Holding Cos. To Clients: Trust Us For New Ideas

Advertisers’ search for new ideas is frequently a family affair these days, as clients invite their lead agency’s holding-company siblings to compete for assignments.

In many cases, the bigger clients have already largely placed their bets on a single holding company (Bank of America at Interpublic Group and PepsiCo at Omnicom Group, for example) and therefore can’t as easily hire an agency at a rival holding company. But that loyalty also affords them the clout to demand and receive more resources when needed.

“A client gets wrapped up in one holding company and becomes loyal to that company. In exchange for that, and because business is tougher, they expect to use all the resources of the holding company, including its other agencies,” said a source.

The most recent example is PepsiCo’s Diet Pepsi account, which has been at BBDO since 1964. This month, Pepsi reached out for creative ideas to two other Omnicom shops, DDB in New York and TBWA\Chiat\Day in Playa del Rey, Calif. Omnicom arranged that lineup at the request of Pepsi North America president Dawn Hudson and chief marketing officer Dave Burwick, with Omnicom evp Susan Ellis calling the agencies on Pepsi’s behalf, said sources.

A similar scenario is playing out with another PepsiCo brand, Tropicana, which is testing ideas from the Chicago offices of DDB, BBDO and incumbent Element 79.

And when Anheuser-Busch needed a fresh approach for Michelob and Michelob Light, it turned to TBWA\C\D in Playa del Rey, at the expense of sister Omnicom shop Goodby, Silverstein & Partners. It is the first appearance on the brewer’s roster for the Southern California agency, whose work on Apple’s iTunes opened the door.

In addition, TBWA\C\D will now share ad duties with DDB on the launch of low-carbohydrate A-B offering Bud Select.

A-B wanted an agency inside Omnicom that had a “West Coast sensibility” and could help in areas it hadn’t focused on, like outdoor and the Internet, explained Bob Lachky, vp of brand management and director of global creative.

The St. Louis brewer has used a multi-agency platform since the mid-’90s. The first shop to be added was Goodby, based on a recommendation from DDB’s Keith Reinhard, Lachky said. Reinhard knew the company was thinking about using more than one shop, and he at least wanted a known quantity. “Keith said, ‘Think within Omnicom,’ ” Lachky said.

Since then, “we don’t need people telling us, because we know Omnicom is the strongest network,” Lachky said. “It is the first place we look. We have brought on independents as well. But those independents are generally people we have worked with in the past.”

Omnicom, run by CEO John Wren, appears to be particularly adroit at keeping business at home. As one source put it, “They hear of a problem at one of their agencies, and they involve their other agencies before the client goes outside the family.” Some say it is part of the company’s culture: that an agency might not like a sister shop invading its turf, but agency chieftains respect each other and watch each others’ backs.

Omnicom is not alone in working to keep assignments within the family (either proactively or when the client is looking to begin a search). IPG also has kept clients such as General Motors’ Chevrolet, Verizon Wireless and Bank of America within its stable—sometimes instigating searches itself for new ideas within IPG and sometimes being directed to by the client.

Said another source: “In the old days, clients didn’t put all their eggs into one basket because it was a false sense of security. Now, the more money a client puts into a single holding company, the louder its voice. It can speak with one single voice and have more clout. There are vast resources beyond the agency you’re with. Clients say, ‘If I have access to a big huge network, why wouldn’t I want to get a different point of view without scaring anyone?’ There’s also a level of trust for clients when they can go to the top, to the holding company.”

Still, that doesn’t preclude big clients from soliciting independents or, as IPG can attest with Coca-Cola, moving away from a single-holding-company model if it doesn’t suit its needs. Indeed, some see holding-company monogamy as limiting. “There’s a certain amount of smoke and mirrors that comes into play” with single-holding-company contests, said Arthur Anderson of Morgan Anderson Consulting. “It’s really not a competitive review. It’s like an Indian marriage … based on what the parents think is best for the children.”