Dell & WPP: The End of Holding Companies?
December 4, 2007
WPP Group CEO Martin Sorrell (image cred)
We’ve been thinking a lot about the Dell/WPP Group deal and what it means for the future of integrated communications. Just the sheer size of the project: $4.5 billion and over 1,000 employees is almost unfathomable. However, as we scanned through commentary on the web, or lack thereof, we were intrigued by this post on the O’Dwyer PR blog, which referenced Dell’s announcement and then said:
Bank of America may soon nail another coffin in the holding company structure. Its contract with Omnicom expires March 31. BoA has put some of OMC’s media-buying responsibilities up for review because it no longer wants to be held hostage to Omnicom’s shops.
The holding company structure is bound to unravel in `08. That will create big opportunities for nimble PR firms.
Then this got us back to thinking about a post from Jeremy Pepper back in October where he wrote:
The reality is that the holding companies do not care who gets the cash. It’s money in pocket and bottom line, and if advertising can get bigger bucks for campaigns, it’s better to go to advertising.
While Pepper’s post was in a different context – he was arguing that ad folk now how to sell themselves better and therefore can get bigger budgets than their PR counterparts – the theme relates to Dell/WPP.
Is an advantage of creating your own agency that hopefully you will eliminate some of the infighting between different groups within a holding company? And if so, do you agree with Kevin McCauley of O’Dwyers that one of the big trends of 2008 will be the decline of the holding company model?