CAMPAIGN DIRECT: GGT below-the-line agencies mull new regime Robert Dwek looks at how Omnicom’s bid for the GGT Group will affect agencies above and below the line.

There’s been much discussion about the future of major ad agencies following Omnicom’s bid for the GGT Group, but what are the implications for below-the-line agencies? The question is worth asking because there tends to be much less emphasis on agency culture and branding below-the-line than there is above.

There’s been much discussion about the future of major ad agencies

following Omnicom’s bid for the GGT Group, but what are the implications

for below-the-line agencies? The question is worth asking because there

tends to be much less emphasis on agency culture and branding

below-the-line than there is above.



Both Omnicom and GGT are playing their cards close to their chests, and

what they do say implies that post-takeover life will be pretty much

business as usual. The GGT Group chairman, Mike Greenlees, comments:

’The history of Omnicom shows that they like to keep their agencies very

separate and we’ve made it very clear all the way through that our

businesses will continue as they are.’ He describes Diversified Agency

Services - Omnicom’s collection of marketing services and speciality

advertising companies - as ’a well-diversified group of companies’,

adding that he ’can see no reason for mergers.’



Michael Birkin, international president of DAS, takes the same tack:

’We’re not known for making moves for the sake of neatness. Our scale

gives us great flexibility, so any merger of agencies has to make sense

both for the agency staff and their clients. It’s total rubbish to say

that Omnicom will override agency culture just to help the bottom

line.’



However, he does admit that as far as the GGT bid is concerned, ’DAS has

had nothing to do with this deal; it’s out of my hands, so my knowledge

of what’s going to happen is no better than yours.’



Comment from most of the agencies concerned (see panel) is even less

forthcoming, with most under orders to keep shtumm. Mike Cornwall,

managing director of GGT Direct, believes it ’would not be desirable

from a management or client point of view to start slamming agencies

together.’ But rather cryptically he adds: ’But who knows what will

happen 1,000 years hence?



I’ve been told by Mike Greenlees that it’s not going to happen, at least

not imminently.’ He notes that Omnicom has already resisted the

temptation to combine below-the-line agencies like Barraclough Hall

Woolston Gray and Craik Jones (both AMV subsidiaries) with TBWA Payne

Stracey, or to merge anything with WWAV Rapp Collins.



But this last agency is itself the result of an Omnicom merger: when

WWAV was acquired by Omnicom in 1993, it was merged with an existing

Omnicom agency, Rapp & Collins (again, formed from a rather acrimonious

merger).



It is doubtful whether R&C’s carefully nurtured culture (its US founder,

Stan Rapp, is considered one of the pioneers of direct marketing) has

survived the transition, since WWAV, the UK’s biggest DM agency, has

been the dominant partner, although there didn’t appear to be a culture

clash at the time of the merger.



Another below-the-line mega-merger brought two DM and sales promotion

titans together to form Wunderman Cato Johnson. But the new supergroup

seems somewhat schizophrenic, with the Wunderman name dominant in some

markets and the Cato Johnson name dominant in others, which might give

the impression that this is still two companies.



So, where does this leave the question of below-the-line agency

branding?



As groups like Omnicom, WPP and Interpublic continue to carve up the

agency world between them, is there a danger that the less vociferous

and lower-profile below-the-line agencies will lose out - and so too,

therefore, will clients who have bought into a particular culture?



Opinion is divided, with some observers claiming below-the-line agencies

are now highly valued (witness healthy multiples for acquisition targets

such as Craik Jones and Brann), but with others arguing that

below-the-line agencies have, on the whole, been hindered by their more

functional background and by their relative youth compared to ad

agencies. It’s still only about 30 years since Wunderman Worldwide, the

world’s biggest DM agency, was founded, whereas advertising agencies

have been around for about 150 years.



Nevertheless, the 1990s have seen a trend towards much bolder

below-the-line agency branding - as demonstrated by the likes of Evans

Hunt Scott, Rapier (formerly Rapier Stead & Bowden) and OgilvyOne

(formerly O&M Direct).



Explaining the reason for his agency’s name change last summer, the

OgilvyOne chairman, Nigel Howlett, said it was intended to reflect a

greater focus on relationship marketing, which he dubbed ’customer

ownership’. ’We believe this is the quantum leap forward which so-called

’direct marketing’ has been seeking for 25 years.’



Jane Asscher, managing director of Tequila Option One, an agency formed

from a merger, believes below-the-line agency branding ’is becoming

increasingly important. If we’re in the business of building our

clients’ brands then we should be just as concerned about our own.’



Both Tequila and Option One were strong brands in their own right before

the merger, and some people question the logic of bringing these two

distinct businesses - one with a sales promotion background, the other a

DM specialist - under the same roof.



Asscher’s own view of the merger is that ’it was both hard and easy’ to

bring the two cultures together. ’Mergers take an awful lot of hard work

but once you have removed the structural barriers, such as financial and

geographical considerations, it doesn’t need to be that difficult.’



Bob Willott, the head of the specialist accountancy firm, Willott

Kingston Smith, believes the main problem in comparing above- and

below-the-line agency branding is that the latter ’is a much more

diverse sector and therefore less amenable to brand building’.

Ironically, he feels there was more name recognition below-the-line

about 10 years ago, when agencies like KLP, FKB, Clarke Hooper and

Michael Peters Group were floated on the stock market.



DM guru, Drayton Bird, is even gloomier about the prospects for agency

brand building - above-the-line as well as below. ’The whole idea is

quite hilarious. How can you build a brand if you don’t advertise it?’

He is highly sceptical about the mixing and matching of below-the-line

agency cultures within GGT and Omnicom.



’Do any of the GGT below-the-line agencies have much in common

culturally?



I doubt it. Did the GGT group have time to imbue them with any shared

values? Probably not. This deal is simply about a large holding company

taking over another holding company, which obviously wasn’t well managed

or it wouldn’t have lost the Procter & Gamble account.’



’Normally, I would say that one culture invariably dominates another but

in this case it might be that the lack of distinct cultures on either

side of the deal could actually be an advantage.’





OMNICOM BELOW-THE-LINE AGENCIES

Omnicom’s BTL subsidiaries in the UK

Countrywide Porter Novelli

CPM UK

GPC Market Access

The Alcone Marketing Group

Interbrand Newell & Sorrell

MacMillan Davies Hodes Advertising

MacMillan Davies Hodes Consultants

Paling Walters Targis

Premier Magazines

Product Plus International

Smythe Dorward Lambert

Specialist Publications

The Anvil Consultancy

WWAV Rapp Collins

GGT’s BTL subsidiaries in the UK GGT Direct

Tequila Option One

Life PR (formerly Lynn Franks)

RM Communications



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