WPP grows local revenues
Holding company WPP AUNZ has reported a slight half year profit increase to $49.1 million from its previous $47.2 million.
In the second financial results since the take over of STW, now badged as WPP AUNZ, the holding group attributed its slight revenue increase to consolidating its business portfolio and cutting costs.
Very different story to Enero Group – one grows while the other shrinks (and shrinks, and shrinks, and…..).
Well done Mike and team on a job well done!
Wasn’t that profit just the amount that you saved by cutting jobs? #wasitworthit
Digital media is not going to save a bloated behemoth like WPP doesn’t hold water. Substituting pennies for dollars- digital for print, radio and TV- is a rapid downward slide even if Facebook and Google weren’t the dominating forces in the industry.
Also, history would suggest that WPP does not do a very good job managing its acquisitions. If I were WPP I’d worry about the innovative, disruptive businesses poised to be the next Facebook.
Furthermore, WPPs supposed 2% organic growth is pretty much accomplished through downsizing rather than revenue growth. Check the agency consolidations within WPP and you’ll see a company racing to right-size itself to a shrinking business.
Then there’s the controversy regarding rebates and other non-transparent business practices. The Association of National Advertisers report finds them “pervasive” and WPP is at the center of it all. Clients are not happy.
Lastly and perhaps most importantly, there’s the issue of leadership. Who will steer the ship through these rough waters? CEO Martin Sorrell is a financial manager who has done a stellar job building WPP (aka, Wire and Plastic Products) by buying profitable companies and adding them to the holding company.
But Sorrell has never worked on the media side. He is drawn to the spreadsheet and lacks the vision required to transform WPP into a modern player in a fiercely competitive and rapidly evolving industry. Compare leadership at WPP with the leaders of Facebook and Google.
When Facebook first announced its IPO, Sorrell commented that he “doesn’t see how Facebook will commercialize itself.” Facebook had a growing membership of 2 billion users and the CEO of the largest media company in the world couldn’t envision how they would commercialize themselves. That says it all.
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