the holding company disruptors. today, there is disruption nearly everywhere. except one place…
TRANSCRIPT
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The holding company disruptors
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Today, there is disruption nearly everywhere.
Except one place…
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Holding Company, Inc.
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Only 10 of the 37 highest paid ad executives are “practitioners” who add value to clients
RANK
NAME COMPANY SALARY
1 Martin Sorrell WPP Group (CEO) $27mm
2 Maurice Levy Publicis Group (CEO) $24.4mm
3 John Wren Omnicom (CEO) $14.8mm
4 Paul Richardson WPP (Finance Director) $12.4mm
5 Randall Weisenburger Omnicom (CFO) $10.6mm
6 Michael Roth Interpublic Group (CEO) $9.7mm
7 Miles Nadal MDC Partners (CEO) $9.3mm
8 Alan Herrick Sapient (CEO) $6mm
9 Kevin Roberts Saatchi & Saatchi (CEO) $4.5mm
10 Alfonso Rodes Castane Havas Worldwide (Global Media CEO) $4.2mm
11 David Jones Havas Worldwide (CEO) $4mm
12 Frank Mergenthaler Interpublic (CFO) $3.8mm
13 Mark Read WPP Digital (CEO) $3.4mm
14 Philippe Krakowsky Interpublic Group (EVP/ Strategy & Talent Officer)
$3.3mm
15 Jack Klues Vivaki (CEO) $3.1mm
16 Vincent Bollore Havas Worldwide (Chairman of the Board) $2.3mm
17 Mercedes Erra Havas (Board Member/ Founder of BETC Euro RSCG)
$2.2mm
18 Philip Angelastro Omnicom (SVP Finance) $2.1mm
19 Christian Overshohl SapientNitro (Managing Director Asia Pacific)
$2.1mm
RANK NAME COMPANY SALARY
20 Andrew Bonzani Interpublic (Senior VP General Counsel & Secretary)
$2.1mm
21 Jean- Yves Naouri Publicis (COO) $2mm
22 Alan Wexler SapientNitro (Managing Director North America & Europe)
$1.7mm
23 Michael O’Brien Omnicom (General Counsel) $1.7mm
24 Joseph Tibbetts Sapient (CFO) $1.5mm
25 Leopoldo Rodes Castane
Havas (Board Member) $1.5mm
26 Harry Register Sapient Global Markets (Managing Director) $1.3mm
27 Christopher Carroll Interpublic Group (SVP Controller/ Chief Accounting Officer
$1.2mm
28 Jacques Seguela Havas Worldwide (Chief Creative Officer) $1.2mm
29 Dennis Hewitt Omnicom (Treasurer) $1.2mm
30 Jean-Michael Etienne Publicis (CFO) $1.2mm
31 Jean de Yturbe Havasworldwide (Chief Development Officer) $875k
32 Stephen Pustil MDC Partners (Vice Chairman) $873k
33 Michael Sabatino MDC Partners (Chief Accounting Officer) $826k
34 Mitchell Gendel MDC Partners (General Counsel) $810k
35 Herve Philippe Havas Worldwide (CFO) $763k
36 David Bolt MDC Partners (CFO) $714k
37 Yannik Ballore Havas Worldwide (Managing Director/ Deputy CEO)
$544k
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The Score
Shareholders
27
Clients 10
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The real issue for agencies: A 25 year downward spiral
Lower fees
Lower talent
Lower value
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We haven’t helped ourselves
Agencies• Keep clients• Make numbers• Do what’s asked
Consultants• Deliver value• Measurable
results• Lead Clients
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The coffee bean problem
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The procurement - marketers gap
*Data provided by Michael Farmer, Ex- Bain Consultant
FeesDecreasing 2.2% every year due to
pressure from procurement
DeliverablesIncreasing 2.3% every year due to need for more digital content
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Pro
cure
ment W
all S
treet
CheatReduce Quality
The real impact is on talent
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The talent drain
STARTING SALARIES
Agencies $35,000
Google, Facebook, Twitter $65,000 + signing/ year end bonus guaranteed
SALARY MULTIPLES
Agencies 2.2 - 2.4x
Consulting 4 - 6x
(Both go through procurement)
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70% of agency talent is looking for a job
Therefore… only 3 out of 10 are NOT checked out
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Only a new model can close the gap
Procurement Marketers
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AdLand
Who are the heirs to the throne?
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1. Managing marketing complexity: the marketing systems integrator
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2. Tech stack of record (TOR) replaces agency of record (AOR) as the foundation
CONTENT + SOCIAL
PROGRAMMATIC MEDIA
DATA + ANALYTICS
LEAD MANAGEMENT
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3. One more idea… Talent
Traditional holding companies aggregated agencies @ scale by acquiring them
Is there another way to aggregate talent?
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The largest taxi company owns no cars
The largest hotelier owns no hotel rooms
The largest media company owns no content
Now, there’s a global marketing services holding company that owns no agencies
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You don’t need to own the cow to enjoy the milk
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Traditional vs. “virtual” holding company
Tech Partners
Expensive Freelance
Owned Agencies
Finance +Big Buildings
IndependentAgencies
Flex StaffTech
Embedded
Crowdsource
Strategy +Resource
Mgmt
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The model
You don’t need to make everything yourself
Curate + craft vs. create
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“The smartest people in the world don’t work for
you” - Bill Joy
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Speaking of talent…
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Why are so many people willing to wait tables in Hollywood?
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No one dreams of becoming a Hollywood extra
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We must fix the compensation structure
FTE DELIVERABLES ROI
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FTE ROI
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FTE ROI
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FTE ROI
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We must focus on high value delivery
High value
delivery
Higher fees
Better talent
100% certainty: The client will not start this process
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So where do we get the money?
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The future of holding companies is very much in doubt
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As for agencies…
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“Agencies are the cockroaches of the business world” -Rishad Tobaccowala
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Or, if we can fix it…
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