WPP’s Eric Salama moves in to shake up big market research buy TNS

Eric Salama, chairman and CEO of WPP’s giant research business Kantar, is also taking over from Pedro Ros as CEO of TNS, the research company WPP bought for £1.1bn in the summer of 2008.

Ros, a TNS lifer, is becoming non-executive chairman in place of Jamie Hall.

Salama, one-time director of strategy on the WPP main board, admits that TNS has not been “performing at the top of its game” and that the process of integrating it into Kantar and WPP has been too protracted.

TNS is WPP’s biggest-ever acquisition, joining the fold after a bitterly-contested battle with German research company GfK which agreed a merger with TNS (itself a merger between the UK’s Taylor Nelson and French firm Sofres) in May 2008.

WPP CEO Sir Martin Sorrell, eager to boost his Kantar research business, saw off his German rival with a bid which many analysts said was hard to justify. That was in July of 2008 and the world economy promptly headed into steep recession as the financial system imploded after the collapse of Lehman Brothers.

The purchase played a key part in driving WPP’s debt to over £3bn (it’s now around £2.6bn).

Research (or consumer insight as WPP prefers to call it) was the worst-performing aspect of WPP’s activities in the first quarter of 2011, growing by 3.4 per cent against double digit growth for advertising and 6.7 per cent growth overall.

Particularly weak, according to WPP, were North America, the UK and Western Europe, the latter two regions being TNS’ heartland.

So there seems little doubt that Kantar boss Salama has been brought in to shake up TNS and justify the premium price paid for the business. Unless WPP can significantly reduce its debt (and show that TNS was worth the money) shareholders will try to rein in boss Sorrell if he eyes any more major acquisitions.

Recently the company has bought Canadian agency Taxi and German firm Commarco, which owns Scholz & Friends, but neither of these deals are worth much more than £100m.

US operator Nielsen remains the world’s biggest research firm, chiefly because of its iron grip on the contract to measure US TV ratings.

TNS, which did the same job in the UK for many years, was clearly intended to give Kantar, which also owns Millward Brown and BMRB among other research companies, the heft to compete with Nielsen.

But first it appears to require a little surgery itself.

You May Also Like

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.