WPP’s outgoing CFO Paul Richardson (below) has been giving delegates at a conference in Barcelona a peek under the bonnet of the stuttering holding company limo.
First off he’s confirmed that WPP plans to sell up to 80 per cent of its research unit Kantar, hoping to keep between 20 and 40 per cent depending on the price. Kantar has been valued at up to £3.5bn, which looks rather toppy as that’s close to a third of WPP’s current valuation. The reason for the sale is to reduce the company’s somewhat alarming debt to equity ratio.
More interestingly perhaps, he said that around a third of WPP’s business faces “structural challenges,” needing to move away from big global agencies to be closer to consumers, more agile and cheaper for clients. Presumably he means creative agencies although media agencies face some of the same challenges. Creative agencies will be combined with digital outfits he said, as has already happened with the takeover of Y&R by VML to form VMLY&R.
One such that always seem on the menu is JWT, currently embroiled in an embarrassing dispute at its London office with a number of white male creatives who’ve been made redundant complaining that this happened because they objected to remarks made by creative director Jo Cooper, to wit that the agency had too many of them.
JWT’s story, it seems, is that it had to make redundancies as clients cut back and, being largely full of such white males (who are paid more than women there), they had to go.
There’s a bigger story behind this, namely that creative agencies are increasingly working on a project basis (rather than the old agency of record arrangements that sustained them for years) and can’t afford big, permanent staffs when the projects may go elsewhere. A number of WPP agencies are cutting back and Ogilvy in the UK is offering all its employees voluntary redundancy terms.
A consequence of this is the increasing use of freelances, even for quite senior duties.
Advertising as part of the gig economy? You can be a creative director or drive for Uber. How times change.