Why agencies tinker with their own brands; Announcing our first Unmade event

Welcome to Unmade, written in central London while you were sleeping on Wednesday morning.

Happy World Design Day.

It’s been a hectic 24 hours. The media world has been consumed by the implications of Elon Musk’s agreement to buy Twitter. Yesterday, The Unmade Index of ASX-listed media and marketing shares slumped back into correction territory. Accenture Interactive changed its name to Accenture Song and merged most of its global agencies under the brand. And while you were asleep this morning, WPP announced that it was merging its media agency networks Essence and Mediacom. Tuesdays, huh?

Lots to cover, which I’ll come on to in a moment.

Announcing our first event

First though, I have news of Unmade’s first in-person event.

I’m excited to say that we’ll be holding our first event in just under a month from now, in Sydney on the evening of Tuesday May 24.

We’ve chosen the topic we believe is the most pressing one for the industry – the impact of the cost of living crisis. With energy costs at record highs, inflation rising and interest rates about to follow, the coming months are going to be uniquely challenging for anybody involved in marketing to price sensitive consumers – which is everyone working in the communications industry.

We’ve put together a brilliant panel. You can read more about our four speakers on the event website, although I suspect you’ll already know a lot about most, or all, of them.

As CMO and VP of marketing at Optus, Melissa Hopkins already has a front row view of how consumers are behaving. Aimee Buchanan leads GroupM, the country’s single biggest planner and buyer of advertising. Prof Jana Bowden has deep expertise on consumer behaviour. And Al Crawford is among the most impactful strategist I’ve ever met.

I can’t wait to moderate the conversation. In keeping with Unmade’s style, it will be an informal event – it’ll take place at The Forresters pub in Surry Hills.

For most of our audience, tickets are $69. But our subscribing members tickets are just $10 each.You can take out a paying membership of Unmade from as little as $65 for one month, by the way. (I’ll let you do the maths…)

If you do choose to take out the paying subscription ahead of buying as ticket, we’ll quickly email you with a discount code to use. If you’re in a hurry, ping an email to my colleague Damian Francis at damian@unmade.media once you’ve subscribed and he’ll send it straight through.

Given the size of the venue, we expect the event to sell out quite quickly.

I do hope to see you there.

Another WPP merger

In a coldly rational world there would be far fewer brands. Against the backdrop of changing business models, there is a logic, or even inevitability, about this morning’s news that WPP is merging Mediacom and Essence.

Yet, outside of the media industry, this constant chopping and merging of brands rarely happens.

I can list on the fingers of one hand the times that consumer brands have ripped it up and started again. In the UK, anyone over the age of 40 still thinks of Snickers bars as Marathons, and Starburst lollies as Opal Fruits. Closer to home those of a certain age will remember Telstra when it was Telecom Australia. But that’s about all I can think of.

For the most part, having poured millions into building a brand, marketers hesitate to tamper with it.

Driven by what may actually be necessity given the weird economics of the communications industry, the bosses of global agency networks have always seen things differently.

In part, that’s been pragmatic. When single country brands are folded into global operations, they’re bought for the client base, not the brand. When WPP was at the height of its growth-through-acquisition phase under former boss Sir Martin Sorrell, it was a constant.

Against the global backdrop, legendary Australian brands gradually flicker out after being bought. Six years ago, Publicis finally killed off Mojo. A decade ago The Campaign Palace was folded into the even more legendary JWT. And four years ago, JWT was in turn folded into Wunderman Thomson.

Heritage counts for little within the hold co’s when revenue is falling.

It’s gone on for at least three decades. The pioneer of media buying in the UK and perhaps globally was Chris Ingram (who did it about the same time Dennis Merchant was creating the model in Australia). Chris Ingram Associates became CIA. Which merged into Mediaedge:CIA. Which became MEC. And then merged with Maxus to become Wavemaker.

In that context, there’s no reason to be surprised about WPP’s decision this morning merge two of its biggest networks, Mediacom and Essence into, wait for it, EssenceMediacom. Over the last three or four years most of the company’s major agencies have merged. Even when it’s a closure in reality, it has to be presented as a merger to retain the clients.

There’s no reason to think that this is the end of the trend.

Just about every holding company owns too many brands. Particularly on the media side, the justification for doing so reduces all the time. Deals are negotiated at a holding company level and in a world of programmatic advertising inventory, much of the back end now sits at holding company level. There’s less differentiation than ever.

Think of three or four restaurants sharing a single kitchen.

One of the justifications for retaining so many brands used to be about managing client conflict. But clients have realised that seperate agency brands do not necessarily manage the conflict anyway. That perhaps had something to do with the shenanigans in the current Coles pitch which saw WPP awkwardly removed from the list, perhaps because of its future Woolworths production work.

At least on the media agency side, this makes the boss of the group more influential than ever before.

A decade ago, the likes of Toby Jenner running WPP’s Mediacom or James Greet at Mindshare had higher profiles than their GroupM boss John Steedman. PHD’s Barry O’Brien or OMD’s Peter Horgan were better known than their then boss Leigh Terry.

Locally, the moment when that balance tilted was when Henry Tajer stepped up from Universal McCann to become chairman of IPG Mediabrands and turned that into the main power point.

Yet despite the logic, to clients the constant mergers and rebrands must look baffling, particularly when their agency seeks to lecture them on brand stewardship.

I recall the comment from a Mumbrella reader when Publicis announced three years ago that it was merging Spark Foundry and Blue 449, just two years after Mediavest rebranded to Spark Foundry and three years after Match Media rebranded to Blue 449 (following so far?).

As a reader put it at the time:

“This is just a whole new level of stupid. So one of the agencies has been called StarcomMediavest, Mediavest and Spark Foundry in the past few years, and the other has been called Match Media, Blue 449 and now also Spark Foundry. How on earth do they convince clients that they understand brands??!? Another case of really smart, hard-working agency folk being done in by the utter stupidity of global holding groups.”

In the case of the newly merged EssenceMediacom, buried somewhere in the DNA locally is a little of Ikon, which was once seen as among Australia’s best agencies, created specifically to service CommBank more than 20 years ago. Once it fell in to the hands of WPP via the STW takeover, Ikon was folded into AKQA Media, which was in turn folded into Essence.

I presume Pat Crowley (the long time account person for CommBank as it happens), who will be boss of the merged agency, is getting a little tired of having to pick up the phone to his client and promise that, although the name is changing – again – everything will be just the same.

We also saw this week, that Accenture Interactive (itself once a rebranding from Anderson Consulting) is merging most of the agencies it’s acquired around the world over the last decade into the single brand of Accenture Song.

The only agency brands to survive that merger seem to have been Droga5, and The Monkeys in Australia. I doubt it’s a coincidence that those two agencies’ founders David Droga and Mark Green now hold senior roles within Accenture. I’m sure it must have helped to have them on hand to argue the (correct) point about the brand value. Once the founders have gone, there’s nobody inside the decision to make that case.

WPP may have gone hardest on the mergers so far because it had the biggest problems. But the same issue of owning too many agency brands faces every holding company. There will be plenty more mergers to come.

The Unmade Index

Australia’s listed media and marketing companies moved back into correction territory yesterday, with a fall in their valuations of more than 10% since the start of the year.

The Unmade Index dropped by 1.99% yesterday, taking it back below 900 points – a fall of more than 100 on the year to date.

Southern Cross Austereo had the worst of it, down by 3.21%. SCA shares are now trading close to an all time low.

I’m in London for the two-day Future of Brands conference which runs on Wednesday and Thursday. More on that probably in Saturday’s Best of the Week. And look out tomorrow for the final instalment of the audio edition of my book Media Unmade in the Unmade podcast.

As ever, we welcome hearing from you. Email us at letters@unmade.media.

And please don’t forget to grab a ticket to the Marketing in a Cost of Living Crisis panel.

Have a great day.

Toodlepip…

Tim Burrowes

Unmade