Corporate speak is a funny business. When the big cheese chairman says
‘we’re focusing on our core businesses’ what he or she really means is
‘we’ve wasted millions trying to expand and now we’re going to sell
those businesses at a loss and go back to where we started’. What, then,
are we to make of the Omnicom chairman Bruce Crawford’s explanation last
week, of the news that he was selling his 13 per cent stake in Aegis,
that ‘we saw few opportunities for future co-operation with Aegis’?
Students of corporate speak will know that he didn’t mean that at all.
After all, why has it taken a smart operator like Omnicom (and it’s
smart, having more than doubled the value of its investment in Aegis)
two-and-a-half years to discover that there weren’t any areas in which
they could work together? My guess is what Crawford was really saying
was this: ‘We’ve spent two-and-a-half years crawling all over Aegis and
we’ve learned the tricks of the trade. During that time we stopped any
of our major competitors like Interpublic or WPP buying Aegis at a
bargain price and we’ve made a ton of money. So now we’re going to do
our own thing.’ Being a courteous chap, though, one can be sure that
Crawford did at least say thanks.
And what happens next? One simple move like this is going to set off a
chain reaction all through the industry. Obviously everybody knows that
the Omnicom agencies in this country - Abbott Mead and BMP DDB ( and, if
it wishes - but it apparently doesn’t - TBWA will have to extricate
itself from a joint venture with, ironically, Carat, before it can join
in) have delayed their merger only because they can’t find a building.
In Europe, too, one can assume that, where possible, the same thing will
happen with the BBDO and DDB buying operations put together sooner or
later. That in turn means the Media Partnership, the Omnicom/ WPP club,
must inevitably dissolve. Certainly the noises WPP is making about
putting together the J. Walter Thompson and Ogilvy and Mather media
operations suggest that it too has been reading the tea-leaves about
Omnicom’s future intentions.
And where does this leave Aegis? The bad news is that its ability to hit
the US market - where it must be if it is to have credibility as a
global player - with a bang through some deal with Omnicom is obviously
a non-starter. The good news, however, is that it is now master of its
own destiny, certainly for the first time for many years, and is no
longer the financial equivalent of a house of cards. Better still, it
also has some money to play with, money which it must spend on a US
media independent or two to give it at least a toe-hold.
But, those with long memories will recall, it was Aegis’s habit of
wandering around with an open cheque-book that got it into trouble in
the first place. It will have to spend wisely if history is not to