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Giant Advertising Agency Is Betting That Smaller May Be Better

The largest agency holding group in advertising is seeking to revive its smallest agency network, United Network, in an effort to offer marketers a smaller and more creatively focused alternative to large, mega advertising firms.  WPP has announced the appointment of Matt Ryan, who most recently held senior posts at Havas Worldwide New York, as the new United Networks global chief executive.

The idea behind a smaller agency network is that it can be more nimble, and its principals can pay more attention to each client. Also, not every marketer needs a giant agency with scores of offices around the world staffed by phalanxes of executives. “Part of our armory at WPP is to have networks with various structures and various appeals,” Martin Sorrell, chief executive of WPP, said. “There’s a segment of the market where clients want smaller networks, micro-networks, mini-networks. It makes sense for us to have a network like this.”  The eight offices that currently make up the United Network are in London, Madrid, Milan, New York, Oslo, Paris, Seattle and Antwerp, Belgium. They work for blue-chip marketers like AstraZeneca, Capital One, Coca-Cola, Ikea, Procter & Gamble, Red Bull, Visa and Vodafone.

The move by WPP to offer a downsized alternative to the mega agency networks comes after French advertising giant Publicis and its American rival Omnicom announced last August that the two firms were merging to create the world’s biggest advertising company, Publicis Omnicom Group.  That merger displaced WPP as the world’s largest agency holding group and spawned some industry professionals to express their concerns over the risk of potential client conflicts of interest and the likelihood of unrealized efficiencies of such mega organizations.

The future of small agencies may be a bit brighter due in part to giant, behemoth conglomerates who are motivated to leverage the relationships, investments and proprietary trading desks of their parent companies. The best innovation and creative ideas usually flow from smaller organizations whose growth projections are more focused on deliverable value and creativity.  Big is always bigger but is not always better and smaller, more creative, nimble and flexible agencies will likely find their niche.

Mr. Ryan said he believed that the United Network could use agencies in the Asia-Pacific, Eastern Europe and Latin America regions, although he added, “It would be a big move if we went to 12 or 15” offices in total.  Asked for a time frame for revitalizing the United Network, Mr. Ryan suggested it would be “12, 18, 24 months” before big returns would be obvious.   Mr. Sorrell said the effort to revive the United Network was “independent of” and unrelated to the merger of giant Publicis and Omnicom.

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