WPP faces crucial shoot-out with Aegis for £106m L’Oreal

L’Oreal is reckoned to be the UK’s fifth-biggest advertiser and now it’s reported to have cut the shortlist for its £106m media account down to just two – WPP, which handled the business through Maxus, now merged with MEC as Wavemaker – and Dentsu Aegis Network.

Which means that Publicis and indie the7stars – which did well to get on the list – have been dropped.

L’Oreal is almost unique among global giants for preferring to appoint its media agencies locally, hence the7stars on the pitch list presumably.

When WPP decided to merge Maxus and MEC it took a risk with two of the UK’s biggest media accounts: L’Oreal and BT. BT moved into Essence, WPP’s relatively new digital media specialist with former Maxus UK boss Nick Baughan moving over to head Essence. Baughan was also key to L’Oreal at Maxus. But Baughan left last year to join Facebook as director of agencies.

WPP’s travails started in earnest in 2016 when it lost AT&T in North America (reckoned to be worth $100m in income) and £2bn billing VW globally. MEC’s loss of AT&T triggered the merger with Maxus.

The L’Oreal pitch is UK only but new WPP CEO Mark Read will be only too aware of the consequences of losing another share price-moving media account.

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