Martin Sorrell and the Changing Agency Model
Sunday’s news of Sir Martin Sorrell parting with WPP came as a bit of a shock to most of us. Particularly for me, as I’d spent the better part of an hour on Saturday evening arguing that he would stay (at least for a little while).
Sir Martin has been omnipotent in the ad industry for as long as I can remember – and I’ve been around for a decade (or three). He built an empire and achieved unparalleled success, and made a huge impact on the ad industry.
So, why now?
While the headlines have been dominated by the recent allegations and lingering resentment over Sir Martin’s “excessive” remuneration, it is the agency holding model itself which is in need of a restructure – 2017 was WPP’s worst performing year since the recession.
WPP became an unwieldy behemoth, with investors and clients alike not fully knowing where revenues and profits are coming from.
Mergers between WPP companies have already taken place, and speculation is now rife of a potential sell-off. However, the key issue remains that they need new business models for their core disciplines: creative and media.
Media is no longer just about cost. Marketers are looking to forge partner relationships with high quality service, and expect transparent business practices. These are all areas that independent agencies can and do excel in.
But don’t take my word for it. To quote Bob Wootton, media luminary and principal at Deconstruction Consulting: “WPP has tended to commoditise. With the race to the bottom more or less complete, independents with a difference pitch are now doing rather well”.
The world is changing and the networks will have to adapt to survive, but the independents are in good shape and can offer a refreshing alternative.
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