Is the departure of Martin Sorrell a turning point in the life of the classic global agency network? WPP’s share price has seen a nervous slide since his departure but that nervousness is possibly more than about losing their high profile (and highly paid!) long-time leader. It’s about serious questions being asked about the long-term viability of the existing global agency network business model in today’s online world.
The Economist earlier this year stated; ‘the world’s advertising giants are struggling to adapt to a landscape suddenly dominated by the duopoly of Google and Facebook. Some of their biggest clients, such as Procter & Gamble (P&G) and Unilever, are also being disrupted.’
Driving this disruption is of course technology which is making it simpler for clients to control and manage their own advertising – and with a detail that was never previously possible. The agency networks problems are compounded by the move away from the classic TV focussed ad campaign to an online world with an ever-changing landscape of channels.
So, with income from media commission being stripped out and the multi-million pound single channel ad campaign which could charge hundreds of thousand in ‘creative’ fees a thing of the past, how are the likes of WPP, Omnicom, Interpublic, Publicis and the rest going to be able to support their anything but lean and nimble business structures?