Why newly merged VML could be greater than the sum of its parts

Young & Rubicam and J Walter Thompson, two of the world’s oldest and most iconic advertising brands that epitomized the Madmen era, have been shunted into the history books by VML, a 30-year-old commerce agency founded in Kansas City, Missouri of all places.

The new entity is so huge that even the company itself is unclear how many are on the payroll. Media outlets were initially told 30,000 but that has been revised up to nearer 40,000.

The news was an earthquake that shocked staff – who had no inkling until the story broke – and shook the industry. The aftershocks of the merger will be as powerful as the complex task of integrating teams and client rosters is difficult. That will generate one hell of an org chart.

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Agency CEOs on either side will be wondering who will lead their part of the combined agency. And staff will be wondering how their jobs will be impacted. Clients such as Beko, which recently selected Wunderman Thompson over VMLY&R, will be internalizing the news that they are now with VML after all.

And, of course, there will be much emotion. In Kansas City, there will be elation at now being the spiritual home to perhaps the biggest agency in the world – a fantasy to rival The Wizard of Oz.

Meanwhile, on the Wunderman Thompson side, there will be sadness that the brand that so much blood, sweat and tears was committed to is no more.

Much has been made of the brand dynamic around this move. J Walter Thompson and Y&R had a combined brand history of 225+ years. The fact they have gone has caused much consternation. And there is no doubt there is a strong argument that dispensing with such valuable assets appears rash.

But on another level, that ship had already sailed five years ago when VML merged with Y&R to form VMLY&R and JWT was merged with Wunderman to become Wunderman Thompson.

And, of course, with heritage comes baggage. These old-school brands reflected an old-school industry – that is now being transformed.

This bold departure is designed to break with the past and embrace a new world order. This vision will see VML attempt to combine commerce, data, technology and creativity to expand its reach well beyond advertising. It will aim to integrate clients into the heart of entertainment and popular culture.

The Barbie film, according to some, gives a glimpse of this new world – a cultural phenomenon that also enjoyed 150 brand partnerships. There is a sense sectors such as music will also be key as new ways of working with the likes of Beyoncé and Taylor Swift, who also enjoyed huge success over the summer, are developed.

WPP also claims that although it has drawn fire from the ‘legacy lovers,’ clients themselves say a more streamlined approach will make sense.

This leads to the question, why stop there? WPP has dozens of standalone brands, but if integration makes sense here, why shouldn’t others join Wunderman on the Yellow Brick Road? Questions will also be asked if perhaps media and creative could one day be combined.

WPP’s share price is considered to be undervalued. With this move, there seems to be an acknowledgment that the sum of a unified whole could be greater than the sum of the parts.

This is a move that has the potential to transform not only WPP but the industry as a whole. It is a textbook example of a company disrupting itself.

That is always a high risk, but outside forces are poised to disrupt the industry in any case. The wind of change is coming. And the folks in Kansas City know how dangerous a twister can be.