WORLD: ANALYSIS - Global micronetworks rise on back of the need for creativity

As creatively led hotshops go global, are big networks under threat?

Those who failed to taste the sour grapes in Maurice Saatchi's broadside against agency networks which, he claimed, were prepared to sacrifice creativity in the pursuit of profits, couldn't help but sense a hidden agenda.

"Same old Maurice. Still peddling his wares," one analyst smiled. But whatever his motives, there's no doubt that the M&C Saatchi founding partner's Sydney speech has opened up a Pandora's Box of misgivings about the effectiveness of the big network groups.

Are they, as he suggests, seeking to eliminate creativity as the prime discriminator between agencies, making advertising a loss leader for more profitable lines?

If so, are they in danger of becoming prisoners of their own outdated business models, forced to sacrifice creativity to meet the demands of the City or Wall Street and making themselves vulnerable to local creative hotshops with global aspirations?

"Part of what he says is true," Maurice Levy, the chairman of Publicis Groupe, declares. Publicis works with M&C Saatchi to service the British Airways account globally. "But to suggest we're all giving away creativity and dealing on money is simply not the reality."

Others, though, hail the new model - the micronetwork - under which global business is run through a small number of strategically placed offices, and point to its growing appeal to major clients who are keen to originate ads in a few offices around the world.

John Hegarty, the chairman and worldwide creative director of Bartle Bogle Hegarty, in which Publicis has a 49 per cent stake, recalls the laughter that greeted the agency's announcement of its international development plans.

Nobody laughs now. BBH has outlets in New York, Singapore Tokyo and Sao Paulo and an international client list graced by the likes of Unilever, Levi Strauss and Johnnie Walker.

Some certainly believe big network structures have become frozen in time. Tim Lindsay, soon to step down as the Lowe Worldwide president, says: "An account executive of the 60s could walk into a modern agency and get to work - so long as someone told him or her how to switch on the PC."

The big difference between then and now is that clients are more centralised.

If the trend continues, what need is there for networks with anything up to 100 offices? "The big networks will have to reform themselves," Hegarty warns. "That must mean closures."

It's a far cry from the time when clients needed a comprehensive range of services, which often included marketing. And they demanded that their agency networks were represented in every country in which they operated. Media inflation was high and the commission system meant that revenue piled in.

Is the new generation of international clients now opting to work through "centres of excellence" turning the network leviathans into dinosaurs? Not even Maurice Saatchi would go that far.

Nor would Bob Willott, the editor of Marketing Services Financial Intelligence.

He says: "I've yet to see evidence that clients are planning to leave the big networks in droves."

Mike Walsh, Ogilvy & Mather's chief executive for Europe, the Middle East and Africa, believes the big networks will survive because globalisation is the way of the world. And he claims that the big networks are already adapting to a changing global marketplace.

O&M's aim is to ensure offices achieve a 50/50 split between local and international business. Not least in order to reassure the network's globally aligned clients that the offices they use are well regarded in their local markets.

Levy, whose empire incorporates powerhouses such as Leo Burnett and Saatchi & Saatchi, as well as creatively led operations such as Fallon, believes well-regarded independent agencies will always have a highly specific appeal.

Clients needing a single international campaign capable of running almost everywhere but who don't necessarily require a full range of network services will use them. But BBH is more likely to prosper at the expense of domestic rivals rather than the big networks, he argues. Indeed, Hegarty acknowledges that BBH's offering isn't every international client's cup of tea.

Willott believes big networks will survive, not least because they are "safe bets" for global advertisers. But he warns that they will have to streamline their decision-making, perhaps handing it over to elite account co-ordinators committed to sustaining creative standards.

For his part, Levy refutes the notion of networks atrophied and resistant to evolution. "They may look the same from the outside," he says. "But go inside and you'll notice the changes. They're huge."

MICRONETWORK CLIENTS

Vodafone

The mobile telecommunications company splits its £250 million global business between J. Walter Thompson and Wieden & Kennedy. Wieden & Kennedy acts as the creative supplier for global brand campaigns but its lead agency status is under threat with WPP's Red Cell poised to join its roster.

Coca-Cola

The company introduced its "think global, act local" strategy three years ago in response to the belief that what seemed like a good idea in Atlanta might not necessary work in other key markets. The change has been reflected in a relentless loosening of McCann-Erickson's grip on the global business. Mother was recently appointed to handle UK advertising for Classic Coke.

Orange

The France Telecom subsidiary this year broke with its tradition of working with long-standing agency set-ups such as WCRS and Lowe by opting for Mother. The agency launched Orange's first pan-European campaign in November.

Sony

Sony switched its £70 million pan-European account from Saatchi & Saatchi to Fallon in London a year ago. Word was that Sony chiefs were finding that the multinational structure offered by Saatchis was unnecessary and that the Charlotte Street agency was no longer cutting the mustard creatively. Aiwa, a sub-brand of Sony, was awarded to Wieden & Kennedy only a matter of months later.

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