It’s not all rosy for Sir Martin and WPP as Kantar research operations lag advertising, media and PR

WPP’s Sir Martin Sorrell has been running around the broadcast studios this morning like the busy bee he is, trumpeting WPP first £1bn profits and record revenue of £10bn.

And jolly impressive they are too; WPP is now (fairly) comfortably ahead of Omnicom in the profit stakes with a billion pounds to a billion dollars and about the same distance in revenue. converted into dollars, WPP says turned over $13.8bn to Omnicom’s £11.4bn and, in euros, €11.55bn to Publicis Groupe”s €5.8bn (Sorrell will be particularly pleased about that).

But not everything is rosy in the WPP garden. Its giant Kantar research operation, second in the world top AC Nielsen, is still struggling to make any headway at all. Kantar increased revenues by a measly 1.7 per cent in 2011 compared to 5.9 per cent for the company as a whole (advertising and media were up by 12.2 per cent). Its share of group revenues fell from 26 per cent to 24.5 per cent although operating profits improved as a result of cost-cutting.

WPP’s last really big acquisition was research firm TNS Sofres for £1.1bn in 2008, just before the credit crunch struck. Since then the research business, led by former WPP main board director Eric Salama (pictured), has struggled despite numerous attempts to sprinkle some stardust on it, latterly through design guru Martin Lambie-Nairn.

Marcoms rival Aegis, owner of the Carat media agency, gave up the ghost with research last year, selling its Synovate business to French company Ipsos for £525m last year. Sorrell, some analysts might think, would be well-advised to do the same. Or at least spin off Kantar as a separate company; at the moment it’s holding back the whole of WPP.

But Sir Martin is never one to admit defeat. Kantar continues to make small bolt-on acquisitions and Sorrell is no doubt searching for a big deal to make it all come good. The biggest deal would be the contract to measure US TV audiences but Nielsen has this and it’s hard to see other big agencies agreeing to put a WPP company in charge of such important data despite its doubtless high professional standards.

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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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