NEW YORK The heads of Interpublic Group and WPP Group expect a trend in which teams of agencies from holding companies compete for large, integrated accounts to continue, pointing to Intel's ongoing $300 million global review, where the client approached the parents first. Global reviews for HSBC Group and Samsung were other recent examples, and WPP came out on top in both.
Talk of what WPP CEO Martin Sorrell called "super-agency" approaches arose during Sorrell's presentation to Wall Street analysts at the CSFB Media and Telecom Week conference in New York. An analyst later asked IPG CEO David Bell about the topic during his presentation at the same conference.
The 2-year-old relationship between IPG and Bank of America fits the super-agency mold, with a top executive (IPG chief marketing officer Bruce Nelson) managing $600 in business across some 16 agencies. Bell said that the move toward such "client-tailored solutions" would "accelerate" in the future.
Sorrell, who also calls it a "team approach," said: "Is it a trend? Well, it's certainly more [prevalent] than it was at this time last year. Will there be more? We've seen a number of similar types of activity, particularly in the pharmaceutical industry.
"So, while I would hesitate to say it's a trend, certainly it is a matter of growing interest. And the key issue is, us being able to deliver better sets of resources, better groups of people to provide solutions for our clients."
In a wide-ranging, 45-minute presentation, Sorrell also said WPP is on track to deliver a 13.8 percent operating margin by year's end, as promised, and expects that figure to improve to about 14 percent in 2005.
Bell did not provide guidance on future operating margins but did say that IPG's margin this year through September was around 9.4 percent, excluding extraordinary charges, up from 7 percent for the same period last year.