On August 29 WPP boss Sir Martin Sorrell (left) will announce his company’s half-year results although it’s likely that most of the questions he fields will be about the Publicis/Omnicom merger that has suddenly confounded his strategy of being the biggest marcoms company in the world.
WPP will be reporting about a month after most of its rivals, giving rise in certain quarters to suspicions that the numbers will be buffed up to show that the ‘new’ WPP strategy – to grow organically (there’s not much left of any size that WPP can now buy) – is working.
But the anecdotal evidence seems to be that it is working and it’s media that’s driving the strategy.
WPP’s MediaCom, now pretty conclusively the star performer among WPP’s big media agencies (the others are Mindshare and MEC, go-go Maxus is still smaller) has just won Siemens’ global media account from about-to-be PubliCom’s PHD media network, following fairly hard on the heels of pinching another big PHD client Sony Mobile.
Which is great for WPP/MediaCom but another sign that PubliCom has a lot of work to do to make its media offer competitive with WPP, no matter how much bigger it is in whole group turnover. Publicom’s gaggle of media agencies now includes OMD (the biggest Omnicom network), PHD (which is still struggling to crack it on a global scale despite a stellar image in some markets), Publicis Groupe’s Starcom MediaVest and ZenithOptimedia (you might have a name problem with these two, boys, but you always have had) and a few smaller networks which seem to be floating around to no particular purpose.
It also has a stake in Eric Newnham’s new out of home agency Talon although that only operates in the UK for now.
Someone needs to get to grips with this lot, as WPP has with its formation of GroupM as a kind of holding company/chief negotiator for its media agency line-up.
Sorrell’s chatter post-results will mostly be about the portion of revenue coming from ‘digital’ (a third or more) and emerging markets (about the same). But that will rather disguise the fact that WPP is, increasingly, a media company.
Yes, it still has numerous creative agencies – chiefly Grey, JWT, Ogilvy and Y&R – all of which make good money. But, in the greater scheme of things, these are looking a bit marginalised. To the extent that some commentators have suggested they might be spun off or sold.
That looks a bit drastic. In any event, big creative agencies can, to a degree, influence the choice of media agency too.
But, somewhere in WPP Towers, there will be discussions going on about, maybe, restructuring the company in some way to show that WPP is ahead of the curve rather than skulking in second place.
Sorrell has always had the capacity to surprise. Now that WPP isn’t the biggest – and therefore the company that fund managers wanting to bet on the global ad market feel they have to buy – a leaner, more focussed WPP may just be on the agenda.
