Billion dollar man: MediaCom and Essence in global merger, Pat Crowley helms 550-strong local unit; says no job cuts, no conflict worries
Christian Juhl's GroupM overhaul continues with the global CEO wrapping MediaCom into his former charge Essence, the new breed agency that even Sir Martin Sorrell admits he'd like to buy. Locally Pat Crowley will lead EssenceMediaCom, a billion dollar business with 550 staff. He and CEO Aimee Buchanan stress job cuts are not on the cards with "minimal" duplication, though which execs land key senior roles remains to be seen. They claim conflict is no big issue and rebuff suggestions brands may be confused by an old school dog-new school trick combination, pointing to Google and Mars, clients that already use both agencies having initially bought into the other. The rise of ad-funded Netflix disrupting TV is also a new jetstream for the old-new agency mashup.
What you need to know:
- Essence CEO Pat Crowley to lead new merged entity locally, MediaCom boss Yaron Farizon to take global EssenceMediaCom role out of London.
- "No job cuts ... not a cost cutting exercise ... no overnight team changes," Crowley and GroupM chief Aimee Buchanan tell Mi3.
- Client conflicts "minimal" and manageable.
- Google, Mars and NBCUniversal already globally buying both MediaCom and Essence, others will follow template, they state.
- "We won’t be forcing clients" of either agency into group trading model – Crowley.
GroupM’s overhaul under Christian Juhl continues with the global CEO wrapping MediaCom, a unit with $18bn billings and heavyweight legacy media buying capability into his former charge Essence, the new breed tech and data unit that Sir Martin Sorrell claims is the only coveted fiefdom of his former WPP kingdom.
Locally EssenceMediaCom creates a billion dollar entity, driving the lion’s share of GroupM’s circa $2.4bn in billings. Pat Crowley takes another step up to lead a 550-strong combined agency telling Mi3 he relishes the challenge and welcomes the additional firepower the merger puts at his disposal.
MediaCom CEO Yaron Farizon, who spent more than a decade with the business in Russia prior to taking the top job in Australia 12 months ago, will take on a global role out of London later this year to bed in and build out the new merged unit with global clients, but in the meantime staying to help manage the transition.
MediaCom's global boss Nick Lawson will become EssenceMediaCom Global CEO. Kyoko Matsushita, Essence Global CEO, has been promoted to WPP Japan CEO.
It’s not a cost-cutting exercise. The depth that I'm seeing in the MediaCom business fills all the gaps I had in my business yesterday.
Conflict is not what keeps me up at night. I don’t think it ever will be.
Buchanan and Crowley insisted conflict – historically the reason holding companies created numerous overlapping agency brands – poses no greater problem with one fewer GroupM business unit. But Crowley, who has handled the CommBank account for almost two decades, will be relieved that MediaCom has no bank on its books.
Essence counts the likes of Airbnb, Commonwealth Bank, Google, Isuzu, Ladbrokes, Lindt, Myer, Neds, nib, Snack Brands, and Tourism and Events Queensland as clients.
MediaCom Australia lists brands including American Airlines, Dell, DrinkWise, EY, Fonterra, Gumtree, Harley-Davidson, JD, KFC, Lavazza, Modibodi, NBCUniversal, Queensland, Southern Queensland and Deakin Universities, Reebok and Shell on its books.
Across those rosters, “conflict is minimal”, said Crowley. “But conflict is something we’ve dealt with throughout our careers. Things can fall out and things can fall in. It is about doing it the right way.”
Buchanan pointed to her former stomping ground at OMD by way of example.
“We had so much conflict within one brand, but it was different cities, different teams. Globally, three [GroupM] brands are still a significant amount [to handle brand conflicts]. Then if you think about some of the models that are being thrown around – which are client-specific models, not agency-specific models – there are different ways to skin that. So conflict is not what keeps me up at night. I don’t think it ever will be.”
She said the three remaining media agency brands also provide sufficient points of difference.
“From the top down, fewer stronger brands has been WPP’s strategy for a while. Locally, we are asked a lot what is the difference between the four agencies. This [merger] provides clarity,” Buchanan suggested.
“You've got the size and infrastructure of EssenceMediacom with digital, data and tech at the core. You have WaveMaker, which operates more in that challenger brand proposition, working with brands like JetStar to really push into challenging positions. Then you've got the strategic cornerstone of Mindshare, now setting up slightly differently under new leadership.”
Netflix has announced that we can start to buy eyeballs on its platform next year for AU people. I think most MediaCom clients will be thinking ‘great, I need to prepare for that future’.
Some might question the fit between an agency that, locally at least, was built on a legacy of tough negotiation and TV buying, and a new breed built for a digital world.
But Buchanan and Crowley think that is precisely why the two can be merged without creating a structural monster.
They point to Google, Mars and NCBUniversal, which globally use both Essence and MediaCom, having initially bought the services of one agency before the other, as proof that clients already seek both capabilities (though Google uses PHD locally, and not MediaCom).
Crowley added that any suggestion ‘older school’ MediaCom clients will be scratching their heads at the merger is misplaced, given where TV is headed.
“That assumption potentially undervalues what MediaCom clients want. Netflix has indicated that we can start to buy Australian eyeballs on its platform next year. Essence has the infrastructure and the smarts to begin to deliver what we all know is going to become a digital media ecosystem in the coming years,” said Crowley. “I think most MediaCom clients will be thinking ‘great, because I need that to prepare for that future’ ... That is the number one CMO question: what is my data-digital play of the future?”
Crowley in February told Mi3 he took the Essence top job only after assurances his Ikon clients would not be forced into GroupM’s group trading model. He said the same applies to the merged EssenceMediaCom approach: No brand will be forced into any buying model.
“There are some clients that like to work within group trading models, and there are some clients that aren’t right now. Today, I have a business that has the option to work in either. Next week I’ll have a bigger business that has the option to work in either,” said Crowley.
“That will remain and we won’t be forcing clients or shoehorning them into any solutions. Clients have signed up to something and our commitment is to deliver on what they have signed up to.”
Announcing the merger, GroupM also signalled further consolidation ahead as it brings its addressable programmatic, search, social and commerce businesses under GroupM Services, plus the likes of Xaxis, Finecast and Hogarth’s addressable content practice, into a single merged structure dubbed GroupMNexus. It is understood those changes are unlikely to land locally until mid 2023.
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