What’s GroupM For?

My apologies to GroupM for the click-bait title. I could just as easily have substituted OMG, MediaBrands or Publicis Media for the WPP media operation, but that’s what you get if you’re the tallest poppy – you attract all the attention, wanted or not.

Now that I’ve got your click, the real question is: what is the point of the media agency mini-holding companies? Do they even have a point anymore?

The question as it pertains to GroupM in particular was posed by Gideon Spanier in the current print edition of ‘Campaign’. He writes that he’s made the point about the need for a reboot at GroupM before, in 2016. This time around Gideon writes: ‘GroupM has struggled to articulate its purpose in this changed market or even why it needs to exist as a brand.’

This never even used to be a question. It was generally accepted by advertisers that the biggest buyers got the best deals. That’s not to say that it was true, just that certain figures within advertiser organisations believed it to be true. And it suited the holding company bosses to play that tune.

The bigger you are the better the deals in other words. So if you happened to have Mindshare, MediaCom, what was then MEC and the dear departed Maxus in your stable, why wouldn’t you aggregate all those lovely volumes together into one even lovelier volume and beat the crap out of any media owner that dared to ask for some business?

As Cog Blog readers are a discerning and well-informed bunch, you’ll have spotted the flaw in this plan. Or rather, the several flaws.

But flaws or no flaws, on March 5th 2015 the first small cracks that would lead eventually to the world caving in for those whose profits and bonuses depended on media-vendor revenue appeared.

That was the fateful day when one of GroupM’s past employees, Jon Mandel, in his role as an independent consultant stood up in front of the US advertiser association, the ANA and presented the results of his research into the admitted behaviours of the planning and buying community.

Mandel did not name names – and it is important to stress that the criticisms of behaviours have never been focussed on any individual agency or agency group.

The point remains though that the trend for aggregating spend volumes as a key element in negotiations has at the very least slowed in the wake of the investigation that followed Mandel’s original presentation.

GroupM, and the other mini-holding companies still have a role in a non-volume obsessed world.

Their very scale allows them to attract talent, to invest in specialist businesses, research tools and technologies that can then be made available to the client-facing media agencies within the stable.

They can or should be able to drive consistencies through their networks, ensuring the highest standards and sharing best practice.

The individual networks do this too, of course but their focus is, rightly on their clients. A supra-organisation can play a useful role setting operating principles and supporting their networks.

It’s an interesting debate as to whether an organisation like Xaxis exists primarily as a centre of excellence to the GroupM agencies, or as a winner of direct business. I can well imagine that the stakeholder debates on boundaries, and where one stops and the other starts were and are lively.

The media agency landscape is evolving as planning and related activities move centre-stage, and as trading moves to sit alongside as opposed to above these more consultancy-looking roles.

The mini-holding companies need to evolve too. Naturally some will do that better than others. We’ll see how that goes.

1 Comment
  1. Personally, I think it is time that the Agency Hold Co’s retreat (back?) to a background function. I am not booking tickets with “One World” but with British Airways or Cathay Pacific. I am not buying Unilever, I am buying Lux. I am not buying a Volkswagen Group but an Audi. Sure, in all these instances, some kind of larger entity helps keep cost down, helps invest in innovation, and more. I believe that the role of the brands within the agency groups are going to be more important rather than the parent. It is interesting to see a brand conglomerate specialist take a board position with WPP in Keith Weed – more about that here and yes this is a shameless plug… https://www.mediapost.com/publications/article/341002/a-congratulatory-letter-to-keith-weed-new-wpp-boa.html

Leave a Reply

Your email address will not be published. Required fields are marked *