WPP’s negative growth in Q3 seems to be mostly about GroupM’s performance in the US, so winning PayPal’s global media account will be welcome news for the UK-based communications group.
GroupM is mostly made up of the big three media agencies – EssenceMediacom, Mindshare and Wavemaker – which are currently being moulded into a more simplified operating model targeted at creating back office efficiencies.
It’s a less radical change than that inflicted on their creative WPP siblings VMLY&R and Wunderman Thompson (now merged as VML) but nonetheless will contribute significantly to the £100m savings goal. WPP CEO Mark Read referenced his predecessor Martin Sorrell’s “30 years of inactivity” in an interview with Campaign, as myriad acquisitions were never fully integrated into the group.
To be fair, technology wasn’t really an issue when Sorrell got started, and it seems that Read’s cost-cutting is as much about the future as the present. Any ongoing investments can now be made just the once and applied wholesale.
PayPal has clearly bought into the narrative. Its CMO Leanne Sheraton said “With over 431 million active accounts globally, our customers’ needs and behaviors are changing quickly. Together, we will partner to grow PayPal from an online payments leader to reimagining the many ways PayPal will empower our customers to thrive in the global economy.”
Havas previously handled most of the European business, while the rest was shared between Dentsu’s iProspect and Publicis Groupe’s Spark Foundry.
PayPal’s budget was more than £90 million last year, although tech spend overall is shrinking – 13% down in Q3 for WPP. Meta, worryingly, announced another 24% cut in marketing budgets this week despite revenues up 23%.