The contradiction at the heart of WPP
WPP is going through some huge changes, and in order to survive, the advertising giant will have to start believing in what it believes in, argues Jason Rose.
Last week, WPP’s group CFO reportedly instructed all managers globally to immediately cease hiring. The edict followed the biggest collapse in the company’s share price in 20 years after a spluttering start to new CEO Mark Read’s recently outlined turnaround strategy.
Read took over the world’s largest advertising group in April after the shock departure of WPP founder and driving force, Sir Martin Sorrell.
It’s an unenviable task given the increased competition for clients’ marketing dollars from consultancies like Deloitte and Accenture, the growth in often direct-to-advertiser platforms like Alphabet and Facebook and increasing interest among some clients to take advertising in-house.
The WPP strategy was extraction, not necessarily making brands survive forever.
Acquire at x13 EBITDA, maintain it for around 20-25 years, repeat.
That’s why it was always a high dividend share!
For a business that is about building client’s brands, they’re not very good at building or even maintaining their own. None of their media agencies stand for anything anymore, and if they say that they do they’re certainly not practicing what they preaching.
Agencies such as Ogilvy need to merge. It is seriously struggling and something needs to happen now before clients leave.
Does anyone writing comments on this story really know anything about anything? I mean really – 13 x EBITA? WTF are you taking about? Ogilvy struggling? WTF – it’s winning more awards than most agencies. I mean people – if you actually don’t know what you’re taking about save your time and spend more time with your mum – you clearly still live with her so enjoy the moments. Wow.
In the five years or so I was with WPP agencies, I am pretty sure that 90% of that time there was either a hiring freeze, a pay-rise freeze or both.
You are not wrong. I can tell you with complete confidence that the outward facing, inspiring, motivating, “tech and data are the future”, public communications isn’t backed by any actual internal structures to make it happen. Working here is a master class of balancing competing interests. The competing interests of extraction vs client outcomes (have your cake and eat it too shouldn’t be 100% of the time). The competing interests of old school media folk with newer school graduates with middle rank media folks who are trying to change the company from the middle because the top isn’t changing
fast enough or ruthlessly enough. The entire WPP business is conflicted and not aligned to what the NYC top are saying. The only way to embrace the new media, tech and data alignment is to cull those within who don’t want to embrace it, but that would be 50% of the workforce!