Why does WPP want to invest in a podcast company?

WPP bought a stake in New York podcast firm Gimlet for £3.8m the other day (clients include Google, Ford and ebay), as it does.

But the Evening Standard’s This Is Money helpfully reminds us that this is WPP boss Sir Martin Sorrell’s 33rd deal of the year, about one a week. This is far in excess of any of WPP’s rivals, even new kid on the marcoms block Accenture Interactive.

What’s the point in such a stake in a podcast company?

WPP has numerous stakes in media companies and in some respects is a media company itself. Among its other activities, GroupM helps to finance TV shows in the UK and US, often in return for airtime. That kind of makes sense – but a podcast company?

Having fingers in a lot of media ventures no doubt gives you influence (is that such a good thing?) but it doesn’t begin to match the influence that really big players like Google and Facebook have. I tried to sign into Facebook earlier today (I thought it was about time I showed a little interest) but it wouldn’t let me, disagreeing with my date of birth – what do I know? But there’s nothing I can do it about it. As far as Facebook and its two billion subscribers are concerned I don’t exist.

That’s the sort of power Sir Martin (below) can only dream of.


WPP’s growth has ground to a halt this year (more or less in line with the market) and acquisitions boost growth, only temporarily in many cases. But if you make enough of them, often enough..

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Critics of WPP say this is not unlike a scheme where you keep adding money from new investors to pay out the ones who leave. When the flow of new money/deals stops, then trouble starts. Conglomerates through the ages have been accused of same. Many of them no longer exist.

WPP is also fond of share buy-backs, which enhance earnings per share as then there are fewer shares in issue. EPS is a major factor in Sorrell’s annual bonus.

So there are lots of questions being asked about WPP: is it a rambling construct dependent on financial engineering or, better perhaps, the equivalent of a giant marcoms investment trust. Even that doesn’t suggest an attractive underlying strategy.

It has great brands, of course, amidst all the countless other bits, and these brands make money. But, at some stage, under Sorrell or not, it will have to rationalise.

Now all this may be an instance of making a mountain out of a podcast. But all giant companies at some stage have to restate their strategy and, quite often, reshape themselves. Is that day dawning for WPP?

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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.

3 comments

  1. Steven… Welcome to the club. I too am banned from Facebook. Just ‘cos I say “fuck” all the time. Fucking wankers.

  2. Correction… Stephen… Must be the breakfast beer. Fuck it.

  3. Guess that’s it then George for the two of us.

    Anyway, does not being Facebook friendly make any difference to your life?

    Warm regards

    S

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