Hogarth to service all of WPP’s client production work in ‘horizontal’ strategy
Australia’s largest marketing group, WPP AUNZ, has announced production business Hogarth will now assume all of the group’s production responsibilities, cutting other agencies and providers from production work.
In the group’s annual report released today WPP AUNZ’s CEO, Mike Connaghan, said Hogarth will be set up as a “horizontal” business to service their clients’ production needs.
WPP AUNZ’s agency diagram
“Horizontality is the single most important idea in our company. Horizontality will help our group to continue growing. The market we face is tight and ever changing. Our large scale means we don’t have the luxury of coming off a small base or miraculously finding lots of brand new clients.
“Pleasingly more and more clients are open to the notion of simplifying their own marketing structures.
“Pressure is on clients to drive return on investment like never before, and certainly our group can help them get more of their money ‘on the street’ and help them reduce complexity and make their marketing dollars work harder.”
WPP’s creative agencies include AKQA, Ogilvy, JWT, WhiteGREY, Y&R and Spinach.
The holding group has been through a series of changes in the past year beginning with the consolidation of The White Agency and Grey Group Australia to form WhiteGREY.
WPP then brought Hogarth into Australia three months later in July.
In November, WPP merged two of its media agencies GroupM and MEC, to create one new agency Wavemaker.
Meanwhile, joint-CEO of WhiteGREY Paul Worboys resigned in February earlier this year as his counterpart Miles Joyce exited just weeks later.
WhiteGREY later announced Lee Simpson, the former managing partner of M&C Saatchi, would take the helm of the agency.
That same month, Tania Kullmann resigned as the CEO of WPP’s research agency Kantar.
Just one month later, in March, the holding group saw another CEO depart as Phil McDonald left as the CEO of creative agency Y&R “effective immediately”.
Shortly after, the former CEO of Leo Burnett, Pete Bosilkovski was announced as McDonald’s replacement and the new national CEO of Y&R.
Chairman of WPP AUNZ, Robert Mactier, said more consolidations can be expected.
Mactier says more consolidation can be expected
“We will move more quickly in 2018 to continue to implement changes in how we go to market and to consolidate businesses where it makes sense to do so, such that we enable the strengths of the WPP AUNZ platform to come to the fore.”
Mactier also said share ownership will be increased amongst WPP AUNZ employees.
“A key objective for the Board in 2018 will be to increase the ownership of WPP AUNZ shares amongst our employees. This is part of various share ownership programs and performance incentive schemes that we have been developing in order to retain the best people in the market and create a culture of ownership within the group.
“There will of course be costs associated with this but we are confident that they will be more than outweighed by the longer-term benefits.”
In February, WPP announced its yearly results reporting flat revenues of $869.9m while taking a hit in overall revenue for its public affairs and public relations arms.
It’s PR and public affairs arm, which includes Ogilvy PR, Cannings Purple, Hill + Knowlton Strategies, PPR and Pulse Communications, fell by 7.2% for 2017.
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“A key objective for the Board in 2018 will be to increase the ownership of WPP AUNZ shares amongst our employees.”
Everyone will get shares instead of promotion or raise. #Horizontality
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I take this pace of change indicates that business conditions have deteriorated dramatically ?
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Given that all creative agencies rely on the profit margins associated with production, you can be sure that there will be a helluva lot more agency consolidation.
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I’ve noticed that Rob, the Chairman, has had a lot more to say recently.
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Horizontality? As in lying down? On the job? Utter tosh.
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