MEC and Maxus, Mergers and Closures

First this is pretty unusual amp160I don39t recall another global merger of this significance within the media agency market amp160The new entity will be GroupM39s largest agency amp160GroupM39s new CEO Kelly Clark has decided he can live with three integrated agency networks surely three is sufficient plus one digitalfirst agency that will be built into a credible networkAs MEC and Maxus have not been altogether unsuccessful one key reason for the merger must be to save money as margins tighten which suggests that the issues raised by many commentators as to the source of media agency revenues have some credenceIn a world of greater transparency more informed advertisers and greater pressure from trade bodies the days of huge media agency margins bolstered by rebates kickbacks and the rest are indeed numberedThen there39s what this tells us about GroupM39s approach to specialization versus integration amp160It makes no sense to have multiple suppliers of specialist services when you can have one centeramp160of excellence something GroupM recognized when they launched Gain Theory in 2015 as a mechanism for pooling the group39s marketing science capabilitiesEssence is by all accounts a firstclass digital agency but these days is it right to see quotdigitalquotamp160as a specialized service requiring a digitalfirst agency or is it simply a part of what every media agency and indeed client doesFor strongly digital businesses Essence is no doubt a good fit Can MediaCom Mindshare or the unnamed newco not offer the same skills to more quotmixed economyquotamp160advertisers amp160They would counter that they can and inhouse at thatWhere you draw the line between specialism and execution is interesting amp160For example imagine the fuss if the execution of TV buying had ever been removed from Mindshare and placed into GroupM as an adjunct to their role as group tradersLinking planning and buying has become a hot topic with many believing that traders have ridden roughshod over the needs of their clients as defined by their plansIt is possible that Essence is going to become a central digital deal maker and additional revenue generator across the group which would suggest some loss of control and revenue from within the established networks amp160Plus the agency would seem to be a suitable home for the new mPlatform amp160Whatever the thinking the building up of Essence would appear to be a move towards specialization whileamp160others Havas and Publicis amongst them favor a model based around greater integration amp160Indeed Publicis Media has just won Procter39s EMEA business on what looks suspiciously like an oldstyle fullservice agency model amp160There39s also the ongoing integration of Sapient which speaks to a onestopshop solution over the quotfight nicelyquotamp160approach favored by WPPMaybe what this differentiation is exposing is the degree to which the different holding companies can truly integrate their component offerings and are able to cast aside their separate PampampL39s to serve client needs none of which will be of much comfort to the staff at MEC and Maxus nor indeed to their many clients who are facing greater or lesser degrees of disruption to their livesWith uncertainty comes a lack of internal focus leading eventually to reviews amp160Stand by for the independent agencies to prosper as advertisers tire of all this coming and going and decide that really what they want is an agency that puts their needs first and foremostClick the social buttons above or below to share this story with your friends and colleaguesThe opinions and points of view expressed in this content are exclusively the views of the author andor subjects and do not necessarily represent the views of MediaVillagecomMyersBizNet Inc management or associated writersamp160

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MEC and Maxus, Mergers and Closures

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Brian Jacobs

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