Does Ben Lilley's McCann Australia acquisition point to a "franchise" model in adland?
Last week it was revealed former McCann Australia CEO Ben Lilley would be returning to the agency he exited two years prior, acquiring his former creative home from holding group IPG - but remaining a McCann Worldgroup affiliate business partner and retaining access to its tools and clients. Is the move a one off, or are witnessing the rise of the franchise model in advertising?
Things had got stale...
"It was one of those 'what have I got to lose moments'" says Lilley of his return to Australia and the agency he now once more helms.
He's lost none of the competitive spirit for which creative agencies are famed.
"The Australian creative agency landscape was starting to look pretty uninspiring and I thought there was a clear opportunity for a more dynamic creative offering to take shape here. One that could much better cater to Australian clients," posits Lilley.
"There’d been a lot of change at McCann Australia last year in particular. And having seen IPG divest McCann Health in Australia in 2017, I figured they may now also be open to divesting McCann Australia. I also thought that if I could return to McCann Australia as not just the CEO but the owner, I could help it evolve more rapidly to take advantage of this malaise that the Australian industry seems to be in right now."
One of the major changes to the business included the defection of then DDB Sydney CEO Nicole Taylor, who took over in April 2018, only to return to the DDB network eight months later, relocating to Barcelona.
The agency has also dealt with a series of high profile exits including chief creative officer Darren Spiller, who departed late last year after eight months with the agency. More recently, Sydney managing director Hazelle Klønhammer and chief strategy officer Fran Clayton also departed.
This is advertising - sometimes things don't work out and nobody can be blamed for seeking other opportunities. As such, Lilley says there is no rush to re-invent the wheel and says it is business as usual when it comes to day-to-day agency operations. While the trade press and media-marketing industries treat The New Model as if it were the Holy Grail, Lilley argues that agencies are trying too hard to quickly reinvent themselves.
As such, McCann will continue to work closely with its international network and focus on its integrated offering, something Lilley backs himself to grow.
"McCann Australia is a full-service creative agency and will continue to operate that way. I’ve seen other creative agencies try to reinvent themselves with radical new models, structures and philosophies and I don’t think that’s what our clients want or need," he argues.
"It’s about being the very best integrated creative agency we can be, and developing the most creative and effective work we possibly can for each and every client. That was our sole focus when I last took over McCann Australia in 2011. It delivered record results for both our clients and our own business then. And I’m pretty confident it will again now."
IPG alignment and the Mediabrands mix
IPG Mediabrands APAC boss Leigh Terry told Mi3 earlier this year that the media division of the holding group would be working more closely with all of its agencies in 2020, as the business continues to align with global CEO Michael Roth's 'Open Architecture' approach.
Terry reaffirmed this adding that the change in ownership for McCann will not impact the relationship between the creative and media offerings, as the two will continue to work together when necessary, particularly as the Australian business remains tapped into the holding group's global capabilities.
"An open architecture model allows for a fully-integrated offering across various disciplines from creative to media to digital to experiential, that is the approach we are taking globally and will be something of greater focus in 2020, not just through media, data and tech but also with our creative partners, including McCann," Terry says.
Discussions are underway between Terry and Lilley about how the two can work together more closely and collaboratively in Australia.
"He’s excited about what we’re doing in Australia and is already a great supporter," says Lilley. "We’ll also be working just as closely, in fact I would expect even more closely, with the rest of McCann Worldgroup."
The emergence of Australia's franchise model?
Marketing consultancy Mutiny co-founder and partner Henry Innis believes the change in ownership might just be the most innovative new agency model to come out of holding groups in a while. He thinks it could solve a global challenge: Holding group acquires innovator, innovator takes the money and leaves; a universal problem, particularly in a creative industry where people are the primary asset.
"There are other models people are starting to pioneer. WPP’s tech-driven model of the future, which aims to harmonise the tech stacks and approach across the group, is one clever model - Xaxis was just the start here," Innis says. "Another is the BrandTech model pioneered by You & Mr Jones, which focuses on unlocking value from networks and automating large chunks of the model over time."
However, he says agencies seem to have long ignored one model that actually works quite well elsewhere — the franchise model.
He argues McDonald's and other businesses have long built themselves on giving smaller entrepreneurs a chance to licence their name, resources and supply chains in exchange for entrepreneurs operating their local markets effectively and profitably.
"Why hasn’t anyone done the same thing for creative agencies? You can see it now. A strong positioning, with creative entrepreneurs across the globe making it a reality for local clients," Innis says. "You get a leaner global team who are paid to win the global pitches. And ultimately, more profitability for the parent company who no longer has to deal with problem regions and offices."
Autonomy (mostly) and skin in the game. Who knows, it just might work.