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| Dave Samson |
If you were building a communications firm today, you wouldn't build Weber. You wouldn't build Fleishman. You wouldn't build Burson.
I know that's a provocative thing to say. I spent years inside and alongside holding-company firms like these, and many of the people who built them are individuals I greatly respect and admire. But the holding-company model has been in structural decline for years, and the evidence is no longer deniable.
Twenty years ago, I told the CEO of a major holding-company firm that our business model was broken. Our problem was not talent. It was not the quality of our counsel or the lack of client demand. It was our operating model.
Finance leaders at the holding company were driving the most material business decisions, despite the fact that few, if any, had sat across from a client, worked through an account-team challenge, or helped secure a single dollar of new revenue. The center of gravity had shifted far away from clients and toward the holding company itself. I strongly believed that any agency that put its parent company at the center of its model, rather than the client, was putting itself on a path toward extinction.
Fast forward to today. WPP's merger of BCW and Hill & Knowlton into Burson was supposed to produce an integrated, modern mega-agency, led by an exceptional CEO in Corey duBrowa. Now, three years later, WPP is reportedly exploring a sale. At the same time, the agencies of OPRG, including Weber Shandwick and Fleishman-Hillard, are shrinking amid Omnicom's acquisition of IPG. Burson, Weber and Fleishman are all terrific firms—among others—that are locked inside holding companies that no longer view them as core assets. One analyst put it plainly: Omnicom and WPP are in survival mode.
I've watched this play out in client conversations for years. A client calls on a Tuesday with a fast-moving problem. By the time the holding-company team has routed it through the right P&L and staffed the right junior team, it's Thursday, and the problem has metastasized. The promise of scale and senior advice has curdled into complexity, and the people paying the bills can feel it.
AI has made this trap fatal. Research, monitoring, drafting and message testing are not only faster, but better, with automation. This changes what firms are actually competing on. Those that win will compete on judgment, on subject matter expertise, on proprietary insight, and on the ability to see a problem coming before a client does. The holding companies—those who need these capabilities most– are least able to build it. Years of revenue decline and margin pressure have left little room to invest in new capabilities, intellectual property or talent, because every dollar of capital has to survive a resource-allocation process designed to protect the interests of the parent company.
The firm that gets this right won't just draft your crisis statement faster. It will have identified the vulnerability weeks earlier, modeled how it moves from Reddit to the Hill to your balance sheet, and helped you close the gap before anyone writes the first headline.
For communicators and strategists, the incentives have shifted too. The best people in this business increasingly want to be somewhere where the advisory product is the core of the business, not a line item in a diversified holding-company portfolio. Every time a holding company merges two storied brands into a cost-reduction exercise, it accelerates that migration.
Recent news that Jim O’Leary—the widely respected North America CEO and global president of Weber Shandwick—chose to leave a legacy agency to become CEO of data-driven challenger Penta Group put a fine point on it for me.
A year from now, I think we'll look back at this period as when the talent question got settled. The most innovative leaders and builders in communications will have made their moves. The firms they chose to join or engage will tell you everything about where this business is going. The ones left behind will still be explaining why scale is a feature.
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Dave Samson is a partner at FHS Capital Partners. He previously led communications at Chevron and Levi Strauss & Co., and served as global vice chair at Edelman.
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