HISTORY's Moments in Media: The Birth of the Big 4 Holding Companies

Harper started his career in the McCann mailroom in 1938 In 1948 at 32 years old he was the agency39s president This was when he took the first steps toward what would become Interpublic in 1954 when he acquired the agency Marschalk ampamp Pratt and instead of merging it into McCann kept its identity and offices separate He soon created the concept of affiliate agencies launching a separate promotions company public relations company and research unit He had realized that one corporation could offer clients a full range of marketing services as well as serve competing clients by maintaining different agencies within the companyAfter launching his holding company Harper went on a debtfueled buying spree accumulating companies in 100 cities throughout 48 countries and serving 1900 clients by 1966 But all that debt had consequences By the end of the 1960s Interpublic39s bankers forced Harper to step down as chairman and he left the company entirely In 1971 IPG went publicThat same decade sowed the seeds of the other big holding companies In 1975 Sir Martin Sorrell amp8212 who would go on to create and then be ousted from the giant WPP amp8212 started working for Saatchi ampamp Saatchi his first job in advertising His strategy of aggressive acquisitions helped to build Saatchi ampamp Saatchi into one of the world39s largest agencies Two years later Maurice Lamp233vy was promoted to CEO of Publicis a job he would hold for the next three decades as the French organization became one of the world39s biggest holding companiesBut the 1980s is when holding companies truly rose to power and became dominant In 1985 Sorrell bought a controlling stake in Wire and Plastic Products better known as WPP a publicly traded British company that made kitchenware It39s the entity that Sorrell would use over the next few decades to build his giant holding company Then in 1987 three big agencies amp8212 BBDO Doyle Dane Bernbach and Needham Harper amp8212 merged to form the Omnicom Group the last of the giant holding companies to be founded The deal which Ad Age dubbed quotThe Big Bangquot was masterminded by Needham Harper executive John Wren who eventually became the CEO of the new company in 1997While building WPP Sorrell also orchestrated advertising39s first hostile takeovers buying J Walter Thompson and some subsidiaries for 566 million in 1987 Two years later he also purchased the Ogilvy Group for 864 million which prompted founder David Ogilvy to come out of retirement and infamously dub Sorrell an quotodious little shitquot In 1990 WPP became the world39s largest advertising companyBy the 1990s the quotBig Fourquot was set Interpublic Omnicom Publicis and WPP They continued growing acquiring more small shops and expanding into new areas In 2003 those four giant holding companies accounted for more than 50 percent of US agency revenue across advertising digital media PR and their other entitiesBut the 2010s brought some challenges for the giants In 2013 Omnicom and Publicis announced a merger though the following year it was promptly called off In 2018 amp160Sorrell departed WPP the company he founded and built after some allegations of personal misconduct Increasingly in the 2010s technology was changing the landscape and new entrants amp8212 not just platforms such as Facebook and Google but also former partners such as consultancies amp8212 were leveraging data to take business away from the big incumbents This trend continuesBut for now the Big Four are still the dominant advertising companies in the worldClick the social buttons to share this story with your friends and colleaguesThe opinions and points of view expressed in this content are exclusively the views of the author andor subjects and do not necessarily represent the views of MediaVillagecomMyersBizNet Inc management or associated writers

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HISTORY's Moments in Media: The Birth of the Big 4 Holding Companies

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HISTORY's Moments in Media: The Birth of the Big 4 Holding Companies

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