Strong Aegis results highlight the perils of WPP’s big bet on research

At the moment it’s a losing bet too: with all the big marcoms companies having now posted their third quarter results WPP is lagging the field with organic growth of just 4.9 per cent, thanks in large measure to a 0.2 per cent decline in its consumer insight division, research to you and me.

Aegis, which has just disposed of its Synovate research division to Ipsos for a chunky £528m, posted organic growth of 11.2 per cent, in line with Interpublic’s overall revenue numbers but IPG benefited from the sale of its Facebook windfall. Overall, Aegis was 26.1 per cent up thanks to a string of small acquisitions plus Australia’s Mitchell Communications which cost it £200m.

It’s too early to credit the abandonment of Synovate for this but the results from Aegis, headed by CEO Jerry Buhlmann (pictured) who now founds himself the surprise darling of the City, do show the benefit of specialisation, in its case in media planning and buying through Carat and Vizeum and digital wizardry through Isobar. All its rivals cover the marcoms field, which means that at least one bit is usually a drag on results even as other sectors gain momentum, although Omnicom is more inclined to stick to its last than WPP or Publicis Groupe.

At WPP Sorrell is putting a brave face on things, saying life should be good in 2012 with the Olympics and the American presidential bandwagon, but that’s the same for his competitors too. He did admit that the performance of research, mostly through Kantar which includes researcher TNS which he controversially acquired for £1.1bn in 2008, was “not acceptable.”

In part he blamed this on the growth of online polling which he said was popular, because it was cheaper, but not as good as traditional ‘custom’ market research (people on telephones or armed with clipboards) in which TNS specialises.

But this is not really good enough from Britain’s most famous advertising knight. He does, after all, spend a large part of his time hymning all things digital. So why invest so heavily in something that isn’t?

Kantar boss Eric Salama (pictured), who’s been parachuted in to sort out TNS, must be ruing the day he agreed to abandon his comfy billet as strategy director on the WPP main board to take over ‘customer insight.’

And WPP shareholders, many of whom opposed the huge bid for TNS, ought to be making angry noises. But such is Sorrell’s sway that nary a squeak has been heard. So far at least.

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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.

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