less than 2% below last year.

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