The reinvention of the holding company

Critics have called them 'dinosaurs', but holding companies are transforming themselves into 'connecting companies', slicing through individual agency brands and business silos to deliver the ever-elusive agility that brand marketers demand, writes Nicola Kemp.

John Wren
President and chief executive, Omnicom

"An idea can turn to dust or magic, depending on the talent that rubs against it." 

Advertising legend Bill Bernbach said that and it resonates today. Clients want the best talent, no matter where it resides.  

Omnicom’s agencies have collaborated for many years, sharing talent and ideas across disciplines and geographies. The marketing landscape is increasingly complex, thus the need for true partnerships – between agencies, with clients, and even outside our industry – takes on an even greater imperative for creating "magic" that transcends platforms and leverages the latest tech. More than ever, our clients need a valued partner to help them navigate this and connect brands with consumers. 

While our individual agencies’ skill sets and culture remain key to our success, clients want multiple, best-in-class agencies and services across many areas and disciplines. And they want bespoke solutions that can achieve their goals provided by a unified group of collaborating agencies.

It’s part of Omnicom’s heritage to respect the individuality and culture of our agency brands, and our "Connected Brilliance" approach, to craft customised solutions for integrated offerings, is becoming a true differentiator for us. It’s an organising principle and business philosophy that says no matter where a person sits in the Omnicom network, he or she can be connected and involved as part of one team to drive superior results on behalf of a client. We make this connection at the C-suite level and look to form a true partnership based on the client’s trust that we are optimising results in a digital world still new and unfamiliar to many.

While Bernbach’s era was long before the internet, Snapchat, Facebook, Instagram and Vine, he recognised talent as the critical factor. As we celebrate the 30th year since Doyle Dane Bernbach combined creative forces with BBDO and Needham Harper, we are proud that Omnicom’s talented people have made us the most-awarded agencies and network. Thanks to them, at Cannes you will be seeing no dust and a lot of magic.

Michael Roth
Chairman and chief executive, Interpublic

Clients are increasingly interested in a holding-company relationship as they seek to co-ordinate activity across multiple marketing channels. However, this has implications for the role and prominence of agency brands. A point of differentiation for IPG has been the ability to deliver custom integrated solutions, while respecting the identity and culture of our agencies.

When managing a brand across geographies, as well as an array of digital channels and data sources, there is clearly value for certain marketers in establishing a single point of contact and oversight at the holding-company level.

This is something we’ve been working on for more than a decade, during which time IPG has proved integration can be effective for clients in every major market and sector. A key driver is making collaboration an important part of how we reward and incentivise our employees.

Flexibility is a key benefit – to meet clients’ needs we can assemble teams from across IPG, adjust talent as needed over time, and resolve issues quickly and seamlessly. But no matter what kind of custom team we create, distinct agency brands will always be crucial. Without them, it’s impossible to attract, develop, and engage great talent, or connect with clients via shared values.

This business is about the insights, ideas and creative work we produce. Great talent wants to work at top agencies because of the agencies’ philosophy, personality and expertise – but most important, because of the range of clients and business challenges they’ll be asked to take on. Ensuring those unique cultures remain vibrant is a priority. It’s what makes this industry so colourful and creative, and continues to set us apart from so many competitors in adjacent industries.

Sir Martin Sorrell
Founder and chief executive, WPP

Some believe agency brands have been "eroded" by parent companies servicing clients through cross-group teams. If this were true, WPP would not have nine such brands that each generate more than $1bn in revenue every year. These "billion-dollar brands" show that agencies are thriving, as Cannes confirms each year.

However, it is clear that the marketplace is demanding a more integrated, horizontal approach. For more than a decade we have been helping clients reach their creative, marketing and business objectives through our unique Team model – drawing together people from across different agencies, disciplines and geographies in order to meet specific client needs. 

We now have 45 cross-group teams, accounting for more than a third of our total revenues. We also have WPP country and regional managers covering more than 50 of the territories in which we operate.

Clients are increasingly attracted by the ability to access the right talent, skills and resources wherever they sit within WPP, through a single point of contact in the form of a global client leader. They are more interested in the talent and capabilities, and less interested in where they come from.

Our people like to identify with their tribe, but if we were to design an agency from scratch today, we would design it as a fully blended, seamless offer across everything we do.

So the future is going to be less vertical and more horizontal. The verticals, the agency brands, will remain very important internally, but less critical when clients make their choices. It’s a fine balancing act. The change won’t be violent or sudden, it will happen gently and gradually over a period of time. 

Ultimately, the marketplace decides; it won’t happen because we mandate it. Media departments split from advertising agencies because that was what the market was asking for. Today, the market is asking us to integrate. The future of client service will look a lot like Global Team Blue and Red Fuse (our fully integrated, multi-agency teams for Ford and Colgate-Palmolive), just two examples of how successful this model can be.

Maurice Lévy
Chief executive, Publicis Groupe

We are at the beginning of the most transformative revolution ever: Industry 4.0 = the connecting era. And, of course, consumer control is at the heart of the revolution.

This has driven a new era of transformation.

The transformation of people – connected to each other, connected to everything – and the transformation of business – better-connected experiences, open, accessible, agile and accountable. 

Technology has given marketers access to a plethora of platforms to directly reach the consumer. We need to couple that with the right creative idea and mindset to reward consumers for their time.

Ultimately we want to see how creativity in this industry translates to real, transformative business impact for brands.

The Publicis Groupe is evolving with rapid velocity from a "holding company" to a "connecting company", providing interconnected services to our clients through the alchemy of creativity and technology.

This seismic change is driven by two trends: the convergence of technology and the empowerment of people.

This new reality, where we are at the intersection of the best content, consulting and technology capabilities, allows us to provide maximum value for our clients. This, in turn, makes our ambition to be our client’s indispensable partner for their own transformation a reality.

Of course, we have one secret weapon in this transformation era: our unrivalled creative force. We stand for creativity. It’s our raison d’être.

Our clients now have access to the finest creative minds in the group of companies.

It allows us to create world-class teams, multidisciplinary skill sets, designed to operate as one.

We call it "The Power of One"; unleashing the power of integration to deliver more with less.

It is designed for connectivity, productivity, coherence and acceleration.

It is also created for cultural and behavioural implementation.

A creative magnifier and customer-centric.

It also makes the Groupe simple, clear and easy, for our clients and us. It avoids duplication and creates agility and speed. 

And, for our agency networks, it’s a booster for their brands and their individual cultures, allowing them to deliver transformational creative work. 

The ability now to seamlessly tap into the rich reservoir of diverse talent is incredible. 

Moreover, putting Sapient Inside each network allows their clients and talents access to leading-edge strategy competencies to help brands reimagine their businesses – shared capabilities to create scale and propagate expertise. 

An open and configurable platform, it is designed to be agile and accommodate the ability to plug into the Groupe, as well as the multiple partners, specialised talents, approaches and philosophies that are unique to our brands.

And most importantly, it reignites entrepreneurship – helping our clients get to the future first.

Ash Tailor
Global brand & marketing director, Britvic

Marketers walk away from their agencies when the agencies outgrow their ability to deliver against their clients’ needs. It is as simple as that.

Some might have you believe that clients are seeking more holding company relationships that span multiple disciplines and marketing services requirements – a necessity due to the ever-increasing complex marketing world we now live in and the range of specialist channels needed to reach the target consumer. But I have to admit to having seen very few smart examples of a holding company-client partnership where the scale of the holding company has been leveraged and best-fit cross-functional teams have been installed to drive agency collaboration and integration.

The key to a closer collaboration between brands and agencies is working together to enable a true value creation. I therefore don’t see the best-in-class agency brands eroding over time. As partners (clients and agencies) in driving brand growth, we must simplify an over-complicated marketing world, ensure transparency and create checkpoints to ensure we are still all moving in the right direction. Clients have to be the driving force, and agencies the enablers.

As a marketer – who is working toward customer life cycles and not specific channels, platforms or disciplines – I look to agencies that understand my brand world and the brand challenges I have to overcome, and, most critically, I want to work with agencies that are disrupting their own business models and allow for change. When looking for agency partners, a business as ambitious as Britvic is not looking to match in size, but vision.

Ben Jankowski
Group head, global media, MasterCard

Our agency partnerships are tantamount to MasterCard’s success. Both Interpublic and Dentsu have helped us create and execute powerful positions in the marketplace. Perhaps the best example is how they have delivered for some of our bigger programmes: our sponsorship of the Rugby World Cup (RWC) and the UEFA Champions League (UCL).

IPG agency McCann leads the strategy around the brand and how we create messaging that drives brand success. MasterCard’s "Priceless" campaign was created 19 years ago and, over time, McCann’s leadership has helped our brand evolve and be more relevant in driving consumer engagement and our business. For RWC and UCL, it helped create powerful positions that engaged people and cut through a cluttered category.

We’ve learned that the more consumers engage with us, the more valuable they are. IPG-owned Octagon leads in helping us manage some of our biggest sponsorship properties. For both RWC and UCL, it helped us create experiences that engaged customers and cardholders alike and turned great events into "Priceless" events.

As the media world has become increasingly complex, Dentsu agencies Carat and IProspect understand our business and help us maximise our investments through an intricate distribution path. For big events they optimise data, creating insights to plan our message distribution in ways that make us exponentially more powerful than just our spend. Driving innovation with the media community to deliver experiences has been key to our success.

Dentsu companies such as ICUC and Story Lab help us understand our audiences and obtain superior insights. Through listening to cardholders, we can continue to be relevant to them via powerful content platforms. This helps us optimise our investment and drive business success.

Together, these companies have been instrumental in the complete communications process, and integral to MasterCard being one of the world’s fastest-growing brands.

Kathleen Hall
Corporate vice-president, global advertising and media, Microsoft

If data and machines could do great creative, we would all have been out of jobs a long time ago. They can’t. Only humans can. And humans are relationship animals.

Good relationships are developed over time and built on trust. So, in my experience, longer-lasting relationships have been key to successful work. The advantages of longer-lasting relationships are like those in any walk of life: you can "shorthand" with each other, you have a shared knowledge base/history and experience to draw on, you aren’t re-learning lessons of the past, and often the net [result] is you get better with age. The key is to keep the relationship alive and dynamic; not getting into rut.

The way we have addressed that over the years is to keep introducing new players, developing new relationships alongside the existing ones so you have the benefit of the foundation of shared trust and experience combined with new blood and new ways of looking at things. 

Rob Reilly – global creative chairman, McCann Worldgroup – and I have worked together now for almost ten years. Him being at a holding company enables us to draw on a much larger pool of talent to continue the evolution of the relationship, the work and the brand. It’s not about volume, though… it’s about curation. I don’t see a time when agency brands erode and holding companies take pre-eminence. The agencies are like tribes within the continent of the holding company. The continent is a physical structure, but not what differentiates the people. Agencies still, and I hope always will, have a personality and style filter that makes them distinct from each other – better at different things and attracting different kinds of people – so that when you are choosing a partner, you can micro-slice to the level of compatibility you seek.

This is the formula that has worked for us. Right Rob?