Editorial: Why 'small is beautiful' is adland's new mantra

If there has been one consistent trend in business for the past 20 years, it has been consolidation. Companies have merged, acquired and grown organically into global powerhouses and the ad industry has followed this formula.

The rise of WPP from metal basket manufacturer to the second-largest holding company in the world, for instance, has taken 20 years. Its growth has been achieved through massive acquisitions and debt: JWT, Ogilvy & Mather, Young & Rubicam, Cordiant.

The holding company model has been enjoying winning headlines for some time now and its success has been such that it has been easy to believe international scale is the key to success in the modern communications market.

However, this autumn this model's success has suffered a couple of unexpected checks. First, Samsung, one of the two major global advertisers to hold a holding-company level pitch in 2004, reversed its decision and moved some of its creative work out of WPP to Publicis' Leo Burnett. Second, Bartle Bogle Hegarty, the micro-network du jour, snatched Unilever's global Omo account from JWT and Lowe.

This latter move has caused creatively led agencies to celebrate. The might of WPP mattered less to Unilever than BBH's creative credentials. The win has also demonstrated that even the biggest of global advertisers do not feel that an agency in every market is a necessity.

Indeed, such machinations have inspired IPG's Lowe to begin repositioning itself as a micro-network with its recently unveiled "lighthouse" strategy.

The pundits are now rushing to point out that small is beautiful (New Model Agency Networks, page 28). The likes of Cossette, Creston, Chime Communications and MDC Partners will argue that being best in class is what counts, not geographical spread.

Nevertheless, no-one should underestimate the relentless march of consolidation.

These mini-holding companies will no doubt one day get swallowed by a giant, or even grow into giants themselves. Even BBH will find it hard to stay small and beautiful forever.

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