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
Subscribers only: Adbrands profile
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.
Adbrands Daily Update 27th May 2020: Weeks after its peers, Dentsu finally published financial results for 1Q. With all results now in, surprise leader of the pack for 1Q was MDC Partners at 2.0%, while Omnicom and Interpublic both weighed in at 0.3%. Dentsu came next at -0.8%, followed by Publicis at -2.9% and WPP and Havas both on -3.3%.
Adbrands Daily Update 29th Apr 2020: The impact of Coronavirus on WPP was broadly in line with European counterparts. WPP reported a LFL decline of -3.3% in revenues less pass-through costs in 1Q. That's a little worse than Publicis and the same as Havas. All reporting regions reported declines. In terms of the group's Top Five markets, India was the only gainer, up 6.0% LFL. The US was down -1.9%, UK and Germany down -4.2% and -4.3% respectively, and China plunged -21.3%. France, Brazil and especially Italy were badly damaged, but Spain actually reported 3.8% LFL growth. Reported revenues less PT costs were £2.9bn, down almost 19% as a result of exchange rates and disposals.
Adbrands Daily Update 16th Mar 2020: WPP issued an all-staff memo on Saturday asking more than 100,000 employees to work from home "wherever possible". Although all offices will remain nominally open, unless otherwise ordered by each country's government, WPP said it "will take action to greatly reduce the density of people in our buildings and the amount of travel to and from work." Omnicom followed suit, moving to an official work-from-home policy from this week. In a memo to all employees, CEO John Wren said "We are asking for the support of our agency leaders to make certain our people work remotely and only essential staff go into the office. If you have not done so already, please ensure in the next day or so that you collect what you need to work from home."
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