EDITORIAL: Clients need to see benefit of mergers

Reports that some of D'Arcy's modest-spending US domestic clients are ready to register their protest at the network's impending death and dismemberment by walking away should set alarm bells ringing in every holding company boardroom. Ever since the global ad industry leapt aboard the consolidation bandwagon it has paid insufficient attention to clients that questioned what benefit the supergroups could be to them.

Inevitably, it has been smaller clients that have found themselves most marginalised. While multinational giants such as Procter & Gamble, Mars and General Motors have always had the power to influence the shape of any mega-merger, others are forced to look on in impotent rage. This is what appears to have happened with the latest consolidation. D'Arcy's Publicis Groupe parent took the agency's P&G and GM clients into its confidence at an early stage but has made insufficiently reassuring noises to many of its smaller advertisers.

This, it appears, has left them furious because the people working on their accounts don't seem to know if they are staying or leaving. Moreover, group managers, having promised the likes of P&G continuity on their account teams, must balance that promise against the possible disruption to other accounts.

All this suggests that clients that greeted the start of agency merger mania by asking "What's in it for me?" are just as entitled to pose the question today. The answer is that client benefit has always been well down the priority list when consolidation occurs and the supergroups are still not seen as delivering the integrated marketing communications clients were promised.

The truth is that commercial benefits to clients from agency consolidation has always been questionable. The takeover frenzy led by the Saatchi brothers in the 80s may have produced economies of scale but little tangible advantages for clients. In the 90s, delivering to shareholders overrode client reluctance to embrace one-stop shopping. Today, the worldwide recession has not only resulted in publicly quoted supergroups having less to acquire, but no means with which to acquire it.

They are in an unenviable situation. On one side are shareholders demanding satisfaction, on the other are financially pressured clients demanding better service at less cost. Time's running out. Ham-fisted consolidation will only fuel client cynicism. Nor is there real evidence that clients and agencies can mutually define integration and what they want from it. Unless that can be done, and demonstrable benefits to clients can be proved, the supergroups will become little more than pointless conglomerates and the unbundling will begin.


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