A mixture of surprise and cynicism met the announcement that Butler
Lutos Sutton Wilkinson was to merge with Cowan Kemsley Taylor to create
an agency with claimed billings of pounds 60 million (Campaign, last
While some sceptics pass off the two agencies’ coming together as ’two
times nothing equals nothing’, others are less pessimistic about the
benefits of two modest-sized agencies joining forces.
The question confronting agencies facing the merger dilemma is whether
or not the marriage will be greater than the sum of its parts.
Certainly, combining forces with the right partner can provide scale
that might otherwise take years to achieve. ’To grow organically and get
into the Top 20 would take forever,’ an agency executive who has gone
through the merger process comments. ’Either acquiring or joining up
with someone is the only route.’
Sometimes, agency marriages mean compromises have to be made. Some
suggest the very idea of merger is a myth. ’A merger may be described by
the people involved as a meeting of two minds but it is in fact
something else,’ one agency chief claims. ’It’s always a takeover of one
by the other.’
In the case of Simons Palmer Clemmow Johnson, its merger earlier this
year with TBWA provided the obvious advantage of instant access to an
international network. Indeed, Paul Simons, chief executive of TBWA
Simons Palmer, stresses the importance of knowing why you are looking to
merge rather than merging for the sake of it.
’It’s like being in a relationship when you’re younger. You go out with
several people but you decide you’re not quite right for each other. You
can’t generalise,’ he says.
The newly christened RPM3’s stated goal is to offer its clients a
broader base of talent, both creative and planning, the latter being a
recognised weakness at Butler Lutos. Both parties insist the agencies
have not so much merged as reinvented themselves as a new agency with a
Matthew Lutos, the creative director, says the idea of creating a new
agency arose when Butler Lutos carried out an audit to gauge people’s
perceptions of the agency.
’It was clear that we needed to have more talent and offer our clients
more,’ he says.
The agency has already made its way on to a pitch-list alongside BDDP
GGT, Lowe Howard-Spink, Bartle Bogle Hegarty and BMP DDB. Does that mean
RPM3 views those shops as its most obvious rivals? Paul Cowan, managing
director of the agency, believes its regular challengers will be
slightly smaller. ’I would imagine ourselves alongside the likes of
Walsh Trott Chick Smith, Duckworth Finn Grubb Waters and HHCL &
Partners, among others.
I want to position the agency as bright, dynamic and innovative, but I
want us to take on the smaller, quirky clients as well as bigger
The agency’s success may depend on how quickly it recognises what it
does best rather than making a headlong rush to be trendy.
Hugh Burkitt, Court Burkitt & Partners’ chairman, engineered the merger
of the then Burkitt Weinreich Bryant and Edwards Martin Thornton to
create Court Burkitt. He believes too many people in the industry think
trendy is good.
’The ’two times nothing equals nothing’ opinion is exactly what you’d
expect to hear from an industry luncher at the Ivy,’ he says. ’Everyone
talks about agencies being fashionable and unfashionable, but the only
opinion that actually matters is that of the client. I doubt any
agency’s clients have a view of an agency before a merger. But if Butler
Lutos and CKT can identify their key strengths, they will do well.’
Nevertheless, the agency bridal path can be strewn with pitfalls. Leon
Jaume, the Ogilvy & Mather deputy creative director, was involved in
FCA’s merging of his agency, Mavity Gilmore Jaume, with Brooks Legon
Bloomfield in the late 80s. It is not something he remembers fondly.
’It was probably the worst time in my advertising life,’ he recalls.
’Many agencies have very strong personalities and ours were no
different. It’s like trying to merge two football teams. Who’s going to
be manager? What colours will you wear and who plays what position?’
His verdict: ’If there was the international element, then fine, but
generally I’d give mergers the thumbs down. They hurt, they very seldom
work and, although they may give you a short-term shot in the arm, what
about long term?’
The 1993 merger of Leagas Shafron Davis with Ayer was an outstanding
example of short-term gain at the expense of long-term benefit. Looking
back, Ron Leagas, the Leagas Shafron Davis chairman, believes the fit
has to be exactly right or agencies will founder.
’I think you can get speedier results if you merge with the right
partner,’ he says. ’What we thought we’d get, we didn’t, because of the
subsequent changes of ownership, so we pulled out. People at the time
said it was a business masterstroke, but I wouldn’t say that. In many
cases the benefits are temporary.’
He adds: ’If you can find two agencies that have very different
strengths, then it can go quite a long way, but that’s difficult to do.
People who run their own shows tend to want things a certain way and any
relationship needs an area of compatibility.’