Well it’s already the biggest of a bunch also numbering Omnicom, Publicis Groupe, Interpublic, Aegis/Dentsu and Havas so what’s new about 2013?
According to an interesting piece in MediaPost, which has chosen to award WPP a new gong as holding company of 2012, the difference between WPP and its competitors is its various proprietary systems involving the trading and measurement of media – broadcast, online and out of home.
Thanks to heavy investment in technology and the boffins to run it – and a number of deals with research giant Nielsen, officially a competitor to WPP’s Kantar research operation – WPP now controls a big slice of the media trading market and the means to show clients whether or not their ads are working.
Now if this is WPP’s grand strategy – and it hasn’t said it is yet, officially – it does appear that WPP’s game is rather different to its rivals. They run client-based businesses while WPP (in media anyway) is a gatekeeper, clients have to use its services if they want to access fully the wonderful world of digital and some other businesses (like out of home) besides.
WPP’s ever-active boss Sir Martin Sorrell (left) devoted much of his first 20 years or so at WPP trying to dispel one notion about advertising companies – that their assets (people) went up and down in the lift – by insisting that these unruly individuals stuck to their contracts and didn’t/couldn’t take business with them.
Now he seems intent on changing the rules of a game which has always, until now perhaps, accepted that clients can move their accounts as they wish, usually because they’re new in the job. If WPP controls the keys to ‘consumer insight’ then you’d be a brave client to think you can do better elsewhere.
None of the other holding companies, according to MediaPost, can do this. They operate ‘open source’ systems that any agency or client (within limits) can use.
It’s an intriguing notion; it may account, perhaps, for the continued loyalty Sorrell shows to his Kantar research division which, although it’s the second largest in the world after Nielsen, still resolutely refuses to make money at the same rate as his ad agencies or media companies. But it does provides lots of the goodies to build the ‘insight’ pot of gold, most notably the Xaxis online database.
Of course this grand plan (it such it be) could be derailed by a number of things. clients could refuse to buy it, other holding companies or information providers outside the ad industry could counter it within a credible offer of their own. Publicis Groupe’s VivaKi media operation looks like the most credible challenger but it’s much smaller than WPP’s GroupM (in effect its media holding company).
Or CEO Sorrell could fail to resolves his differences with his shareholders over pay and leave; an extraordinary notion but it’s an issue that refuses to go away.
Or shareholders could tire of WPP’s ‘long game,’ wanting more immediate returns on the vast investment the company has made in becoming the biggest (mostly with borrowed money).
Maybe we’ll hear more of this when WPP, now in a closed period, announces its 2012 numbers.