Arun Sudhaman 03 Mar 2017 // 2:30PM GMT
Dazzled as they regularly are by the cult of the new, it is sometimes instructive for agencies to consider the past before unveiling their latest shiny new initiative.
In this case, let’s take a wander down memory lane and reminisce about the glorious episode that gave us Enfatico, an ill-fated ‘bespoke agency' dreamed up to service Dell by WPP.
Enfatico, we were told at the time by Dell, would come to be known as "the greatest agency in the world”. It lasted all of 16 months — scuppered in large part by the difficulties involved in agency staffers "being lumped together with people from other agencies (WPP or not) to fill out a client service arrangement”, as one industry observer put it.
The Enfatico example might be an extreme one, but it serves as a reminder that the agency business revolves around people and the firms they work for — the distinct cultures and thinking that attract and retain the best staff, as opposed to the best spreadsheet solution.
If that is the first principle of agency life, it is one that is being sorely tested by the inexorable consolidation of brands under holding groups. MSLGroup morphs ever more into ‘PubComms’, while Ogilvy PR is being dissolved in favour of one master brand.
And yesterday, of course, we revealed that Omnicom PR Group (OPRG) will merge its three global brands — FleishmanHillard, Ketchum and Porter Novelli — in four European markets: France, Italy, Netherlands and Spain. The prospect of greater collaboration among its agency brands has always been a critical element of OPRG’s raison d’être since it was formed one year ago, but the decision to actually merge the firms under the holding group brand still counts as a surprise.
There are, undoubtedly, some sensible reasons behind this decision. These have been difficult markets, and the idea that one bigger business will be easier to manage than three small ones is not especially controversial. There is already a level of collaboration on specific clients — including Philips and P&G — so the notion of ‘horizontality’ is not an alien one to the firms involved.
There are, it must be said, many clients that appear increasingly keen on this kind of integration — illustrated by the plethora of holding company reviews that have taken place in recent years, and by one-off examples such as P&G’s PR consolidation last year, PepsiCo's decision in Western Europe and AkzoNobel’s ongoing process. Conflicts become easier to manage, and clients — in theory — benefit from stronger agency operations across multiple markets.
So OPRG international president David Gallagher, who devised the new European structure, does not believe that clients will feel unduly threatened by the new structure. "The conversations I’ve had have been positive as long as I can reassure them them that the agency or brand they’ve bought into isn’t going to be tinkered with, but they will have access to more resources."
And yet, it seems clear that the agency or brand they have bought will be tinkered with, in quite dramatic fashion. After all, the entire exercise can be read as the three global PR networks effectively opting to dispense with the need for an individual brand in these four countries.
As Gallagher himself notes, there will be a "measured transition" to the OPRG brand. And that may well, as the the three agency CEO’s note, result in more opportunities for their staff. But it seems equally clear that the success of this new venture will depend on whether the talent — any agency’s critical lifeblood — feel the same sense of loyalty and passion for their newly-formed employer as they did for the storied brands that once employed them.
Gallagher will know this only too well, given the scars he still wears from the complicated Ketchum Pleon merger in Germany. There will be significant challenges, not least around staff rationalisation and purpose. FleishmanHillard, Ketchum and Porter Novelli have clear, well-established ideas for why they exist. OPRG will need to bring that kind thinking to this gambit, to avoid the notion that the entire exercise revolves purely around economies of scale and commercial viability. After all, no one — even at the holding groups — wants to work for a spreadsheet.
"If played well, you can definitely get people to pull behind a new brand if you give that brand real meaning, and invest the time and money in communication," says Richard Houghton, once of FleishmanHillard and now an agency advisor, who nevertheless predicts a "rough ride" for the next 18-24 months.
If nothing else, Gallagher and OPRG CEO Karen van Bergen deserve credit for bringing a measure of courage to the situation, rather than doing nothing to improve a set of challenged businesses. And there is little doubt that others will be watching how events unfold closely — whether from rival holding groups — or OPRG itself, as it considers how this type of structure might play out in other countries.
Yet, if OPRG wants to avoid the Enfatico experience, its leaders will be aware of the need to address the most important challenge of all — ensuring its culture and thinking attracts and retains the best talent, a difficult enough issue in bigger markets than the ones under the scope here.
"Any agency lives or dies by its culture," as Houghton puts it. "Without the people you’ve just got a big lease and depreciating equipment."