Account Consolidation

There are a number of valid arguments for agency consolidation, including: Consistency of brand positioning, optimization of best practices, economies of scale, and command of more and better resources commensurate with the client’s importance. Contrary arguments include limiting creative points-of-view and losing the edge that comes from constant competition.
Those contrary arguments lose steam when clients have the opportunity to consolidate their accounts within holding companies, as Pepsico (Omnicom), HSBC (WPP) and many others have done. They can avail themselves of a variety of creative resources, and still keep individual units on their toes with the threat of moving the business to another unit. (Make no mistake, they may be part of one corporate family, but there is intense competition between the units of a holding company.)
In the end, perhaps the most compelling argument for account consolidation is economic. The more volume a client gives an agency, the better terms it can negotiate. The agency holding company model makes it a win-win situation: CMO’s can have access to the variety of creative and other resources they require, CEO’s and CFO’s get a better financial deal, and the holding companies have greater income certainty.
Dismissing consolidation as “one stop shopping” or “putting all eggs in one basket” misses the point. These are big business decisions made for sound business reasons. It is wishful thinking to believe consolidation is a myth.