CAMPAIGN REPORT: Top 300 Agencies - A year of Americanisation. As US acquisitions of global advertising groups continued apace in 1999, John Tylee looks at how the aftershocks will affect the UK industry in the year 2000

How will we best remember the UK ad industry as it said goodbye to the old millennium, certain in the knowledge that the bewildering pace of change that consumed it in1999 will be just as relentless in 2000?

How will we best remember the UK ad industry as it said goodbye to

the old millennium, certain in the knowledge that the bewildering pace

of change that consumed it in1999 will be just as relentless in

2000?



Perhaps we’ll recall it as the year agencies were beseiged by dotcom

millionaires, barely old enough to be potty trained, but flush with cash

generated by IPOs and determined to expose Chablis-swilling ad types as

communications dinosaurs.



It was certainly a period when agencies had to learn to temper the

necessity of embracing one of the most exciting media developments of

all time with the need to separate the winners from the fly-by-nights.

At least one agency chief had cause to thank his instinctive judgment in

showing one onliner the door - he later learned that his would-be client

was being chased across Europe by Interpol.



Perhaps 1999 will go down in the collective memory as the year in which

US colonisation of the global advertising business moved into overdrive

and the UK’s modest place within it became even more apparent.



For example, this year’s tables show the freshly merged Lowe Lintas &

Partners leap in to the number two slot, while the combined resources of

Rainey Kelly Campbell Roalfe and Young & Rubicam have created the UK’s

eighth ranking shop.



All of which goes to show how the world’s most powerful economy and a

high valuation by Wall Street is fuelling aggressive acquisition

activity by US groups.



The Chicago-headquartered True North merged its FCB and Bozell networks

in what appears to be a certain precursor to further acquisition

activity. As does the marriage of Leo Burnett and D’Arcy, whose BDM

holding company seems odds-on to use its public offering to bankroll the

purchase of another network.



Nor would anybody rule out another foray by Interpublic Group - pipped

at the post for D’Arcy - which has been perpetually under pressure to

deliver shareholder value, limited in what it can achieve through

organic growth and now a network short after the merger of Ammirati

Puris Lintas with Lowes.



Of course, the 1999 feeding frenzy was no more than a belated mirroring

of what is happening with multinational US-based clients, notably

Procter & Gamble and Mars, which seem ever more determined to use their

muscle to get the most effective creative work possible.



The upshot of all this has been to spark a remorseless hunt for greater

creative firepower by the major players which have been willing to pay

prices that have sometimes beggared belief.



For the evidence, look no further than Y&R’s acquisition of Rainey

Kelly. The surprise was not so much the merger - which has a compelling

logic - but that Y&R was prepared to fork out a reported pounds 25

million for an agency only six years old.



How the management at ten-year-old Duckworth Finn Grubb Waters must have

reacted to the news is not difficult to guess. The agency seems to have

been playing hard to get for too long, leaving M&C Saatchi - now an

established middle-ranker with the added appeal of being Campaign’s

agency of the year and Leagas Delaney, with its blossoming international

network - looking like the prettiest girls in town.



Y&R’s decision to dig deep into its pockets to bolster its UK operation

was probably the year’s outstanding example, not only of how the

Americanisation of the communications business is proceeding apace, but

how what happens in New York, Chicago and Detroit is having an ever-more

profound impact in London.



The result has been to put pressure on the UK outposts of US networks to

help lock in multinational clients whose unquestioned loyalty is no

longer a given. Nowhere is this more apparent than at Canary Wharf,

where Paul Simons, Ogilvy & Mather’s newly installed group chairman -

who has dubbed the agency’s recovery plan ’safe sex’, must convince

multinational clients that O&M is keeping more than just its pecker

up.



The conundrum for the major agency players is obvious - how to offer big

clients size without the inflexibility and bureaucracy which often

accompanies it. Equally important is keeping high-spending domestic

advertisers sweet - RHM chairman, Paul Wilkinson, for example, who last

year complained that clients like himself were being trampled on in

agencies’ headlong rush for global business.



Grey, built on a bedrock of global advertisers like P&G, Mars and

SmithKline Beecham, is one network which is studying an experiment,

begun last year in its London operation, as a possible way of striking

the right balance between scale and a responsive service for

clients.



Certainly, the creative work emerging from the US-based multinational

groups bears out the assertion of Martin Sorrell, WPP’s group chief

executive, that the stimulation they now provide has overcome creatives’

previous reluctance to work for them. It may be no accident that last

year’s output from WPP’s J. Walter Thompson in London was the most

noteworthy in a long time.



For some of the one-time ’new wave’ shops, 1999 was a period when motors

had to be kept ticking over while some tricky rites of passage took

place.



As founders have withdrawn, the agency culture must be passed on to new

generations, mindful of their heritage but wary of being weighed down by

it.



And nowhere more so than at Saatchi & Saatchi, still coming to terms

with the departure of its eponymous founders five years ago but showing

signs of stabilising after a rollercoaster year.



Abbott Mead Vickers BBDO has also had to defend its turf, notably with

Sainsbury’s and BT, as Peter Mead followed David Abbott in relinquishing

day-to-day involvement in the top-ranking agency, and Peter Souter has

yet to convince some detractors that he is a worthy inheritor of

Abbott’s creative legacy.



The transition has probably been most seamless at BMP DDB, where Chris

Powell climbed into the chairman’s seat and allowed the agency

stalwarts, Chris Cowpe and Ross Barr, to take the wheel as joint

managing directors.



Sorrell’s indication that the US agency leviathans are growing better at

cherishing their senior people may explain the paucity of start-ups last

year. With so many major groups now better at fulfilling the ambitions

of their best staffers, fewer ’account barons’ and more consolidated

accounts, new agencies continue to be scarce.



Moreover, those that emerge tend to be run by experienced hands intent

on making names for themselves, rather than entrepreneurial young

Turks.



Which may explain why the accumulated knowledge within Miles Calcraft

Briginshaw Duffy has enabled AMV’s first breakaway to get off the blocks

so fast.



Pedigree alone is not enough to guarantee success. Just look at Wieden &

Kennedy which continues to find London a bridge too far and is realising

that it will have to revise its USP as the epitomy of West Coast cool if

the UK market is ever to yield to it.



All this takes place while the debate continues about how an agency’s

success - or lack of it - is best measured. As the commission system

declines, so billings become increasingly irrelevant and income figures

more important.



So why don’t more agencies supply income details? Less than half of the

top 30 have done so, suggesting that many of the main players are

unwilling to open up the books while the industry’s definition of income

remains unclear.



Should it include media? And what about payment for work sourced out of

London for international markets? The Institute of Practitioners in

Advertising is attempting to establish the ground rules. But until it

does so - hopefully before next year’s tables are collated - the picture

remains distorted.



The waters are also muddied by some agencies’ attempts to give

themselves a leg up the table by lumping together the billings of all

their UK operations.



MMS has tried to compensate for this sleight-of-hand by recalculating

its 1998 ranking, based on what it would have been had they done this a

year earlier.



Is it too much to hope that this year’s tables will be the last to be

affected by smoke and mirrors tactics and agencies which puff themselves

up to look more formidable than perhaps they really are? Probably. This

is advertising, after all.



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