Why is there at Young & Rubicam emotional resistance to a possible
takeover by WPP that goes beyond the understandable desire to retain
independence? On paper there is a certain logic to the deal.
Y&R is one of the great advertising brands that made the business what
it is. Ray Rubicam is in the pantheon of advertising business legends
alongside Leo Burnett and David Ogilvy. Like Ogilvy Y&R had a reputation
for doing things in a certain correct way. Then, having struck hard
times in the 90s, the recently retired chief executive, Peter Georgescu,
turned the agency’s fortunes round via an extraordinary run of new
business to achieve its initial public offering in 1998.
Since the IPO, of course, much of the focus on the company has centred
on the amounts of money executives have walked away with, and
preparations to float more of the company. Y&R has not pulled off the
dramatic coups of some rivals and there has been a sense of waiting to
see what it would do with all the money raised.
Nevertheless there are some within Y&R who will turn to stone at the
idea of being acquired by Sir Martin Sorrell. For younger readers this
may be surprising. WPP is currently motoring. It is growing fast and
recently its stock has outperformed its rivals. True, its agencies do
not have the world’s best creative reputations, but nor does Y&R. Older
readers will remember the dread with which the Ogilvy old guard viewed
the prospect of Sorrell acquiring them. But the network has flourished
Although Sorrell’s reputation has improved dramatically and deservedly
since those far-off times, a few things have stuck. One is that he
doesn’t ’get’ creativity. Assuming this were true, this belongs to a
bygone age where ad agencies had to be run by admen. Today, we have
groups such as Omnicom, IPG and others where 40 per cent or more of
revenue comes from non-advertising sources. They are run by non-admen
such as John Wren and Sorrell. And why not? Have advertising people run
agency networks, but it is myopic to argue against ’suits’ running the
I’d argue against that implied definition of ’creative’. Sorrell has
demonstrated more creative thinking over the past five years than a
dozen old-school creative directors we could all name.
Which leaves us with his reputation for being miserly (something that
always makes him bristle). Is the resistance about a belief that Sorrell
is not a man who would over-pay - say, cough up dollars 2.1 billion for
Snyder Communications? If so, then the argument becomes about what the
right price is. In that case, Y&R needs to get its share price up if it
wants to resist WPP. Right now, there are not too many credible
arguments against the deal.