Nihal Demirci via Unsplash
Client conflicts, once a feared no cross business hurdle, are now less a threat to advertising agencies.
With fewer agency brands, and more project work, the industry has had to get better at confidentiality juggling client accounts.
And marketers are generally less rigid about competition conflicts.
Generally account clashes are successfully navigated and common today.
GroupM, for example, handles two of the top four Australian banks and at least two major automotive brands, while Publicis represents multiple packaged goods companies.
Historically this was sacrosanct, with clients kicking back at agencies servicing more than one brand within the same industry category.
The fear was that agencies could share private data between competing clients or simply one brand might perceive that another was getting better ideas.
To avoid these fears, holding groups would create internal solutions.
Creating a new agency specifically designed to service conflict accounts is one way. Sometimes called conflict shops, they are typically not fully staffed and leadership sit across another agency brand.
Or if the client spend is enough, an agency could create a bespoke shop which services just one client, such as Telstra’s +61.
But the increase of holding group’s slimming down their agency brands and buying up independents, means there is less choice for clients to select a conflict-free agency.
Recent examples include Omnicom and IPG’s giant merger which sees many overlapping client portfolios, Clemenger BBDO, CHEP Network and Traffik merger and Publicis Groupe acquiring independent media agency Atomic 212°.
Omnicom CEO John Wren said conflicts are not the issue they were in the past.
“I'm not aware or threatened by any conflict as a result of us announcing that we're joining forces here,” Wren told analysts when briefing on the Omnicom takeover of IPG.
“Are there clients that we have to sit with in the coming weeks and months and assure them that we still love them quite as much as we did prior to this morning? Yes. But clients are what drives us every morning when we wake up. So I'm not expecting anything.”
However, there are still exceptions as conflicts are always a consideration for the top advertisers.
Industry insiders noted that Wavemaker lost its Netflix media account following the recent appointment of Amazon. And another streamer, Paramount, was a client.
As merger and acquisition (M&A) activity in advertising is only expected to accelerate in 2025, driven by private equity investment, the potential for conflicts is more of a logistical challenge than a strategic barrier.
Also the rise in contract work by clients and the decline of agency-of-record appointments, in reaction to the shrinking of marketing budgets, is also influencing the ease.
While it is easy to apply a one-size-fits-all approach, marketing consultancy TrinityP3 is advising clients they need to take issues around conflicts on a case by case basis.
"The phrase 'conflict of interest' is often a tightly defined legal term and each organisation will have its own definition. This is usually where people need to start,” TrinityP3 managing director of ANZ Nathan Hodges told AdNews.
"Often many brands will be comfortable enough to work with agencies whose parent company might have a perceived conflict, via another agency.
"The real challenge when this occurs is not the agency but rather the business-wide systems or production backends which are increasingly homogenised and streamlined, for reasons of efficiency, but which can end up causing the greatest issues - especially as these aspects are not visible to clients.
"We need to recognise that in 2025 it's almost impossible for a major brand to eliminate all potential conflicts if they are working with a number of agencies. The important thing is that clients just need to be smart and alert to the issue."
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