Insights
Industry
People
Culture
Brand Studio
Facebook Hub
Choueiri Group Deep Dives
OMD Corner
LEAD with ABG
Insights
Brand Studio
Facebook Hub
Choueiri Group Deep Dives
OMD Corner
LEAD with ABG
ABOUT US
CONTACT US
ADVERTISE WITH US
Insights Industry
Back
Break-up or take-over: what’s next for WPP after Sorrell’s exit?
By Communicate StaffFri, Apr 20 2018

Contact
break-up-or-take-over-whats-next-for-wpp-after-sorrells-exit

The beginning of April 2018 saw an investigation being launched into advertising legend and WPP chief Martin Sorrell over undisclosed alleged “personal misconduct.” Just a few days later, Sorrell stepped down as CEO and now WPP is on the hunt to fill his shoes.

Why WPP is now vulnerable

WPP looks vulnerable at the moment not only due to Sorrell’s departure but also because of its financial performance. WPP posted a 0.9 percent organic growth in 2017 versus 1.9 percent for its peers, and has the weakest outlook this year compared to its competition, Goldman Sachs noted.

Sorrell’s sudden exit also rattled investors with WPP’s share price falling 6.5 percent on the London Stock Exchange on the first day of trading since WPP announced his exit.

Break up or take over

 Financial analysts are speculating that WPP could start selling off businesses in the wake of Sorrell’s exit. “Sir Martin could arguably be called the glue that bound much of WPP together. With his departure, we think the chances of significant chunks of the business being sold off have dramatically increased,” analysts from UK-based Liberum Capital Limited stated in a report.

READ: Ex-GroupM Chairman Irwin Gotlieb’s plans for the future – and a little something on industry mistrust

French-based equity research provider Natixis added: “WPP now looks even more likely to be broken up or taken over.”

Its market research business, mainly Kantar, is believed to be most vulnerable by analysts. Liberum suggested Sorrell was the main supporter of keeping market research providers within WPP. But now that he is gone, firms like Nielsen could emerge as buyers. Kantar “has been a notable drag on organic growth in recent years,” Goldman Sachs analysts reported, noting that it achieved just 0.2 percent growth from 2014-17 compared with 2.6 percent for the rest of WPP.

Meantime, consultancies such as Accenture, which have sought to bolster their marketing services offerings, could show interest in WPP’s creative, media and digital holdings, Natixis reported.

Enter Omnicom

During Omnicom Group’s first quarter earnings call last week, CEO John Wren weighed in on the possibility of acquiring WPP assets should they come up for sale – and spoke about his former competitor Martin Sorrell.

READ: All you need to know about Publicis’ global e-commerce capability

“In many ways, I have a great deal of respect for Martin,” Wren said, responding to a question from a Morgan Stanley analyst on whether Omnicom would be interested in WPP assets if they came up for sale. He also remarked he had competed against Sorrell for the last 25 years.

When asked if some of WPP’s assets would shake loose, he said he wasn’t “much help when it comes to answering that question directly,” but he did say that the companies predicted to be sold don’t really interest Omnicom.

In terms of Kantar and other names “being bantered about, that’s not a key focus for our acquisition,” he added without mentioning what would be a focus, or if indeed there was one.

RELATED TOPICS
Martin Sorrell Wpp
MORE IN Industry
Industry
November 01, 2020 How to Build a Winning Gen Z Strategy on Mobile

App analytics and market data company, App Annie, have released a new report that sheds light on Gen Z’s mobile behavior, in order to help marketers develop effective strategies to reach them. 98% of Gen Z report owning a smartphone, on average receiving their first at the age of 10. They are also part of […]

Industry
October 28, 2020 Micro-Influencers Are Still an Important Channel in the Marketing Funnel

Experticity, the world’s largest community of influential category experts have released a new study that sheds new light on the importance of micro-influencers on the average consumer. The study was conducted with online interviews of more than 6,000 individuals from the United States drawn from Experticity’s micro-influencer network and the general population. In addition, more […]

Industry
October 28, 2020 Global Media Insight Report Provides Concise Picture of Media Trends in UAE & KSA

Market research companies eMarketer and Global Web Index have collaborated together to release the 10th edition of the global media intelligence report. The report is a detailed compilation of data and insights about internet users’ traditional and digital media usage in 42 key markets worldwide. Communicate will be highlighting the key trends that are shaping the […]

Industry
October 27, 2020 Socialbaker’s New Report Highlights Slow Return to Normalcy in Digital Space

Social Bakers, a global AI-powered social media marketing company has released the Q3 edition of their social media trends report. The report reveals where the industry is currently standing with regard to spending and engagement globally. Here are the key findings – ADVERTISING Worldwide ad spend increased by 56.4% in Q3 compared to where it […]

Subscribe to

our newsletter.

This site uses cookies: Find out more.

Logo
  • Insights
  • Industry
  • People
  • Culture
  • Brand Studio
  • Facebook Hub
  • Choueiri Group Deep Dives
  • OMD Corner
  • LEAD with ABG
  • About Us
  • Contact Us
  • Advertise With Us
  • Privacy Policy
  • Disclaimer
NEWSLETTER

Get a monthly round-up of Communicate's best insights

© 2020 communicateonline.me
About Us
Contact Us
Advertise With Us
Privacy Policy
Disclaimer
icon
icon
icon
icon
icon
© 2020 communicateonline.me