WPP On The Rebound?
No question about it, 2018 was a horrible year for WPP. Between client erosion of brands like American Express, Campbell’s, Mercedes-Benz, United Airlines, HSBC and Bayer, and the scandalous departure of longtime CEO Sir Martin Sorrell, the world’s largest agency Holding Company faced a year of reckoning.
During WPP’s low point in mid-2018 , their newly minted CEO Mark Read announced an audacious reorg plan to merge legacy agencies like VML/Y&R and Wunderman/JWT to eliminate redundancy and reduce costs. At the same time they’ve invested more in digital and data capabilities to improve their client offerings in order to win more reviews.
Although it’s still early in WPP’s turnaround cycle, the strategy appears to be working. During Friday’s Q4 earnings call Mr. Reed announced year-over-year cost savings of 5.7%, and they’ve recently started winning business again including Volkswagon’s creative account. Read is still tempering expectations for 2019, describing it as a challenge with “major headwinds from 2018’s losses”. But at least they appear to be pointed in the right direction, which is the first step in any turnaround.