There was a time in the early 1980s when Rupert Murdoch was one
recalcitrant banker away from meltdown; when Time Warner wasn’t even a
twinkle in the merger maker’s eye; when even Walt Disney was under
pressure after a string of film flops; and when UK and European media
operations were the stocks to be seen with.
The likes of Elsevier, Pearson and the privately owned Fininvest and
Bertelsmann were, for a brief, glorious moment, considered the media
companies most likely to succeed. They temporarily helped create a new
pecking order in global media’s Premier League, before the US
powerhouses asserted their global dominance.
Back then, though, this intense New World/Old World media rivalry was
not a fact of advertising agency life. Because in advertising agency
terms, there was no comparison between the operations on either side of
Saatchi & Saatchi, WPP and Publicis had all shown the lead in creating
early incarnations of the global advertising agency networks. It didn’t
even matter that when Maurice Saatchi bought Bates Advertising in the
US, a staggering 30 per cent of its billings walked out of the door in
the first two weeks. They walked, muttering darkly about what the Brits
knew about advertising. It didn’t matter because the clients soon came
back when they saw what they were missing.
When WPP finally acquired J. Walter Thompson - that living, breathing
embodiment of effortless Madison Avenue elegance - the transformation
was complete. It was no less miraculous a transformation than the one
which turned a Bristol lad named Archibald Leach into the Hollywood
legend, Cary Grant.
UK and European ad agencies were the style leaders and it seemed that
there was nothing they couldn’t do. They employed the best creative
talent, the most dynamic management, and they were the ones embarked on
strategies of globalisation that would surely see the world’s
advertising marching to the beat of British and European drums. Yet, it
hasn’t worked out quite like that.
Somewhere between then and now, and largely without commentators
noticing, UK and European agencies have surrendered this apparently
unassailable position. At least they have if WPP’s chief executive,
Martin Sorrell, is to be believed.
Sorrell chose an off-the-cuff address to the Incorporated Society of
British Advertisers, interrupted only by the tinkling of cutlery and the
polite rattle of wine glasses, to give voice to what he regards as one
of the toughest tasks facing UK and European ad agencies in the coming
years - the increasingly unequal struggle with their US-based
Speaking as the Dow Jones Index soared past 10,000 points, Sorrell’s
points seem to have renewed force. US groups have higher ratings on Wall
Street, he argued, and as a consequence enjoy easier access to the
institutional money that fuels international expansion.
’While it is true that US advertising groups like ourselves and Omnicom
trade on higher profits per earning ratios than the likes of WPP, that
is simply because we have a longer term history of consistently
delivering added value to shareholders,’ IPG’s chief executive officer,
Phil Geier, counters.
’WPP does not have that record. But I don’t think it’s the result of any
in-built structural advantage that the US financial system has over
Europe. There are plenty of companies in Europe that trade at very high
multiples, after all.’
Sorrell also noted that because more global business was being
co-ordinated from North America, the problem of a widening gap between
US and Europe-based agencies was not just related to the 50 per cent of
worldwide advertising expenditure that originates in the US, but to the
two-thirds of the world’s adspend that is directly influenced by the
world’s most powerful economy.
And there was more bad news. Non-US companies, Sorrell pointed out, had
traditionally been able to recruit the cream of the world’s creative
talent because these free spirits were unwilling to work for the more
rigorously structured US multinationals. Unfortunately that is no longer
’I don’t necessarily agree that the communications business is becoming
more Americanised, but then I don’t really see Omnicom as an American
communications giant. We are the purely financial holding company for a
global brand which does roughly half its business inside the US and half
outside,’ Omnicom’s chief executive officer, John Wren, says.
’If you look at our nine most senior executives, two are British, three
are French and four are American.
And that helps with attracting the creative talent because they work for
the agencies concerned. They work for TBWA, for example, not for some
huge American multinational.’
Even Interpublic, whose worldwide expansion was fuelled by the ambitions
of its US clients and whose rigid structures swiftly passed into legend
in the loucher advertising capitals of London and Paris, believes that
the creative culture is changing.
’Talented creatives want to work for companies that make creative ads,’
’For a long while, London was seen as the creative capital. But US
creativity has improved or at least been seen to have improved in recent
’One problem is that there is so much advertising over here that the
good stuff can just disappear or get lost. But there has been more
attention paid to awards over recent years and a much better standard of
Grey Communications 48
Interpublic Group 36
True North Communications 36
Young & Rubicam n/a
Source: Financial Times/Wall Street Journal