The contradiction at the heart of WPP

WPP is going through some huge changes, and in order to survive, the advertising giant will have to start believing in what it believes in, argues Jason Rose.

Last week, WPP’s group CFO reportedly instructed all managers globally to immediately cease hiring. The edict followed the biggest collapse in the company’s share price in 20 years after a spluttering start to new CEO Mark Read’s recently outlined turnaround strategy.

Read took over the world’s largest advertising group in April after the shock departure of WPP founder and driving force, Sir Martin Sorrell.

It’s an unenviable task given the increased competition for clients’ marketing dollars from consultancies like Deloitte and Accenture, the growth in often direct-to-advertiser platforms like Alphabet and Facebook and increasing interest among some clients to take advertising in-house.

No matter how brilliant Mark Read and his coterie of management consultants and financial analysts may be, WPP and its business model are in trouble. And the reason for that is only partly due to the competitive forces outlined above.

A key reason for WPP’s deep problems is simply that the group does not believe in what it believes in.

Within a couple of clicks of WPP’s homepage is an inspiring article titled A 20th Century Lesson for 21st Century Brands. It’s written by Jeremy Bullmore, the former Chairman of J Walter Thompson London and a current member of WPP’s advisory board.

In the piece, that was first published as an essay in WPP’s 2017 annual report, Bullmore laments the preoccupation of today’s companies and the marketers they employ with short-termism and their lack of commitment to nurturing their most important and enduring asset: their brand.

It’s an inspiring piece and it clearly maintains a prominent place on WPP’s website because of its ability to inspire the company’s current clients and to attract new ones. Yet it’s a commitment that WPP clearly does not live by.

VMLY&R anyone?

When WPP merged Y&R with digital agency VML earlier this year, it effectively conceded that the Y&R brand that was founded in 1923 and that was acquired by WPP in 2000 for USD$4.7b, was nothing more than a couple of letters separated by an ampersand.

That is the contradiction that lies at the heart of WPP and it is also why its ‘turnaround’ will do little to truly reinvigorate the company’s fortunes. The company espouses values, inspiring values, that it not only fails to live up to but also clearly doesn’t really believe in.

As I was reading about WPP’s faltering turnaround, I was reminded of the brilliant opening chapter of the book Truth, Lies and Advertising, ironically written by the former group planning director of WPP, Jon Steel.

In the book, Steel recounts a meeting with the legendary Steve Jobs in the late 1990s shortly after Apple re-hired him to turn around the company’s sagging business.

Steel tells of Jobs arriving late to the meeting and immediately booting a couple of Apple marketing technocrats out of the board room as punishment for boring everyone, including Steel, with a protracted PowerPoint snooze-fest.

Jobs then goes on to brilliantly communicate Apple’s strategy on a whiteboard.

It was a presentation that was simultaneously simple yet inspiring – sufficiently inspiring that it laid the strategic groundwork for turning Apple around and transforming the company into the USD958b behemoth that it is today.

Indeed, the campaign that this original meeting spawned was the brilliant Think Different campaign. When Apple spoke about its values in that campaign – and indeed in every campaign that it has run since then – there has been no doubt that it absolutely believes in and lives by those same values.

It’s a position and a commitment that continues to inspire literally millions of employees, suppliers, customers, journalists and investors as well as countless aspiring entrepreneurs the world over – seven years after Jobs’ death.

Jobs understood that a turnaround isn’t built in PowerPoint or Excel. It is built on being able to articulate and even more importantly to live up to an inspiring vision and set of values.

WPP is a different beast. It was and remains a brilliantly executed 1980s-style global consolidation play dreamed up by a very smart and ambitious finance guy. The only way WPP will meaningfully turn around its fortunes is by having the courage and the ability to believe in what it believes in.

There is a sceptical industry watching.

Jason Rose is an associate director of investment bank, Concept Financial Services Group.


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