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 2021 were £10.4bn with net profit of £1.0bn.
Capsule checked 7th May 2021
Adbrands Account Assignments tracks account management for the world's leading brands and companies, including details of which advertising agency handles which accounts in which countries for major markets.
WPP's quarterly organic growth since 2016 (subscribers only)
Who are the competitors of WPP? See ranking of Leading Global Marketing Groups
Adbrands Update 16th May 2022: With all results now in, Stagwell delivered the industry's best performance for the quarter with organic growth of 23.6%. Omnicom was the best of the majors at 11.9%, followed by Interpublic at 11.5% and Havas at 11.4%. A little way behind was Publicis (despite its string of account wins) with 10.5%, followed by WPP at 9.5% and then Dentsu with 9.1%.
Adbrands 27th Apr 2022: WPP's results for 1Q 2022 were, perhaps, a little weaker than expected. Like-for-like net revenue growth was 9.5%, making WPP the first of the four groups to have reported so far to come in below 10%. It was also the first to report Q1 growth that was lower than Q4 2021. The group's two biggest markets of the US and UK were both single-digit at 8.9% and 8.1% respectively, though the next three - Germany, China and especially India - were much stronger at 16%, 12% and an impressive 25% each. Reported revenue less pass-through costs was £2.57bn. WPP's weakest area appears to be in its global creative businesses (or global integrated agencies as it describes them). These achieved only 5.6% organic growth, compared to 12.8% at GroupM media and over 13% at WPP's specialist and PR networks. See WPP's quarterly organic growth since 2016 (subscribers only)
Adbrands 10th Mar 2022: With all financial results now in, Dentsu headed the rankings table by organic growth in Q4 at 14.2%, followed by Interpublic at 11.7%. Stagwell comes next at 11.3% followed by WPP at 10.8%, Omnicom at 9.5% and finally Publicis and Havas both at 9.3%. Most observers might wonder how Publicis - given its seemingly endless catalogue of account gains in recent months - has managed to end up with the industry's lowest organic growth metric for this quarter. The answer can only be that Publicis is gaining billings at the cost of organic revenue growth; in other words, by undercutting rival groups in the fees it charges.
Adbrands Update 4th Mar 2022: In perhaps the most dramatic statement to-date by any marketing organisation in relation to the invasion of Ukraine, WPP said it is discontinuing all operations in Russia. In a statement, the group said "WPP’s ongoing presence in Russia would be inconsistent with our values as a company... WPP has nearly 1,400 people in Russia who have been dedicated and valued members of our organisation, and we thank them for their commitment to the company and our clients. We deeply regret the impact of this decision on our Russian colleagues. We will provide support to them and work closely with our clients and partners as we discontinue our activities in the country."
Adbrands Update 24th Feb 2022: WPP was the latest group to report buoyant figures for Q4 and FY 2021. A like-for-like increase of 10.8% in net revenues for the final quarter put WPP mid-table above Omnicom and Publicis but below Dentsu and Interpublic. Full-year LFL was 12.1%, and the LFL increase over pre-pandemic 2019 was a very satisfactory 2.9%. Reported net revenues for the year were £10.4bn (approx $14.4bn) with net profit of £1.0bn. Regionally, out of WPP's 13 major markets, all reported positive LFL growth in the final quarter, with one exception, Australia.
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. Grey will be the cornerstone agency within OpenX and 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."
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