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Agencies Address How They’re Restructuring to Fight a Breaking Business Model

Publicis Groupe and DDB share insights at 4A’s Transformation

Maurice Lévy spoke about the future of Publicis and why holiding companies are dead. Source: Getty Images

Advertising agencies must evolve in order to survive and support the growing demands of clients. Otherwise, they're doomed to fail, agency leaders speaking at the 4A's Transformation conference say. 

Speakers at the Miami conference including Publicis Groupe CEO and chairman Maurice Lévy and president of DDB North America Wendy Clark broached the subject of the agency and holding company model and what they're doing to keep it relevant.

"I am convinced that existing ways of agencies and particularly holding companies have to come to an end," Lévy said. "We must invent new strategies and new ways of doing business." In his new vision for Publicis Groupe, the company will no longer be called a holding company, but a "connecting company," because the holding company model, Lévy said, is dead and gone.  

Lévy touched on recent restructuring that has been taking place within the Publicis Groupe network, including an overall structural change at the end of 2015, and most recently some reworking to the company's media arm. This move consolidated Publicis Groupe's media agencies into four global brands. Today, he announced another new initiative, designed to help clients rethink their businesses with a new model that integrates technology and consulting into the marketing. 

The product, called Sapient Inside, will bring together Publicis Communications, which is made up of creative agencies including Leo Burnett, Saatchi & Saatchi and SapientNitro—bringing creative and technology in one place. Lévy called Sapient Inside a "plug-and-play solution designed for a modular world."

"I do believe that industry 4.0 calls for radical changes," Lévy said. "No question, creativity will remain indispensable, but we need something new, stronger, built for the future, for the needs of our clients, something better than just a blend of creativity and tech, a general alchemy able to transform."

Wendy Clark, a former Coca-Cola exec and current CEO of DDB North America, also spoke on the subject of evolving the agency model, sharing how the DDB Flex program places collaboration at the center of the business model.

When speaking with a DDB client prior to the conference, the client told Clark she was nervous about moving to a new model, which Clark attributes to that fact that the old model, while riddled with inefficiencies, still works. However, she noted that the old model is, "going to break under the weight of the speed and pace of the market."

DDB Flex is the agency's answer to that. It "embeds media partners and marketing partners in the process and most importantly it embeds clients up front and early in the process," placing high priority on collaboration with clients and other partners.

"I do think a lot of it has to do with not understanding the pressures on a client. They are very challenging, and putting your agenda ahead of your client's agenda will never work," Clark said.

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