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L’Oreal media departs WPP for Publicis

£220m account loss poses problems for media agency line-up

Holding company bosses are always quick to tell you that a big account loss “only” accounts for a (surprisingly) small account of their revenue, while dutifully trotting out the strength of their new business book in better times.

EssenceMediacom X in the UK (‘X’ is the part of Mediacom handling conflicting accounts) has just reportedly lost L’Oreal UK and Ireland, one of its biggest accounts, to a bespoke offer from Publicis Media in a pitch also including Omnicom’s Manning Gottlieb OMD. L’Oreal (a massive worldwide advertiser spending about £12bn on advertising and promotions) appoints agencies by country. It spends an estimated £220m in the UK and Ireland, big enough to boost or make a dent in anyone’s numbers.

EssenceMediacom is also repitching for Sky, a similarly vast spender and, even though it’s still the biggest UK media agency by a distance its billings fell last year and it certainly won’t want to lose two such flagship accounts.

So is it crisis time at the once all-conquering media agency? It certainly will be if Sky moves to another holding company but the L’Oreal loss (L’Oreal was originally with the late-lamented Maxus which was rolled into another WPP agency Wavemaker) will add to fears that WPP’s decision to put digital specialist Essence on top of much larger Mediacom was a mis-step (as they say these days.)

WPP has already acknowledged that it’s struggling to simplify its media agency offering through GroupM worldwide even though it’s substantially thinned down its number of brands (at one time including MEC and Maxus, now Wavemaker, alongside Mindshare and Mediacom plus newbie Essence.)

WPP CEO Mark Read’s overriding strategy has been to simplify WPP via internal mergers: on the creative agency side rolling Wunderman Thompson and VMLY&R (themselves mergers) into one VML. Media agencies have proved stickier (there’s no guarantee the creative shuffle will work either.)

There’s a lot riding on the ultimate destination of long-term media agency client Sky.

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