Integrated Value Proposition

How do the clients look at the integrated solution of S4?

They want access to all your resources, in a seamless fashion.

But what about if I’ve got a competitor that’s working with you?

You can sort that out. You can have separate organizations. Because of the procurement pressure that clients put on the agencies, I think that’s put the clients in a much more difficult position to demand exclusiveness and it has made it much more difficult to enforce. Because of the conflict, the frenemy – the situation that you see increasingly, where whoever was your competitor becomes your friend – there are so many frenemy situations, particularly with digital transformation, that the competitive lines become blurred. There are always the bananas conflicts, as we call them. Bill Phillips, at Ogilvy, used to say that there are bananas conflicts, by which he meant, when you told one client about another, they went bananas. There is always that emotional conflict, for which you may have to have separate organizations.

By and large, that friction has diminished and what clients want is access to the best. McKinsey don’t go through that; Goldman don’t go through that. They don’t have to set up separate organizations. Sometimes they might have to have different teams, within the same brand, but they manage to get away with it. You’ve had some classic cases with those uni-brands, where they’ve been advising one client and, a year later, they pop up the other side, in an M&A deal and that causes a bit of friction. But by and large, it is accepted.

The reason it is accepted comes back to your margin question. If what you do is so good and so valuable, firstly, you get an increased margin and secondly, they want to work with you.

But back in the day, with holding companies, it was an issue because you didn’t want the creative side to be the same as your competitor’s. For example, if I was working with WPP and I’m Unilever, I wouldn’t want Procter to work with the same agency?

Yes, but when we bought Grey, I had a big conversation with Unilever as to whether that was acceptable and vice versa, with Procter, as to whether it was acceptable to them. It turned out to be acceptable because we had separate organizations. I think, today, that friction is less. Maybe between Unilever and Proctor & Gamble, it’s a bananas conflict, but you can often handle it. You may not have the global brand; you may have regional brands, so you might work for Procter in Asia and Unilever in South America. I’m not ducking the issue as I think there is an issue there, but you can handle it and you can make various different locations secure and different organizations secure.