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LEWIS

By

TEAM LEWIS

Published on

January 26, 2024

Tags

integration, merger

So, the famous names of Hill, Knowlton, Cohn and Wolfe are to disappear. Sic transit gloria mundi. Don Knowlton died in 1976. John Hill died in 1977. Norman Wolfe died in 2014. Harold Burson died in 2020. Bob Cohn died in 2023. But Harold’s name alone will live on atop one of the world’s biggest PR agencies. What will it mean? What will it stand for? Does it even matter when it is so big? As Stalin said: “Quantity has a quality all its own.”

What are the good things you love because they are ‘Big’? Big Pharma? Big Food? Big Agriculture? Big Sugar? Big Oil? Big Government?

To everything there is a season. It used to be acquisitions. Now it is mergers. WPP is the name behind the famous brands. It will now have one of the largest PR companies in the world. It is the first really big merger in PR. It is doubtful it will be the last. What does it mean?

On March 1, 1971, WPP was born. It was Sir Martin Sorrell’s creation. The Saatchi & Saatchi Group Finance Director bought a company called, Wire and Plastic Products. Literally a shopping trolley company. Into this basket he placed company after company over decades. It was an acquisition spree like no other. The basket multiples were always more than those of the inputs. Financial alchemy flourished. The benefits of brand mergers were always so much less than the arbitrage, so no-one bothered to integrate them. The end result was not really a single agency. More a butterfly collection. Pinned. Separate.

But now comes the time for integration. Much thought and planning will have gone into this. These things are tricky. Time consuming. Care will have been invested to get it right. But we must ask of this merger, what benefits does ‘Big’ bring? And cui bono?

Does it benefit staff? Will they be happier? Will they gain greater resources? Will they be more confident in their role? Will they gain greater opportunities? Will they have greater freedoms and flexibilities? Or will this bring fear?

Does it benefit clients? Will they find themselves now working alongside competitors? The advantage of multiple brands is the ability to handle conflicts. WPP consolidation may leave the new agency with odd bedfellows. Will they get better value for money? Will they get better advice? Will they be able to go further, faster?

Does it benefit the industry? It is in huge flux at present. Revenues are down. The flexibility of the digital revolution has been found to be a two-edged sword. Great when it goes up. But off like flicking a switch. Ask the remarkable Sir Martin. His latest venture S4, has had a torrid time. Will Burson train and invest more?

Does it benefit WPP shareholders? Will it boost profits? What was the primary reason for this merger? Will it save costs? Will it remove duplicate jobs? Or is it a response to a contracting market? Is it mainly a financial move?

I don’t know the answer to these questions. What I do know is that finance is like fire. It is a good servant, but an evil master. If big, bigger biggest means good, better, best, then great. It will be something for all of us to aspire to. I hope for all involved that it will.

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