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MEC and Maxus to be called Wavemaker as CEO Tim Castree hails ‘epic’ pace of change with merger

WPP will name its newly merged media giant 'Wavemaker'. CEO Tim Castree, the Aussie tasked with overseeing the $38bn global merger, speaks with Simon Canning about the epic pace of the move, the hurdles he faces and the impact commoditisation is having on media agencies.

WPP will call the soon-to-be merged MEC and Maxus agencies Wavemaker with gloabl CEO Tim Castree admitting the merger was announced with no real plans in place on how it would proceed until local managers had been named.

Wavemaker takes elements from WPP and Group M

Speaking with Mumbrella, Castree said the new branding was one crucial step forwards as Group M sought to remove itself from the constraints of commoditisation. He also said that the merger was being pushed at an “epic” pace.

He said the new brand was a combination of the heritage of WPP and GroupM which would forge an agency with more than $US38b in billings, 8,500 staff and 139 offices in 90 countries.

“Our purpose is to provide advertisers with the power to transform and grow their business through our Purchase Journey obsession; and importantly to do this through the integration of Purchase Journey insights and data with PLATFORM, GroupM’s proprietary global audience technology,” Castree said.

He said the new position was a “compelling manifestation” of the new director of the merged agencies and GroupM.

“The starting point for the merger is really a GroupM portfolio consolidation and that starts with the fact that we have all experienced, and you have probably written about, the real forces of commoditisation in the media industry,” He said.

“Foundational media planning and buying is already a commodity and has been getting squeezed pretty hard over the last few years with the rise of procurement.”

Tim Castree said he wanted local managers in charge of the mergers rather than poking about with a 5000 mile screwdriver”

He said WPP made the announcement before any plans had been put in place.

“Make the announcement first then dig in quickly, but that of course creates a little bit of anxiety and uncertainty and we have had to move quickly because we don’t want to create any instability for people or clients and so thats why we have set a pretty cracking pace,” he said.

“It is a significant pace of change, but we felt like we needed to go quickly. On one hand we’re moving at a blistering pace, on the other, I have days where we feel like we are not moving fast enough and that’s because inevitably when you toss everything up in the air with the announcement like we did – and we announced before we had a fully fledged plan at the country level.”

Castree said in setting up Wavemaker he was also following the advice of WPP board member and former Telstra CEO Sol Trujillo.

“The one thing he said to me, and I agree with this, is the only response to commoditisation, the only strategy for that is to differentiate,” he said.

“And so obvioulsy the portfolio strategy for Group M as we looked at it is there wasn’t enough distinctiveness and differentiation in the portfolio and we had an opportunity to rationalise in a way that was going to improve the distinctiveness which we though would help us compete as a portfolio more broadly. So that’s where the decision to merge Maxus and MEC originated.

Peter Vogel to head the merged MEC and Maxus in APAC

While Maxus and MEC operate across 90 countries, Castree said there were 54 markets where “we had a consequential decision to make” and local leadership positions have been finalised in 47 markets with the remainder to be locked in over the next week.

He also said he feared not having local leadership in place swiftly would result in managers far removed from local markets making damaging decisions: “There is nothing worse than the 5,000 mile screwdriver,” he said.

Castree said there would be elements which would form the make up of Wavemaker, but it was more about what was taken away than was added.

There is still  a lot of important foundational ingredients that are coming from both Maxus and MEC and we are working pretty hard to reimagine that into some new and exciting way,” he said.

“Actually in many ways it’s like the joke about the statue of David, it’s not about what you add it’s about what you chisel away to get to the essence of what’s going to make the company great.”

Ernst & Young have been working with Wavemaker to identify the model going forward across a number of business elements.

“We have seven distinct integration work streams – everything you could imagine from the P&L to real estate to the executive teams to some product work,” he said.

 

Maxus showed its passion to clients taking out Valentines Day ads in newspapers in 2014

“From Maxus what is most foundational to Wavemaker will be culture and values. They describe their culture as passionate, agile, collaborative, entrepreneurial and diverse.

“If I had to pick on the MEC side I think the foundational thing that we are really amplifying from the MEC side would be the real strength and the capability in the purchase journey planning. We have a massive global dataset now driven by an MEC capability on consumer purchase journeys. Something like 70,000 surveys across 65 categories and 30-plus markets of understanding how consumers make their way to purchase in various categories.”

He said he would be trusting local operating executives to make “good decisions”.

“It’s been quite stressful and a lot to deal with but it’s been incredibly smooth,” he said.

“We haven’t hit a single snag and the stability on the client side which we’d hoped for, wanted and expected, has materialised. When you go into a process like this you always expect a couple of unforeseen surprises and so far, knock on wood, we just haven’t had any and that’s been a blessing.”

He said the biggest concern he had in accepting the role overseeing the merger was maintaining stability.

“The number one thing you want to ensure is stability for the staff and stability for the clients, they are the two biggest risks,” he said.

“It’s a combination of wanting to mitigate downside risk and at the same time we’re going in with a pretty bold ambition of transformation and reinvention and so we are setting ourselves a pretty high bar in terms of how the company is going to evolve.

“The intent behind doing this was to drive more distinctiveness and differentiation. We have set ourselves a high bar there and I think just at the time in the industry where the forces of commoditisation are are greatest we are putting ourselves under great pressure and have a need to invest significantly in the things that are going to drive distinctiveness and differentiation.”

Looking a year ahead, Castree said he would like the story to be one of a successful merger and the emergence of a distinctive force in global media.

“I’d like to be telling you that the drive on building a distinctive value proposition for Wavemaker has re-spurred top line and bottom line growth in the business and that’s been driven by a real balance of dynamic local client entrepreneurship and leadership, so real, local market strength married with even more great multinational and global client,” he said.

“The other big thing I would be looking for is we are earning more of our revenue from most or more differentiated and value-added products, like our analytics, our content, etcetera, etcetera, these are things I think are the hallmark of a more progressive relationship. It’s foundational media buying that’s in the commodities status. It’s a really important part of our scale and our value to clients. It used to be enough, it’s certainly not enough any more.

He said ultimate success would be charted over time.

“We will judge the success over a reasonable arch of time. I’m not out there desperately clamouring to prove that we are on to the right thing by landing that symbolic win. That would be nice but priority number one is really getting this integration locked on and making sure our existing clients feel the benefit. But we are growth minded. They don’t have to be mutually exclusive.”

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