“Sir Martin Sorrell, boss of the world’s largest advertising group WPP, has been forced into a humiliating climbdown after failing to strongarm …” began a story in Friday’s London Evening Standard – and then, all of a sudden, it disappeared (from the internet anyway).
The subject of SMS’s alleged strongarming was, of course, UK broadcaster Channel 4 which was involved in a dispute with about the price and positioning of airtime with WPP’s GroupM, which handles negotiations for WPP’s gaggle of media agencies (Maxus, MediaCom, MEC and Mindshare) which account for about 30 per cent of UK media spending and roughly the same proportion of C4 revenue.
Clearly SMS objected to this spin on his company’s activities (and perhaps the suggestion that he personally was involved). Which rather gives the lie to the soothing noises emanating from both GroupM and C4 after the dispute had ended, when they tried to suggest that it was just one of those things and the relationship between GroupM and C4 would be ‘stronger’ than ever: “Negotiations are necessarily long and complex when two major media companies want to agree commercial terms in a complex and fast moving environment, but we were both very focused on getting things right for all parties.
“We look forward to building on our strong relationship and working together closely to deliver business and marketing success for all our mutual clients.”
The likelihood is that GroupM (in particular trading boss Mark Collins) now resembles a bear with a sore head. It chose to throw its weight around only to come to terms after just a week. In that time many of GroupM’s advertisers found themselves heading to rival broadcaster ITV, no doubt at premium rates. ITV’s January revenue is reported to be 11 per cent ahead of target, a huge amount in the tight UK airtime market.
So did GroupM back down? It certainly seems to have had little appetite for a protracted boycott. And did Sir Martin intervene personally? We don’t know, but he could surely see a PR disaster in the making and, possibly, a number of extremely disenchanted clients.
We wait to see if any changes are made at GroupM in the near future.