Who owns whom?

It's not easy keeping up to date with which agency is owned by which international affiliate, or which big agency spawns other, smaller ones. The industry is far more incestuous than it ever was before.

This is a typical cycle:

Agency ABC does great work for a major motor company. It wins awards, hires more staff at good salaries, provides great dividends for its owners, the chairman gets a new helicopter and everyone's jolly – including the client, who's now selling more cars in the local market (employing more people etc. etc.)
Meanwhile, conglomerate WBE (“We Buy Everyone”) is watching ABC's performance and begins courting them.

They fly the local management to New York, have some super-luxurious entertainment and casually discuss the possibility of a “merger”.

© Samart Boonyang – 123RF.com

Eventually WBE puts in an offer to “bring ABC into the WBE stable” – which actually means it's not a “merger” at all. It's a simple takeover and, ultimately the local management will have to increase its dues to New York by a minimum of 20% each year – either by expansion (getting new business) or cutting costs (firing staff and selling the helicopter – unless the chairman's been smart and moved his assets out of the agency).

However, somewhere along the line, the creative director is forgotten. He's the one who wrote all those great ads and who, ultimately, won the agency all those awards and trophies, yet nobody thought to even offer him a new bicycle.

So he leaves ABC, together with the client service team and starts a new agency called XYZ. They set themselves on the moral high ground and declare “we'll never be like ABC – ever. We're in it for the creative challenge, not the money.” Hmm yes, we'll see about that.

Their first call, obviously, is to the big car client.

Now the client is not happy with the new ABC agency but his masters in Detroit insist that he continues to use someone from the WBE conglomerate. So there's nothing he can do – until sales start to decline.

Eventually, the local client gets his own way and fires ABC, hiring XYZ in the same day. The client's happy because he's getting great ads again and sales start going up. WBE is not quite as happy but, with the rand decline, who really cares?

ABC is extremely unhappy because they've lost their biggest client, WBE is putting them under pressure to deliver an increased revenue of 20% each year, so they're reducing staff and asking themselves “what went wrong”?

Then it all repeats itself.

The XYZ directors are eventually seduced by another conglomerate and they get loads of dividends and the creative director has the opportunity to buy the helicopter that the chairman of ABC once owned. They employ more people and they're all happy.

They start delegating because the rising stars in the agency are winning more awards. They get lazy and complacent.

Then the new creative director at XYZ feels left out of things (as the original founders did) and leaves, starting his own agency.

You know what happens next, so can finish this story yourself...

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