Being global has its benefits but WPP CEO Mark Read may be wondering about some of his far-flung empire, as WPP AUNZ, the business formed by the merger of Australia’s biggest ad group STW and WPP in 2016 (with WPP as the biggest shareholder) has just posted a loss of $253m.
This is big bucks by anybody’s standards, blamed by WPP AUNZ on “declining media spend.” If that’s the case it’s fair to assume the business was “highly geared,” as they say in the City.
WPP is also rationalising its agencies everywhere and this brings hefty restructuring costs – such impairment costs came to $294m.
But Australia is a notoriously difficult market for holding companies to crack. Others too, Aussie Dave Droga’s first foray outside the US was a big office in Sydney which crashed and burned. Sir Martin Sorrell, who engineered the deal with STW, had previously come unstuck when he tried to shoe-horn his Aussie agencies into a WPP-owned commercials production company. They weren’t playing.
Australians, clients as well as agency people, are notoriously un-keen on foreigners calling the shots. Don’t these ad holding company types watch the cricket?