Does WPP really stand to gain anything from killing its agency brands?

The media brands of WPP are all well-known. Precious little will be achieved by killing them all - except needless blood-letting

GroupM is soon to become WPP Media. The process has already started. The sunsetting will trigger possible (actually, for sure) employee layoffs, a deliberate and visible shift in brand positioning, recalibration of brand equity, and — hopefully — the conquest of new horizons for the media-buying behemoth. WPP is also “aligning” the once “red-hot” Grey with Ogilvy, shifting the agency network away from the AKQA Group — yet claiming that Grey will remain independent as an agency brand.

 

Is the rethink a repositioning or a rejuvenation? A retirement or a reassignment of tired brands? Or just a refresh and a rebrand? Or a restructure, and a reboot? Only Mark Read knows. Perhaps even he doesn’t know.

 

What is likely to happen to Grey as part of Ogilvy has a past precedent in what happened with Clarion. Storied agency Clarion, where many old-timers of Indian advertising began their careers, was merged into Bates some 25 years ago (I think it was 1999, if memory serves me right). It became Bates Clarion and then one fine day Clarion was dropped altogether from the name plate as Bates got rechristened as Bates CHI, which itself took on many more avatars in subsequent years.

 

In 2005, Bates acquired a majority stake in Mohammed Khan’s Enterprise Nexus, and the Indian unit took on a new name, Bates Enterprise. Soon after, rmg David, already part of the WPP network, became a part of it to make it Bates David Enterprise. In 2007, the agency was renamed Bates 141, and a few months later, it became Bates India. Then Bates, somewhere down the line, became Ogilvy’s activation arm because of its 141-Serco heritage. 

 

In 2017, Bates CHI was merged into Soho Square. And Soho Square, in 2019, became 82.5 Communications. If you got lost in the complex mergers and renamings, don’t fret — that is typically WPP at work. A similar fate most likely awaits Brand Grey — this is, without doubt,  the beginning of the fade-out. GroupM, created by WPP in 2003, today houses agencies like Mindshare, MediaCom, Maxus, MEC, Wavemaker, and Essence (and some more, like Xaxis). GroupM’s Chief Executive Officer Brian Lesser last week sent a global memo to GroupM staff outlining a new “single operating model.” GroupM’s agency brands, he said, would no longer operate as separate P&L businesses. Instead, they will be merged under one unified structure.

 

“Agency-specific job titles will sunset,” the memo said, in favour of a “unified named structure that reflects our commitment to operating as one company”. Simple.

 

Not very long ago, WPP killed three very venerable agency brands — J Walter Thompson, Young & Rubicam and Wunderman — and one is not even counting the likes of Contract, Encompass, Hungama and Fortune, which have almost been forgotten, by the renaming of the merged entities under a completely unknown banner called VML. What WPP did at VML was unbelievable. It is like if Unilever, after buying GlaxoSmithKline’s assets — Horlicks, Boost, Maltova and Viva — had merged all of them and called the new malted food drink Viva, the tiniest brand in the stable!

 

A bit of history just to put everything in perspective. The advertising agency business started when Carlton & Smith was founded in New York in 1864. It was renamed J Walter Thompson Co (JWT) when the new owner bought out Carlton in 1878. The agency was sold by Thompson to Stanley Resor for $500,000, in 1916. Through the two World Wars and more, JWT remained No. 1 in the world. One of Resor’s lieutenants, John Orr Young founded Young & Rubicam in 1923 with Raymond Rubicam. In the ’70s, Young & Rubicam (Y&R) pioneered the concept of “The Whole Egg,” acquiring direct response shop Wunderman, corporate identity design firm Landor Associates, and public relations specialist Burson-Marsteller — briefly edging out JWT from the top perch.

 

In 1987, in a hostile bid, a first in advertising, a small UK manufacturer of wire baskets and teapots called Wire and Plastic Products (WPP), acquired JWT for a record $566 million. A decade later, WPP acquired Y&R for $5.5 billion. In today’s dollars, allowing for inflation, WPP paid $11.5 billion to acquire the eliminated brands! Grey was bought in 2005 for $1.52 billion — worth at least double today. That value too will be wiped away soon.

 

The media brands of WPP are all well-known — and well-respected. Most of them are home-grown, true, but their combined brand value and customer equity would run into billions. Precious little will be achieved by killing them all — except needless blood-letting.

The author is chairman of Rediffusion