#AdForumSummit LA: Insight into WPP’s restructuring
by Johanna McDowell (@jomcdowell) LOS ANGELES: This year marks a big change: we normally hold our AdForum Worldwide Summits in New York, where we meet the global CEOs of the networks, the large multinational agencies and some independent agencies. As a group last year, we decided that it would be worthwhile spending a week again in Los Angeles (LA) (7–12 April 2019), which is a big centre for the advertising, media and entertainment industries, as well as the tech companies, and the competition for talent is a huge issue for all concerned.
To give some context to California and LA, California is the most-populated state in the US, with a population of 39m people. Los Angeles has a population of about 3.8m people. It is a big sprawling city; it reminds me a lot of Johannesburg, with many tall skyscrapers and then lots of smaller, residential areas in between. It is, without doubt, an entrepreneur’s city, where many pioneering spirits have come in the past and no doubt will continue into the future.
Santa Monica — where all of the consultants are staying at the Viceroy Hotel — is a seaside community of about 86 000 people. Surfing shops intermingled with fashion boutiques and a huge choice of restaurants make up Santa Monica, where everything revolves around the beach and the ocean. Our theme for the week is “Surfing the Trends” and what better place than in LA? Californians are open-minded people, with a great capacity for living in a balanced way. This permeates through to their attitude to the advertising industry and its foibles!
So, let’s review Day 1, Monday 8 April, 2019.
We started out with MeringCarson, an independent full-service agency of 82 people. Its case studies and clients reflect the economy of California, with its main clients being “Visit California” tourism, Hollywood Military Forum, Walt Disney Parks and Resorts, and the NFL Fantasy Product.
Its culture reel reflects its beliefs:
- every brand should take a stand
- brand action fuels consumer participation
And about itself:
- It’s modest but it’s mighty
It had a clear point of view and we were impressed to hear that it has successfully defended competitive pitches for the highly attractive Visit California account five times!
It sees its main competition coming from other agencies, rather than from client in-house.
We then went to meet a few of the leading exco members of the newly reconstituted WPP at one of its agencies. It’s been a year since we met with Mark Read in New York, who had taken over as acting CEO after the founder’s unexpected departure last year. It takes time to turn around a massive ship like WPP but it has certainly made some interesting moves already and these were highlighted:
Where agencies have been joined together to form even stronger entities with more capabilities, in order to meet the structural changes within the greater industry such as:
- Role of the traditional agencies is challenged
- Client disruption is happening
- Consultant companies are making inroads eg Accenture buying Droga5 and Shackleton in the last week are good examples
- The rise and rise of Facebook, Google, Alibaba and Amazon
- Trust has become paramount
WPP has, for the first time, positioned itself as a creative transformation company, rather than a holding group. It has developed a values proposition that previously didn’t exist, and the hierarchical approach has been replaced by a younger, flatter structure. We heard from the leaders of Wunderman Thompson North America and Essence (a digital media and TV agency with offices around the world and clients mainly in the data space such as Google).
- Wunderman Thompson told us about its deliberate growth in expertise around Amazon and what it can offer for clients.
- Essence talked about the six ways it believes that it makes advertising more valuable to the world:
- Data and analytics
- Developing an ethical web
- Scale creates better advertising experiences
- Embedded collaborative teams
- Augmented intelligence
WPP concluded the session by reminding us that it wants to spend less time in meetings and monotonous routine, and more time on creativity, big questions and big opportunities. Contracts with clients should be output- and outcomes-based, rather than time-based. A refreshing restart!
Pitching and rules of engagement
Workshop hosted by Fred & Farid with input from AAR Group
We then moved on to Fred & Farid’s new premises in Los Angeles (another independent agency micro-network), where we had a workshop session with several different agency leaders and the intermediary consultants. It was all about pitching and what clients are looking for, when they go through a pitch process. There were some extremely helpful inputs from the AAR Group.
There’s an overall sense that clients don’t really understand what goes into a pitch from an agency perspective, not just the financial aspect but also the emotional aspect — the hope — and there were some excellent tips on how agencies can improve their hit rates, based on research conducted among 40 CMOs in the UK by the AAR Group.
Definitely a highlight — this is a multicultural independent agency network in eight locations. It is an integrated digital agency with 270 people across offices in:
- Costa Rica
- Mexico City
- Santiago, Chile
- Buenos Aires, Argentina
- São Paulo, Brazil
- Bogota, Columbia
- Madrid, Spain
It positions itself as a new economy agency with new economy clients. which include Netflix, Spotify, Google and eBay. Circus is the lead agency for Spotify in all Spanish-speaking markets.
It talked about its transcultural vision, that it sees itself as a “big tent” for “misfits that do not fit into a traditional agency”. We saw work for Netflix, Spotify, and Northgate Market, where the production budget was minute but the work achieved a 12% sales increase over the Superbowl weekend.
Five reasons to choose Circus:
- Fully integrated
- Value for money
- Emotions driven by data
Our final agency of the day was The Many, another independent agency with offices in Los Angeles — we were shown their new beautiful spot in Malibu — and shortly opening in Boston, with 92 employees and very focused in social media, branded content and, of course, television. It has found a sweet spot for clients with budgets between US$3m and US$30m and shared some excellent case studies with us, as well as its optimism and openness that seem to typify these agencies in California.
The end of a great day on Day 1 and it was off to bed as I saw emails coming in from South Africa — we are nine hours behind all of you this week.
- #AdForumSummit LA: Film, branded content growth now exponential
- #AdForumSummit LA: Clients wants media back in creative agencies
- #AdForumSummit LA: New industry player to change things up
- #AdForumSummit LA: Focus on content & collaboration
- AdForum Summit – Johanna McDowell
- AdForum Worldwide Summit LA: How to win the convergence race
Johanna McDowell (@jomcdowell) is managing director of the Independent Agency Search and Selection Company (IAS), which is partnered with the AAR Group in the UK. She will be presenting detailed and in-depth reports and case studies on each agency from this 2019 AdForum Summit at her masterclass presentation in Johannesburg in May.
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