WPP AUNZ (ex STW Group) (Australia)

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STW Group was Australia's largest homegrown marketing services group. It reclaimed that position at the end of 2011 after several years in which it was eclipsed by faster-growing challenger Photon (now Enero). Although independently owned, STW was closely associated with WPP, running the local outposts in Australia and New Zealand of three of the British marketing giant's biggest brands, J Walter Thompson, Ogilvy & Mather and Mindshare. However it also controlled a large collection of local agencies. The STW acronym stood for Singleton Tate WPP, after group founder and local advertising legend John "Singo" Singleton, his business partner Russell Tate and WPP. Despite its size the group suffered an alarming slump in performance in 2014. That eventually led to a takeover by WPP at the end of 2015 to create what is now WPP AUNZ, combining STW's existing operations with all WPP's other agencies in that region. The combined business oversees a collection of 80 or so separate agencies, comprising local outposts of all the group's major international networks as well as multiple ANZ-only specialist marketing agencies. Among the best-known of these are full-service agency Ikon, PR & corporate communications giant PPR and integrated shop Spinach. Mike Connaghan is group CEO. WPP AUNZ reported revenues of A$870m - around US$600m - for 2017.

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Historical profile information for STW Group

Recent stories from Adbrands Weekly Update:

Adbrands Weekly Update 1st Mar 2018: WPP Australia & New Zealand, which is publicly quoted down under as a separate entity, reported financial results for 2017. Net sales were up 0.6% on a reported basis to A$870m, as strong growth in the main advertising and media agencies offset weakness in research, PR and specialist communications. Net profit rose 3% to A$84m.

Adbrands Weekly Update 2nd Mar 2017: WPP's main results aren't expected until the end of this week, but the group's newly consolidated subsidiary in Australia & New Zealand has published its full-year figures, showing satisfactory performance in 2016. This was despite well-publicised problems in the first half of last year at the local outpost of Mediacom, and a financial hangover from the old STW Group, of which WPP took majority control at the end of 2015. Net sales at WPP AUNZ rose 1% on a comparable basis to A$865m (or around US$644m). Advertising & media investment accounted for just over half that total, and reported sales growth over 2%. According to CEO Mike Connaghan, "Ogilvy had a very strong year both in Australia and New Zealand... [and] we see plenty of upside in the other global ad agency brands.... Some of the issues confronting GroupM and Mediacom in particular are well documented but it was very pleasing to see Mediacom as one of the agencies retaining and winning significant client mandates in Q4." The strongest growth, though, came from the local PR division, with sales up over 4% and operating profit up 45%.

Adbrands Weekly Update 17th Dec 2015: In a deal that has been looking increasingly inevitable all year, WPP took control of Australian marketing roll-up STW Communications, the independent that, for historical reasons, has controlled the local operations of several of the UK group's key brands, including Ogilvy & Mather, J Walter Thompson, Mindshare and Maxus. Publicly quoted STW also owns a number of other marketing services agencies in Australia and new Zealand, but performance has been challenging for the past couple of years, partly as the result of an ill-conceived expansion into Asia. Rumours of a potential buyout have been circling all year, prompted by the dramatic decline in STW's share price. Under the new arrangement, WPP will merge its wholly owned local operations in Australia, including Grey, GPY&R and other brands into STW in return for a 61% shareholding in the enlarged group (up from under 24%). The remaining shares will continue to be publicly owned, and STW CEO Mike Connaghan will lead the merged company. STW's existing operations and those of WPP in Australasia are about the same size in annual sales. Pro-forma sales for the combined business are approx A$850m this year (or US$620m).

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