Clients are generally wary of the immediate effects of agency
They fear insurmountable conflict issues as well as poor service from
agencies that are more wrapped up in redundancies than in account
In the long term, there is the fear that with fewer agencies, the
industry will lose its competitive edge - potentially leading to poorer
quality work and higher prices. The trend also threatens to offer
clients a limited choice of network.
However, most see that a truly global agency better suits the
requirements of a truly global client. And that the bigger the agency,
the bigger its talent pool. Fear of lack of competition as the agencies
merge into a handful of giants is offset by the competition existing
within a single network as its individual outposts vie to be chosen to
develop the next global campaign.
Below are the opinions of some senior marketers, both global and
Peter Glynn-Jones, managing director and senior vice-president,
strategic development of SmithKline Beecham Consumer Healthcare
Brilliant consumer communications - through the marketing mix - is one
of the most powerful weapons we have at our disposal. And, frankly, it’s
my experience that larger agencies with global reach attract more
talented people which means we have greater choice of creative.
But large agencies shouldn’t be lured into a false sense of
One of the reasons we use global agencies is that it gives us greater
flexibility. We positively encourage internal competition between
different countries’ creative groups - and you tend to find that a
creative team whose work is chosen above any other for global
distribution will take great pride in their achievement.
It means a great deal to them internally and we, the client, get the
best ad for our brands. We’re one of the most significant players in the
global marketplace, so we have an immediate entree to the top people in
our agencies. The system should therefore rarely disappoint on this
Mike Moran, UK marketing director of Toyota
The most interesting issue for clients is that mergers, particularly
among large agencies, usually throw up client conflicts. Yet I for one
do not think it is acceptable for an agency to say that they can run two
competing clients within the same agency in a separate division.
The whole point of employing a creative hotbed is that you have a core
creative team, but if things get a bit sticky you can involve other
people across the agency. To try to artificially create these Chinese
walls is ridiculous. You only have access to half the agency’s
resources, yet you thought your fee entitled you to the whole thing.
Client handling is another issue. It’s questionable whether you are
better looked after, particularly when a merger results in internal
difficulties such as redundancies.
And yet there are some mergers that are more logical and throw up fewer
client conflicts. They are inevitable to some extent because of the
increasing pressure on costs in business and the economies of scale they
allow. For larger agencies with a high cost base, a merger is obviously
a way of maintaining a competitive position.
Eric Salamon, general manager, corporate marketing of Heinz
I’m not strongly for or against consolidation. We are seeing it among
the manufacturers and the retailers. The advertising industry is doing
it for the same reasons - it’s inevitable.
We as clients are consolidating large pieces of our advertising on
global business. Hopefully this will help agencies to meet our global
The main pitfall may be that it will get to the stage where there is a
lack of choice for advertisers and a lack of competitiveness between
David Patton, European marketing director of Sony Computer
Both of the mergers we went through with TBWA GGT Simons Palmer were
conducted with the utmost efficiency. What was important was having a
point of continuity and this was provided by Carl Johnson who was very
proactive in keeping us informed of all the developments. Any concerns
we had were addressed immediately and we felt that it was a very smooth
There are three important things to consider as a client. The first is
culture. TBWA and GGT particularly shared a similar philosophy to Simons
Palmer so the merger was perceived as a positive move both internally
and by clients, evinced by the fact that the agencies lost few of their
Second, conflict of interest has to be taken into account. However,
there was no real business conflicts for Sony PlayStation, so in that
respect we were unaffected.
Finally, there has to be some stability throughout the whole process.
Our account team was relatively unaffected and so we were able to
continue with all our work for PlayStation.
It was really business as usual.
The merger was important for the development of PlayStation as a brand,
however. During the past five years, we have gone through tremendous
growth, and our advertising needs have changed. We have become a major
international brand and if Simons Palmer had not gone through the two
mergers, we probably wouldn’t have continued working together.
As a result of the mergers, we now have dedicated creative departments
and account teams within 13 of TBWA’s offices around the world. This
infrastructure has clearly contributed to the success of the brand,
enabling us to produce a large volume of work - 25 TV commercials and
200 press executions. We couldn’t have done that with Simons Palmer.
Additional reporting by Lisa Campbell.