Despite a series of big account wins in the United States and the media adoration that comes with being top dog, Droga5 is having a harder time in Europe and especially Australia. This week the agency announced that it will be closing its Sydney office before the end of the year.
In the accompanying press release, David Droga (who is himself Australian) goes into some detail about what doomed his agency’s operations Down Under:
“This was obviously a very difficult decision, both professionally and personally, and as a proud Australian, it was a bitter pill to swallow. However, we see little value in continuing to operate in this market with an office that, sadly, no longer consistently represents the Droga5 brand.
Despite world-class local management and many talented individuals working hard, the Sydney office has floundered over the past few years. Some of it was self-inflicted, some of it bad luck and some of it just the befuddling local advertising market. Regardless, we aren’t a company that measures its success by the number of its offices, but rather by the creative output, positive influence and culture of each office.”
The release also makes sure to mention that Droga’s stateside agency has “enjoyed its ninth consecutive year of over-40-percent growth” in addition to winning various awards. Global CEO Sarah Thompson also writes that Droga is currently “focusing on creating a worldclass leadership team in Europe while simultaneously exploring potential models of offerings in China as our two key priorities outside the U.S.”
The More About Advertising blog elaborates on the “why” behind the closing and the agency’s struggles in London by citing the 2013 decision to sell 49 percent of the Droga5 organization to the talent agency William Morris Endeavor and claiming that Droga5 U.K. “hasn’t won anything of note in two years of trying.”
This summer, Droga began trying to reverse that trend by hiring former Grey London managing director Bill Scott as CEO of its U.K. operations. Scott faces some big challenges in elevating the agency’s status in the U.K., and The Drum wonders whether he has “the ruthlessness that may be needed to finally fulfill Droga’s ambition” of creating the most influential agency in the world.
The larger Droga5 organization will have no further comment on the Sydney closing.