GroupM’s chief executive for North America has admitted that the world’s biggest media buying company has allowed itself to become commoditized, a problem compounded by what he described as an inability to sell an offer of growth into the C-suite.
Tim Castree, who was bumped up to the top job from Wavemaker in December, was speaking frankly in discussion with Michael Farmer, the author of Madison Avenue Manslaughter.
The two discussed the complexities that are leading clients to shake up agency models and, ultimately, slash marketing spend. They concluded that brands’ slow growth following the post-20th century boom had pressed pause of the free reign of chief marketing officers, who are now at the mercy of procurement and driven by bonuses.
Castree noted, however, that clients cannot be held entirely responsible for the ad industry’s erratic budgets and shallow relationship.
“We've allowed ourselves to become commoditized,” he said. “It's easy to blame procurement, but it takes to two to tango. I've certainly been a party to some deals that I regret.
“I give us credit for the commercial discipline that GroupM has, but that doesn't mean we haven't written deals that we look at afterwards and say, 'Gee, that wasn't the right deal to write.' Or we write the deal and think, 'We'll make it better next year or the year after' and for that not to materialise.”
He added that the industry has collectively “dropped the ball” on the matter of cross-channel attribution measurement – an issue that was, in hindsight, not taken seriously enough when the media landscape first began to fragment.
The final key area Castree hopes GroupM “can and should be doing better” is the way it tells its stories to chief marketers and chief executive officers.
He said that while he believes the WPP unit has been consistent in building out the necessary new media capabilities (such as search, programmatic and data), it has “done a terrible job at telling the story about how all of the capability we've been building gets packaged and aligned around growth-oriented solutions for marketers.”
“We haven't had that story of growth, we haven't taken that effectively enough to the chief marketing officer, and we haven't taken it to the chief executive where [the likes of] Accenture or our indirect competitors have.”
The gatekeeper of procurement
Farmer, a professor in the Branding and Integrated Communications program at City College of New York, has argued in three editions of his book that the majority of agencies suffer from the same affliction. He believes that too many agencies sell their services in a way that’s aligned to their product — “’We're in the business to do your media or we're in the business to do your creative’” — and not inextricably linked to alleviating the problem of slow or zero growth.
“The problem agencies have is procurement is running the relationship,” he said. “They have to start elevating the dialogue and having discussions at a higher level about what you can actually do for someone that will generate massive amounts of value — then procurement will listen.
“Getting from here to there is not simple but it's possible. All you have to do is be perceived to be great at a higher level.”
In preparation for jumping from procurement to the C-suite in GroupM’s most critical market, Castree has unveiled a new leadership team to “simplify the complexity brought on by media fragmentation.”
US chief marketing officer Jill Kelly has joined from Digitas, where she was global chief marketing officer. Meanwhile, Castree has promoted three others: Matt Sweeney, most recently Xaxis’ North American chief executive has been named chief investment officer; Lyle Schwartz, most recently president of investment, takes on the role of chief integration officer; and Beth LeTendre, most recently chief executive of Catalyst, is now the first chief executive of GroupM Performance US.
Castree himself is the product of Sorrell-era simplification, taking the role as Wavemaker’s global chief executive after the 2017 merger of MEC and Maxus. He joined group leadership as WPP chief Mark Read began to unveil his overreaching transformation strategy, which is grounded in streamlining the company through divesting and consolidating large chunks of business.
The GroupM chief, who reports to global chief executive, Kelly Clark, told The Drum in December his first goal was to make the company easier for clients to navigate.
The move to a new group office space in the World Trade Center – a relocation led by Clark – was a physical manifestation of this mission. WPP recently moved its North American head office staff into the same building.
Across the pond in London, WPP HQ similarly moved to sit with the likes of Ogilvy and Wavemaker in Sea Containers House.
“To get to the place...where we can start to break out of the pack, preserve our margins and get back into the right conversations with clients, we have to elevate our game,” Castree asserted.