Nov 29

A holding company by any other name would still be a holding company

I chuckle whenever I see, hear or read the latest double talk from one of the advertising world's Puppet2.s600x600 holding companies.

On the one hand, they try to convince anyone who will listen that size trumps all. They'll pontificate at length about the importance of breadth and depth, and the need for 35 offices around the world to service global clients.

But, because their traditional advertising models are relics of the past, they'll also try to convince you they're as lean and mean as any independent midsized firm in the world. Ha! Baloney.

Monday's advertising column in the New York Times is a classic example of holding company double talk. BBDO, one of the true monolithic, mega agencies of the advertising world, just created a small, 20 employee consulting unit called Batten & Company.

It's named after George Batten, one of the 'B's' in BBDO. BBDO said it chose Batten, as opposed to Barton, Durstine or Osborne (the other 'B,' 'D' and 'O' in BBDO, respectively) because Mr. Batten was more entrepreneurial. Double ha! As if a holding company (or a unit thereof) could ever be truly entrepreneurial.

The dirty little secret about holding companies (and their units) is that they serve two clients: the holding company and the client (and woebetide the holding company employee who doesn't recognize the holding company is the more important of those two clients).

Clients are billed twice. There's one invoice for the work provided and, as I can personally attest, a management fee that's added for the holding company in London, Paris or wherever.

When one serves in a senior management position at a holding company, one is consumed with meeting the financial and administrative needs of the holding company (and, oh yeah, also providing occasional counsel to the largest client).

Holding companies try to lure our people away by using lines such as this: “Hey kid. You've done well. But, now it's time to play in the big leagues.” Triple ha!

What they don't tell you about the big leagues is how totally devoid they are of true George Batten-like entrepreneurship. A BBDO may carve out a small, nimble, client-focused consultancy. But, trust me, that little consultancy has to play by the same rules, and tack-on the same overhead fees, as any other member of the holding company. It would be akin to the old Soviet Union spinning off a small republic, saying it had the same freedoms as any democracy, but still had to toe the line with the Kremlin.

I wish Batten & Company well. But, I also wish the holding companies would stop trying to be all things to all people. They should embrace their worldwide footprints and be done with it.

I'd like to think George Batten would agree that, suggesting a holding company's new unit will be as entrepreneurial as, say a certain blogger's PR firm, qualifies as false and misleading advertising.