Here’s what you need to know about WPP’s JWT-Wunderman merger

In the latest in a wave of changes at the world’s largest holding company, WPP is merging J. Walter Thompson with Wunderman to create Wunderman Thompson. The news of the change comes two months after WPP announced the merger of legacy shop Y&R with VML.

WPP’s new CEO Mark Read announced the news in a memo yesterday, saying the combined shop will be a “creative, data and technology agency built to inspire growth for its clients”.

Wunderman global CEO Mel Edwards becomes global CEO of the combined agency, with JWT global CEO Tamara Ingram becoming chairman of Wunderman Thompson.

Read has spoken about simplifying WPP’s structure for its clients, and Edwards said this will help in that regard.

The two shops share some major clients including Shell and Johnson & Johnson, and together as a combined entity will employ more than 20,000 people in 90 markets.

“When we looked at Wunderman and JWT together, the common ground was so many of our clients. … Which I didn’t realize until we sat down and looked at them,” Edwards tells Ad Age.

She adds that Wunderman is often competing against consultancies in pitches, and says the creative firepower of JWT will help them stand out.

Wunderman Thompson’s Mirum and Possible, she says, will remain brands within the agency for now.

“What it isn’t is a takeover; it’s very much a merger,” Edwards says. She notes that both agencies bring about 10,000 employees each, “so straightaway that feels very equal”.

Recent performance, however, hasn’t looked as equal: Wunderman, the marketing services group, saw 2017 worldwide revenue grow 3.5 percent to $1.63 billion from $1.58 billion in 2016, according to Ad Age Datacenter estimates. JWT’s 2017 worldwide revenue fell 9.3 percent to $1.34 billion from $1.48 billion a year prior, according to Datacenter estimates.

The holding company has said its creative agencies have stumbled of late, with Read saying in its latest earnings call, “We need to have stronger businesses with better work, better strategy, better reputations as well as ensure that those companies have the capabilities that they need to grow.”

JWT was founded as Carlton & Smith, New York, by William James Carlton in 1864 and was renamed J. Walter Thompson Co. when James Walter Thompson bought out Carlton in 1878. Thompson himself organized the first national media buy with a “List of Thirty Select Magazines.” The agency became the first U.S. shop to expand overseas in when it opened an office in London in 1899.

Wunderman, launched as Wunderman, Ricotta & Kline in 1958, quickly became one of the largest direct marketing agencies in the world. The agency and its founder, Lester Wunderman, are credited with coining the term “direct marketing” – as well as inventing several techniques of the trade, including magazine response cards, free-standing newspaper inserts and direct-response TV spots featuring toll-free numbers.