WPP is to advertising what Detroit was to automobiles
The so-called decline of Detroit has for the last half a century seen the once industrious, spiritual home of American automobiles crumble into decay; its halcyon days past, that moment in time scorched into the urban landscape of the US rust belt. The city has birthed a diaspora of sorts, the population vacated to pastures more prosperous.
If the disintegration of a one-time powerhouse into a pallid husk of its former glory seems a perfect allegory for WPP’s annus horribilis that’s because it is. The dethroning of WPP is happening before our eyes.
WPP’s Global Team Blue (GTB) was born from the amalgamation of five WPP agencies in Detroit to serve Ford alone — a reluctant arranged marriage of unequal partners. This week, Ford slammed the brakes on the 75-year-old relationship without an airbag, ditching Global Team Blue in favour of Omnicom’s BBDO.
GTB retained the (mostly) high volume, low margin, activation portion of the account—including media, production, CRM and digital. It represents the loss of a huge volume of fees, which fund the salaries of significant numbers of senior management; and creative resources, that enable WPP to serve other clients and pitch for new business. For WPP, the timing couldn’t be worse.
Ford marketer Joy Falotico said of BBDO that it was “excited to partner with world-class creative agencies to unlock the full potential of the iconic Blue Oval”. Read another way, WPP’s world-class sheen is but a patina.
GTB, it is said, became an advertising factory, churning out creative like entry-level Fiestas on a production line. But like the great manufacturers of the twentieth century, many on that line will now be looking for work. It is hard to guess the impact that a significant round of redundancies could have on each of the constituent agencies, given that Ogilvy and VMLY&R are already in a degree of turmoil following broader restructurings. This move might be the final catalyst for a Wunderman-JWT combination.
Something needs to change. WPP is to advertising what Detroit was to auto-manufacture. Behemoths with scale, abundant staff, capacity, prestige. Both were of their time, but times change, as WPP is learning the hard way. Where production of cars moved to Asia; production of creative is moving to smaller, faster, agile agencies.
The auto industry is leading this by moving in two directions. First is the appointment of more ‘creative hot shot’ agencies like W+K to do a limited amount of high quality, internationally relevant creative that builds an overall awareness and affinity with the brand – and hence generates more leads at the top of the funnel. Though, in terms of creative fees this will be a relatively small amount of overall spend.
The real winners are likely to be the agencies that can combine data, digital and creativity (and ideally performance marketing skills) to then build the compelling digital experience for prospects and customers, and drive the bulk of the brands communications. At MSQ, that’s precisely what we do for Groupe PSA, maker of Peugeot and Citroën, among others.
The car market is fascinating, growing more competitive than ever as manufacturers seek to build their own direct sales route to customers. As brands look increasingly to build a direct to consumer offer, they are looking to build a much more digitally-led customer experience which allows them to manage the entire marketing and sales funnel and, increasingly (as customers move towards purchase) look to personalise comms to help drive sales.
This makes effective, digitally savvy marketing more important than ever. The scale that GBT offered is no longer so important: Ford don’t need an office in each major market to rollout an effective and consistent global campaign.
If Ford can question whether it still needs the scale holding companies bring—instead looking for more agile, flexible, digitally-enabled solutions—then it opens the doors for other brands to think the same: ‘If Ford can move, why can’t we?’ One wonders how many other leading brands are also on the lookout for more prosperous pastures.
Peter Reid is the chief executive of MSQ Partners