WPP CEO Mark Read may be thinking back to 2016 as he contemplates two massive account reviews: Walgreens Boots Alliance is reviewing its across-the-board global deal with WPP up against Publicis as its three-year contract comes up while T-Mobile is running a pitch for its $2.1bn US media account following its merger with Sprint. WPP’s Essence is a T-Mobile media agency.
2016’s even bigger AT&T review put the skids under Sir Martin Sorrell’s WPP, compounded by the US Association of National Advertisers inquiry into undisclosed media agency rebates – which hammered media agency margins – and MediaCom’s loss of the $2bn global VW account. WPP subsequently merged AT&T loser MEC with Maxus to form Wavemaker.
So the loss of one massive account can have repercussions throughout even the biggest ad holding company; the prospect of losing two in succession is almost too horrible to contemplate.
WPP has begun a steady recovery under Read, winning some reasonably-sized accounts with his favoured formula of creativity plus technology, based largely on his successes as boss of Wunderman. Wunderman is now the lead element in Wunderman Thompson after the merger with JWT.
But Read has admitted that WPP’s media agencies, assembled in GroupM, were hit by spending cuts in the first part of 2020. They remain, though, by far the biggest employers (and therefore, presumably, contributors to revenue, in WPP as with the other holding companies.) Essence, often described as Google’s media agency, is the shiny new kid in GroupM.
So T-Mobile matters on all sorts of fronts. As for Boots, secured by Sir Martin Sorrell reportedly at Davos, its noises seem to imply that it’s been pretty happy with WPP although its own performance has stuttered recently. It does though seem to have bought into the currently fashionable data-is-everything mantra so Publicis boss Arthur Sadoun will be fielding his $4.4bn Epsilon acquisition as his pitch-breaker.
WPP’s Read will be hoping he doesn’t get a re-run of annus horribilis 2016.
This is an updated version of an earlier story. Publicis reportedly has the biggest share currently of T-Mobile’s US media business.