New body blow for WPP’s EssenceMediacom as £250m Sky media follows L’Oreal to Publicis

Whoops – WPP and its troubled once-flagship media agency EssenceMediacom didn’t need this one. Sky media has ended its decades-long relationship with the agency (initially MediaCom) and moved its £250m plus European account to Publicis Media.

This is Publicis’ second big European win at the expense of WPP; in May it won L’Oreal media in the UK and Ireland. L’Oreal, another £100m plus account, was originally handled by Maxus which was absorbed into Essence and then EssenceMediacom as one of a series of WPP internal mergers.

WPP and its media operation GroupM have already acted to boost its offering with Brian Lesser taking over as CEO from Christian Juhl but Lesser is US-based and GroupM’s problems now appear wider. GroupM has also formed a revamped new business unit, mainly led by Wavemaker execs, but it’s looking rather little too late. Unilever is also reviewing its global media business at WPP’s Mindshare although Publicis is unlikely to be the danger here thanks to its strong relationship with P&G.

Why do previously all-conquering agencies like Mediacom suddenly go into reverse? The merger with Essence doesn’t seem to have helped (clients don’t like such moves as they often result in the loss of key execs in the cause of internal cost-saving housekeeping) while momentum is everything in pitches, especially when you’re defending. Publicis has outperformed its rivals across the board recently with only Omnicom hanging on to its coat tails. Both have invested heavily in data operations.

It’s certainly a poser for new GroupM CEO Lesser and his ultimate boss WPP CEO Mark Read. A big loss of billings usually means more cutbacks and, in this case, possibly more drastic surgery. But that, as we’re seeing, doesn’t always work.