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, have largely avoided large acquisitions in the 21st century, WPP continued steadily to expand its portfolio in the 2000s, reinforcing Sorrell's reputation as arguably the industry's most skilled dealmaker. 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 and CEO Sir 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 weakening performance, partly by consolidating WPP's diverse collection of assets. Other 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 and Y&R networks with stronger sister agencies. WPP still owns four of the world's largest advertising networks; now Wunderman Thompsonand VMLY&R as well as Ogilvy and Grey. They are partnered in turn by three global media networks Mindshare, Mediacom and Wavemaker, under the overall banner of GroupM. WPP also controls a substantial portfolio of PR, CRM, design, consultancy and diversified marketing subsidiaries.
Who are the competitors of WPP? See ranking of Leading Global Marketing Groups
WPP's quarterly like-for-like growth since 2016
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Who are the clients of WPP? See individual agency profiles below for more
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Adbrands Daily Update 14th Jan 2021: WPP scored a significant coup by poaching widely admired creative leader Rob Reilly to become its new global chief creative officer, filling shoes left empty since John O'Keeffe departed last year. Reilly will take up that role in May, moving from McCann Worldgroup where he has been creative chairman since 2014. Previously he spent a decade at Crispin Porter & Bogusky when that agency was at its peak. WPP said in a statement that Reilly will work with CEO Mark Read and the leadership of WPP's individual agencies to "champion creativity within and beyond the company, fostering a culture that delivers extraordinary work to WPP's clients. He is also tasked with attracting and nurturing the best creative talent, driving inclusion and diversity in creative work and teams, and working with technology partners to fuel the creativity needed for their platforms."
Adbrands Daily Update 30th Nov 2020: WPP launched an unsolicited offer to acquire all the shares it doesn't already own in WPP AUNZ. Currently the British group has 61.5% of its Australian counterpart, which was itself created from the partial takeover of what was originally local group STW. A statement from WPP cited "the current level of economic uncertainty in the regions in which WPP AUNZ operates" and their "weak trading conditions". However, said WPP, "our ability to deploy resources and assist the business is limited by the current shareholding structure. We believe that we are best able to support WPP AUNZ in maximising its potential by moving to 100% ownership." It has offered A$0.55 per share in cash, a premium of a little over a third above WPP AUNZ's current undisturbed price, and more than two-thirds above the average price over the past six months. The Australian group said it is considering the proposal and will respond in due course. [Updated 17th Dec: WPP AUNZ agreed to recommend the buyout to shareholders after WPP raised its offer to A$0.70 per share, valuing the Australasian business at A$717m.]
Adbrands Daily Update 29th Oct 2020: Like other groups, WPP reported significantly improved figures for Q3 than in the previous quarter. Yet, there was still a decline of -7.6% in like-for-like net revenues. The reported figure was £2.4bn. "VMLY&R continued to be the best performing global agency, and was down only slightly year-on-year," said CEO Mark Read, "while GroupM recovered strongly as client media expenditure picked up." In the PR division, "BCW and H+K are both recovering well". An important save, also announced today, was the retention of the global Walgreens Boots Alliance integrated account worth almost $600m in billings. Regionally, the decline in Western markets was down to single-digit percentages: North America was -5.1%, Western Continental Europe was -5.5% and the UK -6.5%. The best-performing region overall was Central & Eastern Europe, down only -2.7%. However, China and India - two of WPP's top five markets - were both down by over -16%.
Adbrands Daily Update 27th Aug 2020: WPP brought the half-year reporting season to a close with figures that were perhaps better than might have been feared, at least on the topline. The like-for-like decline in revenues - WPP's version of the organic figure reported by other groups - was -15.1% in 2Q, putting the British group in the middle of the peer table in terms of performance. Reported revenues were £2.3bn. Regional performance varied widely, with Europe as a whole especially badly hit. The UK alone was down -23.3% LFL, but France and Italy fared even worse at -27.9% and -29.9% respectively. However, those figures were offset by a less dramatic slump in other countries in Europe, so the final figure for Western Continental Europe was -18.8%. The US fell by -9.6% and Asia Pacific slumped -14.0%. CEO Mark Read remains confident that "the worst is behind us", but he also seized the opportunity to push through a mammoth £2.7bn impairment and depreciation charge. That included a £1.07bn impairment against the value of Wunderman Thompson and £472m against VMLY&R, though he also said that the latter agency had been one of the group's strongest performers in the half as a whole, only marginally negative in terms of LFL performance. H&K Strategies, AKQA and Geometry also received mentions for better than average performance in the half. However, the impairment pushed the group into a net loss for the first half of £2.6bn. With all results now in, Interpublic was the least worst performer among the big groups with an organic decline of -9.9%, followed by Publicis at -13.0%, WPP at -15.1%, Dentsu at -17.3%, Havas at -18.3%, Omnicom at -23.0% and MDC trailing with -26.4%.
Adbrands Daily Update 7th Jul 2020: In a further - but less dramatic - consolidation of its agency assets, WPP announced the merger of three of its smaller PR agencies, headquartered respectively in London, Duesseldorf and Washington DC. Corporate and financial communications firms Finsbury and Hering Schuppener are to combine with public affairs specialist Glover Park Group under the banner of Finsbury Glover Hering. At the same time, WPP will transfer a sizeable proportion of its own shares in the business to around 100 senior managers, ending up with a slim majority of just over 50%. Previously it had owned all of Finsbury and Glover Park, and a 56% stake in Hering Schuppener. The merged business will have fee income of around $200m, putting it among the Top 15 PR agencies globally, according to industry watcher PRovoke. Finsbury founder Roland Rudd and Glover founder Carter Eskew will co-chair the new firm, with Hering Schuppener's Alexander Geiser becoming CEO.
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