Martin Sorrell (as he then was) built WPP into a £22bn advertising behemoth by buying big agency brands (JWT then Ogilvy then Y&R then Grey) in the days when they planned and bought media as well.
Now they don’t the focus of the company has shifted considerably with its GroupM media trading operation (acting for Mediacom, MEC, Mindshare and Maxus among others) now the world’s biggest media buyer. It also has a rapidly growing programmatic box of tricks called Xaxis. So WPP has become, in essence, a media company.
Around the edges Sorrell (below) has made a number of investments in media owners including Shane Smith’s Vice Media and, most recently, France’s LNEI which owns stakes in Le Monde and the French edition of the Huffington Post, among others. This sets it apart from its marcoms rivals apart from Dentsu in Japan, and we all know the tangle it’s got into this rather opaque world.
The big talk of media land is AT&T’s $85bn bid for Time Warner, which Donald Trump says he’ll block if he win the US presidency. Time Warner has been here before, of course, when it sold itself to AOL in another massive deal which rapidly unraveled.
Sorrell’s WPP punches above its market capitalisation weight in this world ($27bn against $85bn) because it supplies a big share of the ads on which these fancy media valuations depend. Now Sorrell, speaking to analysts about WPP’s Q3 results, has entered this debate too. Speaking about the AT&T bid he said it could be seen as a big opportunity for “addressable” TV advertising, the ability to target different ads or groups of ads (adpods) at different households or even individuals.
He then added: “We will be announcing an interesting joint venture with two other companies bigger than ourselves in short order on addressable TV, so there’s a big opportunity there.”
Now who might these be? There aren’t many companies in media bigger than WPP. Facebook and Google (Sorrell’s fabled ‘frenemy’) are but they sit on the edge of the market marketplace, profitably tilling their own so-called walled gardens. They’re not into TV advertising. Neither, so far anyway, is Apple. One company that is is Rupert Murdoch’s 21st Century Fox, valued at nearly $50bn (Britain’s ITV is worth less than $10bn). Fox also owns a big chunk of Sky.
Sorrell and Murdoch are old pals. Years ago they were both traveling on the same Concorde which hit a spot of bother before returning to the UK. Imagine the sighs of relief when they landed safely. Anyway, Murdoch will be wary of AT&T spending its wall of cash in the media market. No doubt we’ll find out who the two companies are soon.
This just might be the transformational deal to mark Sorrell’s final decade in charge of WPP. It may have started as an agency business but is almost certain not to end up as one.