Sorrell is a terrible loser. The decision by the Crown Commercial Service to move the government’s media buying business to Carat last autumn was deemed nothing short of bad practice, and is now the subject of an ongoing legal dispute.
The loss of the newly consolidated Dixons Carphone business, reported by Campaign last week, has gone down just as badly. During the pitch, Sorrell backed his business partner and co-owner of M/SIX Johnny Hornby, and there was even the option of a fully fledged Group M solution in MediaCom.
Cost-savings were clearly top of mind throughout the review. Before Christmas, Sebastian James, Dixons Carphone’s chief executive, brought forward by a year targets to save a minimum of £80 million by 2017/18. As an aside, it suggests at least one of the two marketers who led the review is now living on borrowed time.
Group M’s positioning is clear: its shops represent at least a third of the UK’s £9 billion of media bought via agencies and so, when it comes to negotiating power with media owners, it can’t be beaten on price. Not consistently, at any rate, and not across multiple media.
And yet, beat it Walker Media did. Retaining its 16-year-old founding client Dixons, which includes the Currys and PC World brands, and adding Carphone Warehouse, is no mean feat – especially with other long-term relationships at play (Hornby’s relationship with Carphone Warehouse’s boss, Sir Charles Dunstone, is one of the industry’s best-known bromances).
'When it comes to negotiating power, Group M can't be beaten on price. Not consistently, at any rate'
Omnicom took one look at the dynamics among the incumbents and withdrew from contention altogether.
I understand Dentsu Aegis Network did actually pitch but failed to progress – an unusual fate for the home of Carat, the UK’s new-business leader in 2014.
Walker is celebrating the win as proof that its new home at Publicis Groupe, with its breadth of capabilities, is propelling the agency to new heights. Having mobile media specialists who used to work on the O2 business on tap will certainly help. Walker’s loss of Marks & Spencer’s £60 million media account last summer to Group M’s Mindshare cut deep, and the shop will be hoping to kick on from here.
But for Sorrell and co, the public narrative is set: Walker has been awarded the business after tabling desperate rates that are unsustainable and can only be met if Publicis takes value from its other clients. Simple market economics or sour grapes? Take your pick.