Opinion: Why PR needs to move away from the ‘holding company model’

Aaron Petras, vice president of WE Communication’s agency and partner strategy and now managing director of The PLUS Network, discusses the marketing industry problems that The PLUS Network is trying to solve and why agencies need to move away from the ‘holding company model’.

Choice. As consumers this is something we’ve become used to. We make choices on the content we consume, the platforms we use, the devices we live our lives through (except if you’re an Apple customer), the products we buy and the clothes we wear. In fact, digital and social media has given us more choice and opportunity to be ourselves and express our individuality more than ever before.

However, flip this scenario to the world of communications and the concept of choice can often become a complex and difficult barrier to success. If you are a brand manager that needs to deliver a truly 360 degree brand experience that encompasses an entire suite of disciplines then you can end up with too much choice – which PR, point-of-sale, paid media, experiential, brand or search agency should you use?

It was no wonder that many large, global brands shifted to the holding company model. Why stress over short-listing multiple agencies across multiple disciplines, which could leave you with numerous agencies to choose from, when you could have access to a single point of contact, single point of billing network that provides you with all the services you need, as and when, without the hassle of setting up a network yourself. Sounds perfect doesn’t it? Well, kind of.

The benefits of the traditional holding company can fail at many moments in the lifetime of a client relationship.

For example, some clients are forced to utilise an agency that does not fit their needs. In these instances, rather than turn to the holding company to find the right partner for their needs, they are stuck with an unsuitable agency because it is the holding company’s only offer in the area where expertise is needed.

Or when holding companies are working with so many brands in one market or category, many clients end up being served a campaign or idea that was likely pitched (unsuccessfully) to a similar or competing brand. In this instance brands can not only risk ending up with a half thought through idea, it’s likely to be one where the insight was shoe-horned in to fit the brand just because the thinking had already been done previously.

And for those clients operating in multiple markets and across multiple disciplines, the holding company structure can often get financially inhibitive. With some many agencies and disciplines to support, the holding company clearly has many (expensive) salaries to pay which in turn leads to over-inflated fees and campaign costs. Why pay over the odds for expertise when there are many agencies out there that offer the same skills and capabilities at a fraction of the price.

Whilst the holding company model can offer large multi-national brands many benefits, the marketing and communication landscape is changing. Brands needing to move at the speed of light to match the motion of their stories will need to operate in an environment where they have the greatest level of flexibility and speed.

In these instances a new approach to the holding company model is needed – one where clients can dial up and down expertise as and when needed without the costs of retaining multiple agencies. They need a network that isn’t shackled by bureaucracy and internal politics so that decisions and support can be made without the need to navigate agency egos and complex internal structures. It’s time for a change. It’s time for the non-holding company model to rise.