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WPP’s Sorrell thinks six holding companies is too many

WPP’s Sir Martin Sorrell has been strangely quiet recently – by his own voluble standards anyway – but he’s been regaling delegates at the Festival of Marketing in London as only he can.

Other speakers at the event include Monica Lewinski and an account manager from Truffle Social (whatever that is) so it’s a broad church.

So what did SMS have to say? That clients should invest more in innovation, advertising and branding. He would, wouldn’t he, but he’s probably right – pointing out that the top performers in WPP’s Brandz survey of most valuable brands actually got there by branding.

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And that WPP’s GroupM going to spend nearly $6bn with Google and $1.7bn with Facebook, because “search is more effective than social.”

But most interesting (for us anyway) was his observation that the six big marcoms holding companies (WPP, Omnicom, Publicis Groupe, Interpublic, Dentsu and Havas) would reduce in number, although he didn’t say which ones would merge or be bought.

“It is inevitable you will see further consolidation among clients, media owners and agencies. The industry is oversupplied. There will be more consolidation and the marketplace becoming more fragmented puts more pressure on agencies to consolidate.”

It nearly did, big time, three years ago when Omnicom and Publicis tried to merge. Sorrell said at the time that this particular deal would never work and he was right, although we don’t know whether that was hope or expectation.

The usual name in the frame is Interpublic, which Publicis tried, rather tentatively, to buy before it entered talks with Omnicom. Havas is much the smallest of the six but, now controlled by the Bolloré family, has a powerful friend in French media giant Vivendi, chaired by Vincent Bolloré who’s also the biggest individual shareholder. So Havas looks safe enough for now. Might Vincent be tempted to try to buy Publicis now that Maurice Levy is due to step down? Havas and Publicis combined would have a near stranglehold on the French ad market.

Sorrell hasn’t done a really big deal for a decade now although he’s done lots of small ones and entered a number of partnerships. The last one was buying market researcher TNS for £1.2bn in 2008. You can’t imagine him staying on the sidelines if one of WPP’s big rivals was up for sale.

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About Stephen Foster

Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.

2 comments

  1. He’s buying Interpublic. “Cos AdScam says so!

  2. It pains me to say this, but Interpublic might actually be better off under Sorrell.

    At least he knows the value of a consistent agency brand and how to manage his portfolio. Whereas IPG has consistently screwed this up for decades now. They buy, they fold, they force nonsensical mergers (Draft/FCB anyone?) and fail time and again.

    And what does Roth have to show for all those years of big, swinging dicking-about? Nothing.

    McCann is the only thing he hasn’t utterly fucked up. The rest of IPG is a shambles.

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