What WPP aims to achieve from yet another merger after two 'failed' attempts

On a bittersweet note, the venerable Thompson agency, with around 160 years of history, has said its final goodbyes, as the name will cease to exist with its merger with a relatively youthful 30-year-old VML brand.

The creation of VML has led to the death of three iconic agency brands - JWT, Wunderman and Y&R.

While the top Indian creative leaders mourn the death of the oldest and largest creative agency brand – JWT, the agency’s old-timer Bobby Pawar gave a creative ode.

Bobby Pawar

“I don't know about the pundits, but the punsters should certainly have a field day with this merger. 'Where did Thompson disappear to? I wonder man.' 'What happened when VML entered the room? Thompson, Wunderman and Young left and Rubicame.' We could go and on,” he said.

“Alas, the same is not true of two legendary agencies, and one whatever. I guess sacrifices need to be made in the name of progress. But hey if the point of this merger was just scale, then this battle will be lost before it is begun. Technology is going to redefine scale. It will no longer mean how many people you have or how many offices. It will have to be about the scale of thinking, the greater the better,” Pawar added.

This transition, while emotional for the advertising industry, especially for those who have worked at the legacy agency brand J. Walter Thompson, aligns with WPP's strategic vision of creating global mega-agencies with unparalleled influence.

With VMLY&R and Wunderman Thompson’s merger, both born from mergers five years ago, WPP claimed to create the world’s largest creative powerhouse, housing over 30,000 employees and combining brand experience, customer experience, and commerce.

Justifying the move, WPP Chief Mark Read said, “Marketers today expect seamless links between their brand advertising and technology solutions and platforms. VML provides an immediate solution to this business imperative.”

Varun Duggirala

Varun Duggirala, who sold his digital agency Glitch to WPP in early 2018, which was later merged into VMLY&R, and sometime later he exited the company, said, “Creating VML is pretty much in line with the strategy towards integration and simplification of the business to drive seamless solutions for brands that Mark Read laid out when he took over as global CEO of WPP. I also have deep respect for Jon Cook as a leader, so no one is better to drive this combined entity."

While the larger picture for WPP is in line with the survival of the fittest, questions are being raised about the failed mergers of Wunderman with JWT and VML with Y&R.

Several Indian industry stalwarts told BestMediaInfo.com that the recent move appeared to be yet another experiment as it established that the two mergers in the last five years didn’t yield the desired results.

Rohit Ohri

Having spent 22 years at JWT, Rohit Ohri, now FCB Global Partner, calls Wunderman Thompson, erstwhile J. Walter Thompson, the ‘University of Advertising’. He recalled that the agency has produced some of the best advertising brains in our industry.

Some of the industry’s best minds that have come out of this ‘University of Advertising’ are Alyque Padamsee, Piyush Pandey, Prasoon Joshi, Sonal Dabral, R. Balki, Arvind Sharma, Sam Balsara, Srinivasan K. Swamy, Josy Paul, Mohammed Khan, Ranjan Kapur, Ravi Deshpande, Swati Bhattacharya, and Anuja Chauhan.

“JWT has played a significant role in shaping not only my advertising career but also those of countless individuals who are now the face of the Indian advertising industry. Back in our JWT days, we often remarked that J. Walter Thompson was an institution with enduring power. Individuals may come and go, but the brand JWT will last forever. This belief held true despite some prominent departures from JWT. People understood that the agency's strength lay not in any single individual but in the collective genius that built it. It wouldn't be an exaggeration to state that practically every influential figure in the advertising industry today can trace their roots back to the JWT College of Advertising,” said Ohri.

Swati Bhattacharya

Swati Bhattacharya, Creative Chairperson, FCB India, who spent the first 22 years of her advertising career at JWT, termed it the end of an era.

“A part of my heart will permanently be broken. It was like my school, campus, and the place where I grew up. JWT Delhi has a huge part of my head and heart,” she said.

Tarun Rai

An emotional Tarun Rai, the former executive director, strategic initiatives at Wunderman Thompson APAC, who spent 30 years of his life at JWT, said, “From a young account executive who joined Hindustan Thompson to becoming the CEO of J Walter Thompson to leading the merger with Wunderman and heading Wunderman Thompson, I have been a proud Thompsonite for three decades. So, it’s rather emotional for me to hear that Thompson, the brand, will no longer be around."

Colvyn Harris

Colvyn Harris, who dedicated four decades of his career to the advertising industry, with the majority of that time spent at JWT, called it a sombre day for people who came of age within JWT.

“Now it’s the question of when the memories will last, and so will JWT. Brands will continue relying on their agency partner, but obliterating the Thompson name, which was iconic in its own right, was not a good move. At least, reminiscence of the cache of Wunderman and Thompson was there in Wunderman Thompson, which is extremely valuable globally. But again, if WT was working perfectly, why would you erase it?"

With this merger, WPP has wiped out this historic brand. Consequently, FCB, or Foote Cone & Belding, which is celebrating its 150th anniversary this year, now assumes the mantle of the world's oldest advertising agency still in operation.

“In this world of advertising and marketing, where we are the experts in creating and nurturing brands, it appears paradoxical that oftentimes we struggle to safeguard our very own agency brands,” Ohri quipped.

Sanjeev Bhargava

Sanjeev Bhargava, who spent a total of nine years at the agency in two stints and was the Managing Partner and Head of JWT Delhi in his last role in 2016, believes that the Wunderman Thompson and VMLY&R merger is yet another attempt by WPP to salvage a once flourishing organisation.

“The advertising behemoth was caught napping as technology crept up upon them. I do believe that the large size of JWT led to complacency, which has proven to be fatal for the company. A series of acquisitions of digital marketing companies by a leadership that had no clear idea of where to go with them was the first reaction. Acquisitions that could never be seamlessly integrated into the mainstream and therefore remained ineffective from the larger perspective," Bhargava said.

What went wrong with the JWT-Wunderman merger?

After JWT’s merger with the global digital agency Wunderman in 2018 to create Wunderman Thompson (WT) in India, the agency underwent a transformation.

Numerous critics expressed the opinion that it lost its way post-merger and struggled to strike a harmonious balance between its digital and traditional advertising approaches.

The overarching objective of the merger was to steer JWT India towards a more digitally adept future. Paradoxically, this decision appeared to sow discord internally, resulting not only in the departure of crucial talent but also in the loss of certain clients.

Harris said Wunderman Thompson was meted with a step-child treatment.

He said, “Every year, you get a new parent. It’s a whole track of motherless children. Even for clients, it has been so confusing. They don’t know your real parents, the children, or what the agency’s third parents taught, which the first and second parents did not.”

“While there is a whole new digital world, nothing prevented J. Walter Thompson from being meaningfully relevant. The agency should have continued to adapt to the changing times,” added Harris.

Bhargava said, “A company (Wunderman) that knew the digital business perhaps had no idea how to manage relationships and expectations from the large businesses that JWT boasted of. The basic identity of a creative agency was challenged by digital-first leadership, and no attempt was apparently made to synergise the two strengths."

What’s wrong with the latest merger?

Bhargava opined that this merger (WTxVMLY&R) is the final attempt to get back to a respectable size and attempt to salvage the remaining businesses. For the record, in the same year, WPP merged creative shop Young & Rubicam with digital ad firm VML to form VMLY&R.

Harris shared that this merger and formation of VML is a story about somebody who thinks he knows the best. Remembering a Friday evening WPP leadership meeting in New York in 2008, Harris said, “That time, a few executives from Lehman Brothers were giving us ‘Gyan’ (knowledge) on future-proofing the agency model. The irony is that, two days later, we got to know that Lehman got shut down."

An ad veteran who didn’t want to be quoted said, “Even if the brand was struggling at this point in time, the idea should’ve been to figure out what the problem is and find ways to fix it because any brand, be it big or small, goes through its fair share of ups and downs in its lifecycle. The focus could’ve been on bringing back relevance or building new capabilities and regenerating the brand versus killing it because an agency’s purpose is to build brands that last forever, and that's upon the leaders who are leading, guiding, and managing these brands. It's a sign of total failure when you destroy the brand.”

The big merger impact

Post-merger, to align the leaders of both WT and VMLY&R, one could expect a lot of shakeups. Although it would be a wait-and-watch situation for mid- and junior-level roles, as per experts.

“The obvious strategy at play here is to cut the cost versus rebuild the brand. The biggest cost is talent. For that, the agency will have to reduce its manpower strength. Having said that, the core strategy cannot be to collapse 5–6 entities to figure out how to convert the loss into profit. On top of it, the sticky part of any agency today is its culture, and if you keep evolving the culture from one agency to the next, that is not the right approach,” said an advertising leader.

In an interview with the Wall Street Journal, when asked whether the merger would result in job cuts, Read said, “The move is designed to help VML invest more in areas such as creativity, strategy, and technology. Some of that will likely come at the expense of non-client-facing capability, but it’s really about investing the resources we have in what matters to clients."

A senior WPP leader in India on the condition of anonymity said, “WPP has done this in the past and ensured to make people feel like they belonged, which is the biggest thing one can do.”

Another ad executive pointed out that repetitive mergers, changes, and rebranding might also weaken the brands’ faith in the agency because if an agency cannot build its own brand, how will it build other brands?

An advertising leader pointed out that such mergers are not just happening at WPP. Even Publicis, IPG, Havas, and Omnicom are doing the same thing. It points in the direction in which the industry is moving.

“Last I heard was Omnicom bringing together its agencies under one umbrella, Omnicom Advertising Agencies. It’s not about running individual brands but getting the best synergies for the client’s benefit. We have endeavoured towards creating best-in-class work in the new era. Either you can be a dinosaur and sit in your comfort zone or evolve,” she said.

A senior creative leader, who has been observing WT and VMLY&R quite closely, thinks creating VML out of both agencies is for the good.

He explained, “Globally, both VMLY&R and Wunderman Thompson are heading in the same direction: going big on commerce, innovation, and technology. Not only are they both moving in the same direction, but they also bring to the table their respective strengths. VML brings digital-first thinking; Wunderman in India is good at creating big ideas. This makes them complementary and should help minimise duplication of roles and capabilities. Combining both their strengths and uniqueness, there’s no greater force.”

Another creative leader pointed out that while there is enough hue and cry about killing the three agency brands, VML has tremendous equity, and it’s pointing in the direction that the marketing world is taking.

“The alternate could have been VMLY&R WT, but using VML points to simplicity, streamlines, and gives a clear direction of what we want to be,” she said.

Having spent 33 years in the A&M space, Bhargava shared words of wisdom: “Companies that have remained focused on their core competencies of strategically sound creative communication have continued to thrive. Ogilvy, McCann, and Lintas are examples of companies that have stuck to knitting while incorporating the new skills required to remain relevant to the new marketing demands. Let us hope that the new merger will learn something from them.”

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