It’s taken seven months of review, and a few hints here and there about its future, but now WPP has announced its blueprint for a future under Mark Read, the man who replaced Sir Martin Sorrell.
The plan includes shedding 3 500 jobs worldwide, a £300 million restructuring, the merging of some of the advertising giants businesses, and the shedding of others.
“We describe our approach as ‘radical evolution’: radical because we are taking decisive action and implementing major change; evolution because we will achieve this while respecting the things that make WPP the great company it is today,” Read said in a press release announcing WPP’s turnaround plans.
Sorrell isn’t keeping quiet over his successor’s strategy, lambasting WPP for destroying brands such as Y&R and JWT. “I don’t think creative people are a bunch of bozos you should get rid of. My view was make it ‘Y&R – VML’ make it ‘JWT Wunderman’, that always been my view if you’re going to do that because I do believe in the strength of these brands,” he told Mumbrella Asia. [The merged companies are called Wunderman Thompson and VMLY&R.]
Sorrell still has a 2% stake in WPP, and critics have lashed out at him for being “disrespectful”. Speaking to This Is Money, The & Partnership’s Johnny Hornby said Sorrell “talking down” WPP and Read was “… disrespectful to them and makes him look small”. Hornby said when Sorrell left WPP “the company badly needed a change of direction and strategy that Martin had not delivered and he should allow Mark to get on now unhindered”.
Now WPP has shed light on that strategy in what it called its “three-year plan of ‘radical evolution’ to deliver improved performance”.
“The strategy reflects a new vision for WPP as a leader in creativity and technology,” it said in a press release. “It incorporates a simpler, improved offer designed to capture the opportunities of a changing marketplace, and a streamlined structure built around the needs of clients. It also includes additional investments in creativity, technology and talent to enhance WPP’s proposition to clients and drive top-line growth.”
Read said it was clear what clients wanted from WPP’s group of companies: “They want our creativity, and they want us to help them transform their business in a world reshaped by technology. This is at the heart of what we do,” he sai.
“We are fundamentally repositioning WPP as a creative transformation company with a simpler offer that allows us to meet the present and future needs of clients. This more contemporary proposition has already helped us to win new business, including Volkswagen’s creative account in North America.
“The restructuring of our business will enable increased investment in creativity, technology and talent, enhancing our capabilities in the categories with the greatest potential for future growth,” he said. “As well as improving our offer and creating opportunities for clients, this investment will drive sustainable, profitable growth for our shareholders.”
Bloomberg hailed the plan as being a “step in the right direction”, but pointed out that it was a “smaller one than investors might reasonably have expected”, said the business wire’s Alex Webb, adding that this “makes WPP’s effort look a little disappointing”.
The positives, said Webb, were that Read had structured the strategy quickly, and that he’d “accelerated efforts to fix some of the biggest problem children: The North American creative and health-care units, which collectively account for 23 percent of sales, have become a drain on earnings, so he’s combining the divisions”.
And, Webb added, his strategy with creative, which had been sluggish at best, seems sensible. “He’s combining two digitally focused agencies, VML and Wunderman, with two creative agencies, Y&R and J. Walter Thompson, to form new entities which can foster the close collaboration that’s been sorely missing from WPP”.
WPP’s future offer will cover four areas: communications, experience, commerce and technology. Each of these areas is critical to success for modern clients, and by bringing them together the company will better serve clients’ needs as they react to the changing marketplace, and expand WPP’s own business in high-growth sectors.
- Communications focuses on advertising, content, media, public relations and public affairs, and healthcare.
- Experience reflects the growing need of clients to create new brand, product and service experiences.
- Commerce allows WPP to expand its growing omni-channel commerce business and its work with brands to help them succeed in marketplaces such as Alibaba and Amazon.
- Technology underpins WPP’s work with both CMOs and CIOs to build and operate marketing technology that supports their consumer- and customer-facing activities.