Peter Reid of MSQ: the WPP diet – cutting weight fast looks healthy, but are its arteries clogged?

At WPP’s last earnings call, the second since Sir Martin Sorrell jumped ship to avoid the plank, the Ogilvy-to-Kantar behemoth rebranded. The group became a ‘creative transformation company,’ whatever that means. earlier this week, addressing the bafflement that has rippled through adland since, new CEO Mark Read (below) took to stage at AdWeek in an attempt to shine a light on his new direction.

Unfortunately, to little avail; when questioned on his promise to invest an extra £15m in creative and his string of global mergers, he answered simply “I’m a believer in the WPP brand and the brands inside the organisation. Just, maybe, not four or five hundred of them.”

But how WPP successfully juggles its own ‘creative transformation’ in tandem with its proposed future focuses: communications, experience, commerce and technology without dropping any balls still remains to be seen.

Perhaps Sorrell can shoulder some of the blame for creating a machine with too many moving parts, of which Rube Goldberg would be proud. But when Omnicom and IPG both posted surprisingly good recent quarters, questions around what WPP is doing wrong have to be asked.

First, and this has been overlooked, Read may not have been the right man for the job. A long serving, long suffering, insider may know the lay of the land, but that is to WPP’s disadvantage. Indoctrination makes one precious about saving bits of the business that really should be disposed of. An outsider would have torn through the group with an objective, radical approach.

That is not to discredit the man — he has the toughest job in the game and is doing as good a job as he knows how. But the task of returning to sustainable long-term growth is without doubt insurmountable on the current trajectory. The business needs to be client-centric, addressing the needs of advertisers in the digital age. But it fails on two counts.

First, the VML/Y&R mash-up, or JWT/Wunderman ram-together, while certainly bringing together capabilities advertisers need under one roof, is as much about short-term cost cutting as it is ‘creative transformation,’ and it does not address the underlying fact that these businesses, and WPP proper, were never truly designed around today’s client needs. Clients no longer require an office in every country, no longer desire the top-down, slow-moving, hierarchical holding company model that thrived before the internet.

Second, is the sale of Kantar Media. It’s egregious short-termism designed only to placate weary shareholders by putting cash in their pockets.

It fails to ameliorate any underlying structural woes.

Any nutritionist will tell you that going on a diet needs to be supported by exercise. Cutting weight quickly may make the company look more streamlined, but it doesn’t make you healthier. WPP is achieving only the appearance of health while its arteries are clogged.

Creating a flexible, agile, digital, client-centric business from a sprawling holding company is never going to happen.

It’s not just WPP. Publicis Groupe, too is disjointed, it just receives less press. Each company blames cutbacks in ad-spending and competition from digital players and consultants.

But returning to an earlier point, Omnicom and IPG have also achieved growth. How? Do these issues not affect them? The former has succeeded due to new business success, the latter due to having something approaching a client-centric model.

And that’s the crux. Read is still behaving like a holding company. Inflexible, centrally-controlled and hierarchical – the polar opposite of how other industries are adapting. A one-size-fits-all approach worked for eighties FMCG brands, but will not suffice for lean digital firms which require advertising partners that reflect their own work, output and ethos.

Read can merge as many businesses as he likes, but if those firms do not fundamentally change the way they work to reflect client’s needs, it represents little but a distraction to keep the wolves at bay.

He can set as many half-year cost-cutting targets as he pleases. A return to growth requires more than short-term niceties. An old house is crumbling, and Read is renovating, hoping no one notices the lead pipe and asbestos.

Better to rip it down and start again.

Peter Reid is CEO of MSQ Partners.

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About Stephen Foster

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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.