The autumn term is heralded by news of a massive 32 per cent hike in profits for WPP, one of design’s key global players. It is good news indeed for Sir Martin Sorrell’s marketing services empire. Its expansion plans are paying off, with Latin America, India and China making a particularly significant impact on its bottom line.
It’s good news too for design, though much of WPP’s financial clout comes from other creative sectors. The nature of the company’s reporting means the performance of individual design groups isn’t easy to track, but we know from other sources that some are doing well.
But the good news is tarnished by concern among smaller independent consultancies that big groups, like WPP, are majorly undercutting on fees when pitching for projects that not long ago might have been too small for them to even consider. Sorrell’s interests aren’t the only culprits, though one is cited by its global rivals as ruthless in its bids for cut-price work. Other global networks are past masters of the art.
The upshot is that the revenue of smaller groups is seriously challenged and time and effort wasted in a pitching process that appears little better than a supermarket price war. Clients, meanwhile, may be getting the cheapest, but not necessarily the best team for the job, and design is devalued as a consequence.
Why do they do this? It hardly seems a good way to run a profitable business.
We can only assume that there are benefits elsewhere/ a chance to enter new sectors, maybe, a chance for a network partner – say an ad agency – to hold on to a lucrative client by offering design at low cost, or maybe just a way of keeping cash flowing through the studio when big branding work is in short supply.
It is a great pity that the groups that did so much to boost clients’ confidence in design, getting it taken seriously in boardrooms across Britain and beyond, should now be threatening its culture. Yes, it’s tough out there and competition is healthy. But at what cost?