Peter Reid of MSQ: why the sum of WPP’s parts are worth more than the whole

As WPP pivots its offering to reflect life after Sorrell, much has been made of the potential breakup of his sprawling empire, its data division, Kantar in particular. A sale of Kantar as well as some the treasure trove of smaller investments would no doubt be welcomed by many shareholders, signalling change and raising capital while shedding weight in the process.

However if WPP truly wants to reposition its model around its client’s current and future needs (as new CEO Mark Read has stated), there may be a better way to unlock the latent value within the group.

If there are two skill sets that clients of all sizes are increasingly demanding, it is greater levels of ‘creativity’ and ‘agility’ (to complement existing sine qua nons of great strategy, ability to understand audiences, and an ability to develop great content across all key channels). And it is hard to see how WPP, even shorn of Kantar, would be well placed to deliver this.

WPP has many assets. It has global platforms — which remain an advantage, even if scale is not the paramount asset of the past—and some great brands. It has access to best in class insights (through Kantar) and significant media buying power through GroupM. It even has pockets of great creativity within Ogilvy and in parts of JWT.

But with its current size and structure, it struggles to get teams from across disciplines to work together, let alone in any agile manner, and can’t replicate its pockets of creative success across entire international networks. Affiliations, incentive structures and agency locations all get in the way and reinforce an agency brand first mentality, and a culture of internal competition rather than collaboration.

A better strategy might be to separate out its agency brands (in some cases only acquired to manage conflicts) and set them free by selling them, or spinning them out as independent entities. For example, if the new integrated Ogilvy was combined with Wavemaker (or another media brand) would you not have the medium-sized player that the market is crying out for, that combines international scale and access to a full range of disciplines, with a culture that could breed both creativity and agility?

Similarly, adding Essence into the Wunderman/Possible nexus would create a powerful force for those clients looking for digitally-centric, performance marketing led comms. And even a combination between Grey or JWT and, for example, MediaCom, as a full-service agency at scale would offer clients something different. If these moves could be achieved, while still accessing the data of Kantar and scale of GroupM through preferred partner deals then the potential would be even greater.

Implementing such a radical change would clearly be a massive, perhaps insurmountable organisational and executional challenge. But if it were achieved, it would be a powerful way to deliver to the market the type of modern agency that clients are currently crying out for.

Peter Reid is CEO of MSQ Partners.

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One comment

  1. Putting creative and media back together would be a good start. An Ogilvy with Mindshare – back to O&M – is a step forward. Can or will Read move fast enough…?

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