WPP reports its full year 2018 figures tomorrow (March 1) with most analysts expecting a small reverse in growth compared to 2017 although not as bad as its disappointing Q3 2018 figures indicated.
Which will leave us with the two big holding companies making the most noise about “transformation,” in particular making technology central to their business – WPP and Publicis – lagging more traditional (or less noisy) rivals Omnicom and the industry’s stand-out performer Interpublic.
North America is where WPP and Publicis have come unstuck, suggesting that Omnicom and IPG’s support of their big agency brands over a pretty turbulent period has paid off. Under departed CEO Sir Martin Sorrell WPP seemed more interested in media buying, in particular its highly profitable (for a time) programmatic dealing while Publicis seems determined to turn itself into a consultancy.
New WPP CEO Mark Read has at least acknowledged that creativity remains important to the group – saying he plans to hire more creatives even as he closes offices and merges companies – but WPP has fallen behind the curve. JWT had become a shadow of its former self before it was merged into Wunderman and Y&R was in urgent need of a retread before it found itself shoehorned into VML, which still looks an odd move. Elsewhere in the empire Ogilvy under John Seifert seems to be undergoing a state of permanent revolution – all it needs is a chairman Mao-style Little Red Book (as opposed to David Ogilvy’s big ones.)
Which creates an interesting canvas for WPP’s newly-hired chief people officer (they used to be called heads of HR) Jacqui Canney (below) who’s joined from the same role at Walmart.
Canney, who also spent 25 years at Accenture as it grew into a global giant, says: “WPP has some of the best and brightest minds from around the world helping build better futures for the communities and clients they serve. I’m excited to be joining Mark and the rest of the team as they foster a culture that embraces change and invest in a workforce that believes in the power of creativity and technology to solve complex problems and transform industries.”
CEO Read says: “WPP is a company built on talent, and to do the best work for our clients we need to continue to attract the very best people. I am delighted that Jacqui is joining us to lead that effort. Jacqui is a world-class executive with an outstanding record of leading change at global organisations. She is also a passionate advocate of inclusive workplaces, and will play a central role as we create a strong new culture throughout WPP.”
WPP has had its cultural issues of course: the mayhem at JWT during the vexed reign of Gustavo Martinez and JWT London “discovering” it paid women markedly less than men. JWT London is also in the dock for allegedly firing middle aged white men because they were middle-aged white men. Sorrell was accused of a bullying culture at WPP HQ in London’s Mayfair, which he denies.
Whether or not a former Walmart executive is the most appropriate choice for such a task only time will tell. Big retailers are renowned for extracting the most from their workers without giving much back. WPP employees will hardly find such a background reassuring.
WPP shares are currently languishing at levels they last saw in the dotcom boom of 20 years ago, suggesting that the company has gone nowhere over that period. That’s harsh and many analysts expect them to recover over time with a target price of about £12 compared to under £10 today.
But it’s a clear indicator of the challenges Read and new broom Canney face. One of the attractive things about working for a big quoted company like WPP is the award of share options but there are many senior WPP types whose options are well and truly underwater. WPP will need to reward the ones it wants to keep with hard cash. Tricky in a low growth environment.
Read may announce that a buyer is in view for research operation Kantar tomorrow – although a £3bn valuation looks fanciful – and that will help. If no such buyer is in sight then it may signal another pounding for Read and co.