Marketing Briefing: Why holding companies are taking a ‘platform’ approach to pitch more cohesively
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Holding companies are taking a more cohesive approach to pitch advertisers.
Omnicom is the latest to make structure changes to solidify this shift. Last week, the holding company revealed a new structure for its creative agencies, deemed Omnicom Advertising Group, with TBWA Worldwide CEO Troy Ruhanen at the helm. The move is an effort to deliver “seamless” creative services around the globe to clients, according to a statement from Omnicom chairman and CEO John Wren.
Structure shifts like Omnicom’s recent move have become commonplace at holding companies in recent years. How they shake out differs by holding company. Some have parted ways with agency brands altogether in favor of one unified brand like Denstu while others have consolidated agencies like WPP’s move to merge Wunderman with VML.
“Holding companies were about scale, aggregating as much revenue as possible and, to a lesser extent, about having conflict shops,” said Andrew Essex, senior managing partner at TCS Interactive. “Now that is too much and it’s much better to be one throat to choke with an end-to-end offering that you call a platform [managing everything] from ideation to implementation.”
The thinking seems to be that holding companies are pitching their scale as well as the capabilities of teams across various agencies with the promise that the best talent at each of those agencies will be available for clients when they need it. To Essex, it’s a shift from “horizontal integration to vertical integration,” where holding companies tell clients that they’ve got teams who can deliver on everything they could want from “concept to CRM to design to data” where it’s all “integrated as a platform, not a collection of agencies with their own different cultures and the notion that you work together.”
The move for a more cohesive approach isn’t necessarily a move away from agency brands altogether — even if agency brands seem to matter less than they once did — but a recognition that there’s less distinction between big agency brands than there once was, explained Nancy Hill, former CEO of Marcus Thomas and former CEO of the 4As.
“You’re going to see much more coordination, especially with large clients who have, let’s say Omnicom contracts, of deciding who might be the right [agency] brand to work on a given assignment,” said Hill, adding that the shift comes as project work continues to be more common. Project work is “not necessarily short term,” as they can go on for years “but it’s not a guarantee and this allows the group to manage those resources better.”
Holding companies are looking to appeal to marketers with simplification by providing “a comprehensive solution to the marketer by offering a holding company solution,” explained Lisa Colantuono, president of search consultancy AAR Partners, who added that while this trend has been ongoing, “it’s [now] one level deeper; everybody is certainly pushing for efficiency.”
Greg Paull, principal at search consultancy R3, echoed that sentiment in an email. “Clients are looking for more simplified arrangements with holding companies that drive better creative outcomes and offer more flexibility,” wrote Paull. “Some of Omnicom’s largest clients stretch across multiple creative agencies, so this new approach should drive better consistency, synergy and results.”
Even if the move could appeal to clients looking to streamline their efforts, relying on a holding company approach could be a tough sell at times. While some marketers may not care about the agency brands on the same level as they once did, those brands and brand reputations served as distinctions that gave advertisers a real sense of who they were working with and if it would be the right fit for them.
“Clients are more aware of agency brands than network brands,” noted Ken Robinson, partner at search consultancy Ark Advisors. “As a result, there is a shorthand. Meaning, if you were to talk about the work that would come from Anomaly versus the work that would come from Mono [you understood the difference.] They’re both Stagwell agencies but the tonality of the work is different, the culture is absolutely different, the pricing will be different.”
Robinson continued: “In general, I think that by sunsetting individual agency brands, networks put themselves at a disadvantage from a client interest perspective.”
Agency brands are not only markers for clients but also “employer brands,” added Hill. The culture and cache of shops like Wieden + Kennedy, Droga5, Goodby Silverstein & Partners, among others, would draw the top creatives who would then hopefully make breakthrough creative work that advertisers covet and brings them into the agency.
“The need to leverage scale and efficiency to drive shareholder value is a long-term trend,” said Allen Adamson, co-founder of brand consultancy Metaforce. “The downside is the lack of understanding that agency brands are about culture. Good culture creates great creative. What they’re giving up are the cultures these agencies had that were a catalyst for great creative. Ultimately big is not better for creativity.”
3 Questions with Javier Garcia, svp of sales and marketing for the central division at Comcast
How is Comcast marketing its bundled products?
When you think about bundles, you need to recognize that the landscape has changed from TV into streaming. We think there is a space still for cable products. Definitely, we still have a ton of consumers that like live sports, very specific channels. So there is definitely an opportunity there. The second piece is NOW TV [a standalone streaming service that provides access to a variety of live TV channels and on-demand content that was launched in April]. It is a combination of the right content that you can stream and bundle on top of your internet.
Is there a difference between marketing a streaming bundle versus traditional, linear television?
Years ago, we were really focused on the cable product. That was what we advertised the number of channels, et cetera. Then we transition into our data and mobile products. Now with streaming, there is an opportunity to resurface the combination of video or streaming and data.
Xfinity’s streaming bundles include Netflix, Apple TV and other streaming services. These streaming services could be considered competitors. How do you square that from a marketing perspective?
You could argue with our cable product, Netflix is a competitor. Netflix or Hulu are competitors and typically, customers are switching there. A couple of years ago, we had the decision to say, “How do we think about streaming? It’s inevitable.” Ultimately, what we decided to do is to say, “We’re going to partner with Disney, Netflix, et cetera, and make them part of our product.” Then on the advertising side, we don’t do a ton of joint partnerships. But ultimately, we leverage, for example, some of our content partners when we go to market and do advertising. — Kimeko McCoy
By the numbers
Marketers are using generative AI tools to create images for use on social platforms, but only a few of them are owning up to it, according to Gartner research firm Capterra. Per a survey of 1,600 marketing professionals in the U.S., Canada, U.K., Mexico, France, Italy, Germany, Spain, Australia and Japan 39% of companies are using generative AI tools for social content production — but only a third of those are using AI labeling tools. — Sam Bradley
- 62%: The proportion of marketers surveyed that said required labels for AI-made content on social media would have a positive effect on their social media performance.
- 67%: The proportion of those who said they were “moderately to highly concerned” about misinformation online.
- 30%: Those using AI-made content that are labelling it as such.
Quote of the week
“Everything we’re doing now is through a creator lens.”
— Mike Armstrong, chief marketing communications officer of Italian soccer club Juventus, when asked about the shifting mindset around creator and sports brands relationships which has evolved from keeping creators at arm’s length to welcoming them with open arms.
What we’ve covered
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More in Marketing
The cases for and against the CMO role
The answer depends on your vantage point. Gap is bringing back the CMO role after a two-year break, while Hyundai is choosing to phase it out.
With the CMO under the spotlight once more, let’s dive into the pros and cons to see why a top marketer can be an invaluable asset for some companies and an outdated figurehead for others.
The case for CMOs
For many CEOs, a CMO is the not-so secret weapon in their arsenal, driving the profit that fuels growth. This isn’t just lip service from a trade publication — recent earnings reports have shown just how crucial these marketing execs are. CEOs from PepsiCo, Gap, Unilever, Procter & Gamble, General Mills, and Nestlé have all given a nod to marketing—and by extension, their CMOs—as the driving force behind their financial triumphs this quarter.
Nike’s CEO extolled “impactful storytelling” and “brand distinction”—a.k.a. cranking up brand ads. General Mills’ chief raved about brand reinforcement, while Levi’s CEO name-dropped Beyoncé and lauded cultural relevance, translating to turbocharged brand development.
Despite the jargon, these CEOs view their brands as crucial capital investments, not just line items on a budget. While this narrative is familiar, it’s also challenging given how bean counters often see marketing spend as a cost ready for cuts. Unlike other expenses, marketing dollars are accounted for in the year they’re spent, making them particularly vulnerable.
However, CMOs at Nike, Levi’s, and similar firms have elevated advertising to a core business function, safeguarding their budgets even during tough times. Over the years, they’ve mastered the art of demonstrating their value in ways that earn them the respect of their top brass.
This is certainly true for some of the CMOs xx collaborates with. These marketing leaders are increasingly laser-focused on cracking the code of how to unlock the value of data within their businesses. Traditionally, they might have started with creative and media, but their shifting priorities signal a new approach to demonstrating marketing’s impact to their higher-ups, noted xx.
Of course, they don’t always nail it. Even in boardrooms that value marketing, CMOs have struggled to consistently prove their worth. But for every CMO position that’s been cut, there are times when the role makes a comeback. General Mills, the company behind brands like Old El Paso and Häagen-Dazs, revived its global CMO role earlier this year. Coca-Cola did the same just this month. In the world of CMOs, it seems absence really does make the heart grow fonder.
The case against CMOs
Unlike a CEO or CFO, the role of a CMO isn’t always essential — especially in the eyes of some Fortune 500 companies. In fact, only about two-thirds (63%) of them have a CMO, according to Forrester. In other words, for many big businesses, CMOs are a luxury they can often do without.
And even when marketing does have a seat at the boardroom table, it’s not always the CMO who’s at it.
The reality is that companies now demand more from their marketers than the traditional CMO role offers. Marketers nowadays are expected to manage retail media ventures, lead internal privacy efforts, and even contribute to M&A strategies. In a world where roles require more versatility than ever, the classic CMO might just be falling short.
Hyundai’s recent move highlights this trend. Execs there ditched the CMO role in favor of a chief creative officer and a vp of marketing performance. The logic is straightforward: as marketing gets more complex, sometimes you need a toolkit, not just a Swiss Army knife.
For these companies, the CMO as a catch-all specialist is officially passé.
Still, this isn’t about dismissing the role entirely; it reflects the reality of modern marketing—a collaborative, cross-functional approach where success relies more on specialized expertise and strategic coordination than on a single, prominent leader.
Because of this, the era of the star CMO—leaders like Marc Pritchard at P&G, Keith Weed at Unilever, and Linda Boff at GE, who gained recognition for their media savvy and thought leadership during the rise of online marketing—is increasingly becoming a thing of the past.
Today, as marketing requires more specialized skills and a wider strategic outlook, companies are supplementing or even replacing the CMO role with positions like chief customer officer, chief growth officer, chief strategy officer, and chief digital officer. Some are even bringing in regional and fractional CMOs, tailored to address specific growth and marketing needs that a one-size-fits-all CMO can no longer fulfill.
And as with any major shift, there will inevitably be some upheaval and adjustment along the way.
“CMOs aren’t a must-have anymore,” said Ian Bruce, vp Principal Analyst at Forrester. “In this world, the scale and scope of a senior marketer’s role can be very different, which is what CEOs are figuring out. They’re not saying ‘marketing is dead and so we don’t need a CMO’. Rather, they’re trying to understand what’s the rational role, function and responsibility of marketing overall and how can we manage that effectively.”
Ultimately, the case against CMOs is really a case for unbundling the role. When companies phase out or transform the CMO position, they’re not discarding it but redefining it for a world that demands more agile and nuanced marketing expertise.
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