WPP plc

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WPP plc
Type Public limited company
Traded as LSEWPP NASDAQWPPGY
Industry Advertising
Public relations
Founded 1971
(Wire and Plastic Products plc)
1985
(Sorrell acquisition and entry into advertising)
Founder(s) Martin Sorrell (as an advertising company)
Headquarters London, United Kingdom (Head office)
Saint Helier, Jersey (Registered office)
Dublin, Republic of Ireland (Executive office)
Area served Worldwide
Key people Philip Lader (Chairman)
Martin Sorrell (CEO)
Services Branding & identity
Consumer insights
Design
Digital
Marketing
Market research
Media planning and buying
Public relations
Relationship marketing
Revenue £11.019 billion (2013)[1]
Operating income £1.410 billion (2013)[1]
Net income £1.012 million (2013)[1]
Employees 162,000 (2014)[2]
Subsidiaries Grey Global Group
Ogilvy & Mather Worldwide
Young & Rubicam
JWT
Hill & Knowlton
Burson-Marsteller
GroupM
Cohn & Wolfe
The Brand Union
Website WPP.com

WPP plc is a British multinational advertising and public relations company with its main management office in London, United Kingdom, and its executive office in Dublin, Ireland.[3] It is the world's largest advertising company by revenues, and employs around 162,000 people in 3,000 offices across 110 countries.[2][4] It owns a number of advertising, public relations and market research networks, including Grey, Burson-Marsteller, Hill & Knowlton, JWT, Ogilvy Group, TNS, Young & Rubicam and Cohn & Wolfe.[2]

WPP has a primary listing on the London Stock Exchange and is a constituent of the FTSE 100 Index. It has a secondary listing on NASDAQ.

History[edit]

Wire and Plastic Products plc was founded in 1971 as a manufacturer of wire shopping baskets. In 1985 Martin Sorrell, searching for a listed company through which to build a worldwide marketing services company, bought a controlling stake of just under 30% at a cost of $676,000.[5][6] Sorrell had been the financial director for the advertising agency Saatchi & Saatchi from 1977 to 1985, managing its takeovers of companies in the US and the UK. The holding company was renamed WPP Group and in 1987 Sorrell became its chief executive.[5]

During 1986 WPP became the parent company of Picquotware, a manufacturer of teapots and jugs, based in Northampton. In November 1987 a fire destroyed the Northampton factory and production was restarted at Burntwood in Staffordshire. On 25 November 2004 WPP closed the Burntwood factory and stopped manufacturing Picquotware: all assets were sold on 14 December 2004.[7]

In 1987 the company acquired J. Walter Thompson (including JWT, Hill & Knowlton and MRB Group) for $566m.[5] The company listed on NASDAQ in 1988.[5] In 1989 it acquired Ogilvy Group for $864m[5] and in 1998 formed an alliance with Asatsu-DK Inc. of Japan.[5]

In May 2000, WPP agreed to acquire the United States-based advertising company Young & Rubicam for $5.7 billion, in what was at the time the largest ever takeover in the advertising sector.[8] The takeover made WPP the largest advertising company in the world measured by billings and revenue, overtaking Omnicom Group and Interpublic.[8] In 2007, WPP Digital was created to develop the Group's digital capabilities. In October 2008, WPP acquired market research firm Taylor Nelson Sofres for £1.6 billion.[9][10]

During 2009 WPP reduced its workforce by around 14,000 employees, or 12.3% of its then total staff numbers, in response to the onset of the 2008–2012 global recession.[11][12]

In June 2012, WPP agreed to acquire the digital advertising agency AKQA for US$540 million.[13][14]

Operations[edit]

WPP's advertising agency company holdings include the Grey Group, Ogilvy & Mather Worldwide, Young & Rubicam Brands, and JWT (formerly known as J. Walter Thompson Co.).

WPP's government lobbying and public relations company holdings including Hill+Knowlton Strategies, Ogilvy Public Relations Worldwide, Burson-Marsteller, and Cohn & Wolfe (the last two being part of Young & Rubicam Brands).

WPP's media investment management company holdings are operated by GroupM and include Mindshare, MEC (formerly Mediaedge:cia, Maxus and MediaCom (originally part of Grey Group).

WPP's research insight and consulting companies, forming a separate umbrella group known as Kantar, comprise BMRB, Added Value, Kantar Video, Indian Market Research Bureau, Millward Brown, Management Ventures Inc., Research International and TNS.

Delfinware Domestic Wireware, which was established in 1969 and manufactures kitchen and bathroom wire racks, is also a subsidiary of WPP Group.[15]

Principal subsidiaries, divisions, and investments[edit]

WPP's principal subsidiaries, divisions, and investments include:

Governance[edit]

WPP is governed by a board of directors, whose current members include Colin Day, Esther Dyson, Orit Gadiesh, Ruigan Li, Philip Lader, Stanley Morten, Kōichirō Naganuma, Lubna Olayan, John Quelch, Mark Read, Paul Richardson, Jeffrey Rosen, Timothy Shriver, Martin Sorrell, Paul Spencer and Solomon Trujillo.

Controversies[edit]

2012 shareholder revolt on executive remuneration[edit]

With a number of shareholder revolts over executive pay having already happened at other public companies' AGMs earlier in the year, the media coverage of Martin Sorrell's intended £12.93m pay packet drew increasing public attention.[16][17] The result was an overwhelming 59.52% shareholder vote to reject the resolution.[17][18]

Taxation[edit]

It has been reported that WPP goes to great lengths to lower its own corporate tax bill, paying only 1.6% of total revenue in taxes in 2010.[19] The Guardian reported that between 2003 and 2009 the company paid £27m in UK corporation tax, compared to what the newspaper "might expect" based on reports of the firm making 15% of its profit in the UK, of around £126m.[20]

Television Audience Measurement[edit]

In 2012 the Indian broadcasting NDTV filed a lawsuit against Television Audience Measurement (TAM), a joint venture of the former competitors Nielsen and Kantar Media Research which for years has provided the only TV audience measurement system in India. WPP Plc was listed among the defendants as the holding group of Kantar and IMRB. NDTV's lawsuit, filed in the New York State Supreme Court under the Foreign Corrupt Practices Act and seeking $1.4 billion for negligence and hundreds of millions for interference and breach of fiduciary duty, cited a public conversation between Vikram Chandra, CEO of NDTV, and Martin Sorrell, CEO of WPP, in which Chandra had described ways in which the system was prone to tampering and bribery; his request for a halt to the publication of the allegedly compromised data was unsuccessful.[21][22][23][24][25]

WPP responded that the lawsuit had not been served on WPP or any of its operating companies, the New York court had no jurisdiction in the case and that it would file for dismissal, seeking legal costs, and that it was considering a lawsuit against NDTV for defamation, a threat which NDTV in turn called "baseless".[26] The motion to dismiss was filed a week later, with the statement in its memorandum of law that "This case is nothing more than a desperate attempt by the plaintiff, a television station in New Delhi, India, to drum up media coverage in India to divert attention from the real reasons its programmes have had low audience ratings and its financial performance has been abysmal for five years ... New Delhi TV has crossed the globe and come to New York State Supreme Court to complain about an Indian company, TAM, and how it measures the ratings of television programmes in India."[27] The motion to dismiss is to be decided by the court on 14 December 2012.[28] Nielsen later filed its own petition for dismissal, writing that "NDTV attempts to transform a potential contract claim against TAM into tort and oral contract claims against the Nielsen defendants. Nothing in the law supports such a magic trick. Simply put, NDTV fails to allege a legal duty independent of a contract and fails to allege all of the elements needed to support each cause of action."[29]

References[edit]

  1. ^ a b c Preliminary Results 2013
  2. ^ a b c "WPP Fast Facts". WPP plc. Retrieved 15 March 2014. 
  3. ^ Burke, Risn (30 September 2008). "WPP moves HQ to Ireland in tax-cut bid". The Irish Independent. Retrieved 1 September 2010. 
  4. ^ "WPP's Sorrell says Europe a sideshow ahead of U.S". Reuters. 28 November 2011. 
  5. ^ a b c d e f "Group history". WPP plc. Retrieved 30 August 2010. 
  6. ^ "Sir Martin Sorrell: advertising man who made the industry's biggest pitch". The Guardian. 4 July 2010. Retrieved 12 July 2012. 
  7. ^ Piquotware History
  8. ^ a b "Young & Rubicam Agrees to $5.7 Billion Takeover by WPP". The New York Times. 9 May 2000. Retrieved 12 July 2012. 
  9. ^ WPP 2008 Preliminary Results
  10. ^ "WPP Bid Garners 82% TNS Shareholder Approval". Ad Week. 8 October 2008. Retrieved 12 July 2012. 
  11. ^ "WPP stable after 'brutal' 2009". The Guardian. 5 March 2010. Retrieved 12 July 2012. 
  12. ^ "WPP profits fall despite job cuts". The Telegraph. 5 March 2010. Retrieved 12 July 2012. 
  13. ^ "WPP Acquires AKQA to Beef Up Digital Marketing". The New York Times. 20 June 2012. Retrieved 12 July 2012. 
  14. ^ "WPP buys majority stake in AKQA". The Guardian. 20 June 2012. Retrieved 12 July 2012. 
  15. ^ Delfinware website
  16. ^ "Sir Martin Sorrell finds out that it doesn't always pay to advertise". The Guardian. 17 June 2012. Retrieved 12 July 2012. 
  17. ^ a b "WPP shareholders vote against £6.8m pay packet for Sir Martin Sorrell". The Guardian. 13 June 2012. Retrieved 12 July 2012. 
  18. ^ WPP 2012 AGM Resolutions Results
  19. ^ Edwards, Jim (2011-11-29). "WPP CEO, Famed Tax Avoider, Chides Governments About Debt". Business Insider. Retrieved 2011-11-29. 
  20. ^ Tax gap reporting team (2009-02-04). "Seeing double: Avoidance scheme allegedly used by UK ads agency". The Guardian. Retrieved 2012-12-11. 
  21. ^ Shamni Pande and Anusha Subramanian (Sep 2, 2012). "Taming TAM:What is holding India back from improving TV audience measurement?". Business Today. 
  22. ^ Anusha Subramanian (August 3, 2012). "NDTV bells the cat, files suit against TAM". Business Today. 
  23. ^ PTI (2012-08-02). "NDTV sues Nielsen for viewership data manipulation". Business Today. 
  24. ^ "NDTV-WPP war of words continues over ratings issue". Business-Standard. Aug 28, 2012. 
  25. ^ "Advertising firm WPP may sue NDTV for defamation". Economic Times. 2012-08-23. 
  26. ^ "WPP hints defamation case against NDTV". Indian Express. 2012-08-24. 
  27. ^ "NDTV suit a desperate attempt". The Hindu. 2012-08-30. 
  28. ^ "NDTV-TAM case: Court to take decision on 14 Dec". Firstpost Business. 2012-09-07. 
  29. ^ "Nielsen files for dismissal of NDTV lawsuit". Indiantelevision.com. 2012-11-12. 

External links[edit]