WPP Group advertising & marketing assignments

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British marketing giant WPP overtook long-time rival Omnicom for the first time in 2008 to become the world's biggest marketing group, as well as the most profitable. It has remained the biggest ever since, with gross revenues reaching a record high, in USD at least, of $20.8bn in 2018, helped by the weak pound. Whereas some rivals, like Omnicom and Interpublic, for the most part avoided large acquisitions in the 21st century, WPP continued steadily to expand its portfolio, reinforcing its founder and CEO Sir Martin Sorrell's reputation as one of the industry's most skilled dealmakers. Among the more significant recent additions to the collection were digital advertising network 24/7 Real Media in 2007; global research group TNS, acquired during 2008 after a long and sometimes bitter siege; and top German marketing group Commarco, snapped up in 2011. The group's last $500m-plus acquisition was AKQA in 2012, but it has continued to hoover up smaller businesses around the globe. However, a sharp downturn in profitability in 2017 was followed in early 2018 by an allegation that WPP's creator Martin Sorrell had misused corporate assets, a charge he strenuously denied. With WPP's share price in freefall, Sorrell stunned the global advertising community by resigning from the group he had assembled almost single-handedly over the space of 33 years to launch a new venture, S4 Capital. His successor Mark Read has been struggling since then to turn around the group's weakened performance, partly by consolidating WPP's diverse collection of assets. Several investments and operating businesses were sold, including the controlling stake in global research group Kantar. His most radical move was to merge the ailing J Walter Thompson, Y&R and Grey networks with stronger sister agencies. WPP still owns four of the world's largest advertising networks; now Wunderman Thompson and VMLY&R as well as Ogilvy and what is now AKQA Grey. They are partnered in turn by four global media networks Mindshare, Mediacom, Wavemaker and Essence under the overall banner of GroupM. WPP also controls a substantial portfolio of PR, CRM, design, consultancy and diversified marketing subsidiaries. Net revenues for 2020 were £9.8bn (or $15.4bn in gross revenues), but the cutbacks prompted by the Covid pandemic as well as large impairments resulted in a net loss of £2.9bn. However, WPP took almost everyone by surprise by reporting the best organic growth performance of any of its peers for the first quarter of 2021.

Capsule checked 7th May 2021

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WPP's quarterly organic growth since 2016 (subscribers only)

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Wunderman Thompson

Recent stories from Adbrands Update:

Adbrands Daily Update 8th Nov 2021: WPP triumphed in Coca-Cola's mammoth global marketing review, though other agencies will also pick up some duties. Details of how the process will work are not yet entirely clear, but WPP was named as Coke's "global marketing network partner". Under the banner of bespoke unit OpenX it will "manage end-to-end creative, media, data and marketing technology, across the whole portfolio" and across 200 countries. Mediacom is understood to be the lead media network, but it will work in Japan and Korea with Dentsu as Coke's "complementary media partner". In addition, selected other agencies from the Publicis and Interpublic rosters will become part of a strategic creative roster working within an open-source model. "We know brilliant creative ideas come from anywhere," said CMO Manolo Arroyo, "and we will retain that flexibility." Leo Burnett, McCann and its Argentinean agency Mercado were all name-checked in Coke's announcement as contributors to the creative roster. "Consumers respond to an entire experience," said Arroyo, "they don't separate the message from the medium – and that's why we've designed an agency model to be truly consumer-centric and silo-free. This model is about seamless integration of the power of big, bold ideas and creativity within experiences, amplified by media and data. It will enable us to create end-to-end experiences that are grounded in data-rich insights and optimised real-time, at scale, as we learn from consumers."

Adbrands Daily Update 28th Oct 2021: WPP managed to top its three biggest Western rivals in 3Q for organic growth, or like-for-like growth as the British group has long termed it. So far, only Havas has done better, with Dentsu set to report next week. WPP's net revenues rose 15.7% LFL to £2.64bn; better still was the 6.9% two-year performance against pre-pandemic 3Q 2019. Of WPP's top five markets, the three biggest all outperformed 3Q 2019, with the US up 6.2%, the UK 9.3% and Germany a stellar 32.1%. However, China and Australia were both lower than 2019. Among other markets, India, Canada, Italy, Brazil and Russia were all ahead on two-year LFL growth, while France was flat and Spain slightly down. As a result of the strong bounceback in 2021, WPP lifted forecasts for the year as a whole to LFL 11.5% to 12.0%. See graph of WPP's quarterly organic growth since 2016 (subscribers only).

Adbrands Daily Update 13th Oct 2021: The merger of financial PR groups Finsbury Glover Hering and Sard Verbinnen was confirmed. The all-stock deal values Sard at $303m, and the combined group at $917m. WPP will retain a 57% stake in the business. Combined fee income of around $330m would place the group just outside the global top 10, according to PRovoke Media estimates of PR revenues, sitting between WPP's H&K Stratgies and Ogilvy. A new name for the merged business will be disclosed in due course. FGH CEO Alexander Geiser will retain that role in the enlarged business.

Adbrands Daily Update 27th Sep 2021: WPP is paying a fine of $19m to the US SEC to settle allegations that it failed to prevent acquired agencies in international markets from paying bribes to local governments to secure business. The SEC cited specific examples where newly acquired subsidiaries in India, China, Brazil and Peru paid bribes to local officials to secure government business or avoid tax bills. There is no suggestion that WPP condoned or was even aware of the practices. The group agreed to settle the allegations without admitting or denying responsibility, but said it has terminated the employment of any individuals identified in the SEC's investigations.

Adbrands Daily Update 20th Sep 2021: WPP's UK-based corporate communications agency Finsbury Glover Hering is in advanced talks to merge with US competitor Sard Verbinnen. A combined agency would be roughly the same size by fee income as WPP's existing H&K Strategies, and could even replace that firm among the top ten firms globally. Currently, Sard is minority controlled by US private equity firm Golden Gate Capital. If a deal is concluded, WPP is expected to end up with around 45% of the merged business. However, the new company is likely to pursue an IPO of part of its equity in 2023, while still remaining under WPP's control.

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