Read outlines future for WPP: it won’t be a Sorrell-era financial holding company any more

Mark Read, who seems to be rather enjoying his role as the new face of WPP (just as well) regaled ISBA members with his views the other day and in the process let slip the new reality of WPP as he sees it.

Officially WPP under Read has become “a creative transformation company. We build better futures for our clients through an integrated offer of communications, experience, commerce and technology.”

Fair enough, but this is just guff albeit quite elegant guff.

At ISBA (left) he was mainly talking about people and how WPP needed to attract the best around by being a more open and diverse organisation: “If people are open it means they partner well. They partner well with clients, with Google and Facebook and they partner well with each other in the organisation.”

(All he needs now is to get rid of that pesky gender pay gap.)

But he also said: “I think we talk a little bit more about culture because when WPP was a financial holding company (our italics) it didn’t really have a culture, and I feel that WPP’s culture should reflect the culture of the companies inside the group.”

Ouch (if you’re a member of the old guard, founder and former CEO Sir Martin Sorrell in particular.)

WPP made great efforts under Sorrell to create a culture, spending heavily on internal and external PR. For the outside world the image it presented was of that of first among equals with the other ad holding companies and a big global player in the wider media universe, one that could sit at the same table as Google, Facebook and more traditional media behemoths like Rupert Murdoch’s Fox and News Corporation.

The job of the numerous agencies was to keep delivering the numbers to make this possible. Which is what the components of “financial holding companies” do – or else.

Read seems to be signalling a retreat from these grand ambitions. Read’s new model WPP looks very like an agency or, to borrow from Accenture with its combination of marketing services and consultancy, a “cagency.”

He probably has no choice. WPP is in retreat in financial terms, seeing its profit drop by a stonking 30 per cent in 2018 even as Google, Facebook and some of the cagency models – most notably Accenture Interactive – pile it on. WPP shares responded surprisingly well to what were pretty gloomy numbers (and no promises of imminent jam tomorrow) although at some stage Read needs to show a new growth formula.

That’s likely to remain elusive as long as WPP is burdened with so many legacy businesses and the real test of his management will be what he does with these. At the moment he’s trimming bits here and there and trying to incultate a bit more team spirit.

But whatever emerges won’t be a financial holding company (which WPP was for 30 years or so.) That’s a big change.