WPP buys US tech agency Fenom Digital – is it time it broadened its horizons?

WPP has bought US-based Fenom Digital which describes itself as a purveyor of “transformative digital solutions for the age of human interactions.” Ecommerce in other words.

Fenom was founded in New york by Dylan Runne three years ago and now employs 190 people (not bad going) working for clients including Basset Furniture, Casper, Crocs, David Yurman, GNC, PacSun and Snipes. It works mainly via the Salesforce platform and will be rolled into ever-expanding Wunderman Thompson, WPP’s (mainly) tech arm.

WPP CEO Mark Read says: “Expanding our business in high-growth commerce areas continues to be a high priority for WPP as we enter 2023. The Fenom team brings a proven track record of success paired with deep industry expertise and I’m delighted to welcome them to WPP.”

From a business point of view this doubtless makes sense although it’s hardly one to set the. pulses racing. WPP has a problem in that it seems to be consistently undervalued by investors, according to some analysts at least. It’s currently valued at around £9bn, compared to a peak of around £16bn a decade ago.

Its focus on tech, while doubtless good business, probably doesn’t help at the moment as tech stocks have tanked spectacularly over the past year. They may not all be as mad as Meta/Facebook but the mud sticks.

WPP was built on first, big creative agency acquisitions – JWT, Ogilvy, Y&R and Grey – and then a raft of media agencies. There aren’t any of this scale still to buy even if WPP was so inclined but WPP could so with a sexy acquisition or two. Otherwise there’ll be a growing perception that it’s a tech services business primarily, lots of it in Wunderman Thompson. In such circumstances investors tend to think: break-up.