WPP plc

From Wikipedia, the free encyclopedia
  (Redirected from WPP Group)
Jump to navigation Jump to search

WPP plc
Public limited company
Traded asLSEWPP
FTSE 100 Component
NYSEWPP
ISINJE00B8KF9B49 Edit this on Wikidata
Industry
Founded1971; 49 years ago (1971)
(Wire and Plastic Products plc)
1985
(Sorrell acquisition and entry into advertising)
FounderMartin Sorrell (as an advertising company)
HeadquartersLondon
Area served
Worldwide
Key people
Services
  • Integrated networks
  • media
  • data and insights
  • public relations and public affairs
  • brand consulting
  • production
  • health and wellness[1]
Revenue£15,602.4 million (2018)[2]
£1,431.4 million (2018)[2]
£1,139.4 million (2018)[2]
Number of employees
130,000 (2019)[3][4]
Subsidiaries
WebsiteWPP.com

WPP plc is a multinational communications, advertising, public relations, technology, and commerce holding company headquartered in London, England. It is considered the world's largest advertising company, as of 2019.[5] WPP plc owns many companies, which includes advertising, public relations, media, and market research networks such as AKQA, BCW, Essence Global, Grey, GroupM, Hill+Knowlton Strategies, Kantar Group, Mindshare, Ogilvy, Wavemaker, Wunderman Thompson, and VMLY&R. It is one of the "Big Five" agency companies, alongside Dentsu, Publicis, Interpublic Group of Companies and Omnicom.[6] WPP has a primary listing on the London Stock Exchange and is a constituent of the FTSE 100 Index.[7] It has a secondary listing on the New York Stock Exchange.[8]

On 14 April 2018, Martin Sorrell retired 33 years after founding the company. Roberto Quarta is chairman.[9] Mark Read is CEO.[10]

History[edit]

The company was founded as Wire and Plastic Products plc to manufacture wire shopping baskets in 1971. In 1985 Martin Sorrell, searching for a listed company through which to build a worldwide marketing services company, bought a controlling stake.[11][12]

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.[13]

In the 1980s, WPP began its strategy of growth via acquisitions.[14] In later years, WPP regularly acquired dozens of companies annually.[14] In 1987 the company acquired J. Walter Thompson (including JWT, Hill & Knowlton and MRB Group) for $566m.[11] The company listed on the NASDAQ in 1988 (and later switched its secondary listing to the NYSE).[15][8] In 1989 it acquired Ogilvy Group for $864m.[11]

WPP's acquisitions continued into the 1990s, when WPP bought firms in the healthcare advertising, digital-marketing, online shopping, digital media, data management, retail and corporate consultancy, and sports-marketing industries. This included the 1999 acquisition of Lambie-Nairn.[14] In 1998, WPP formed an alliance with Asatsu-DK Inc. of Japan.[11]

In May 2000, WPP agreed to acquire the United States-based Young & Rubicam Group for $5.7 billion, in what was at the time the largest ever takeover in the advertising sector.[16] The takeover made WPP the largest advertising company in the world measured by billings and revenue, overtaking Omnicom Group and Interpublic.[16]

In the 2000s, WPP Digital was created to develop the group's digital capabilities.[17] In October 2008, WPP acquired market research firm Taylor Nelson Sofres for £1.6 billion.[18][19] 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.[20][21]

In June 2012, WPP agreed to acquire the digital advertising agency AKQA for US$540 million.[22][23] In November 2015 WPP agreed to acquire a majority stake in Essence, a global digital agency.[24]

Many of WPP's constituent agencies use Microsoft Windows, and the organisation was among those hit by the 2017 cyberattacks on Ukraine, with some staff's computer access limited to webmail only as much as ten days later.[25][26]

WPP merged Burson-Marsteller with Cohn & Wolfe to become BCW (Burson Cohn & Wolfe) in February 2018.[27]

In April 2018, Martin Sorrell retired after 33 years, following allegations of personal misconduct and misuse of company assets. Sorrell has denied the allegations.[9] Chairman Roberto Quarta was temporarily named executive chairman.[9] In September 2018, Mark Read, who was global CEO of Wunderman,[28] was named CEO.[29][30]

In the late 2010s, the advertising industry faced significant challenges. Changes in the industry landscape included financial pressure on global clients, in particular fast-moving consumer goods clients, companies taking work in-house, ability to directly advertise on tech platforms, and competition with consultancies.[31][32][33] While WPP had previously outperformed other companies in the industry, its growth slowed starting in 2017 and its market value dropped in 2018.[34] Critics said WPP needed to become "nimbler" and "leaner".[31] At the time, many WPP agencies operated mostly independently and competed for accounts.[35][36] In late 2018, Read said the company had grown "unwieldy with too much duplication".[29] He instituted a plan to reposition WPP as a "creative transformation company" and make its offer simpler.[29] Read emphasized the importance of technology[37] and also merged several WPP agencies:[29] J. Walter Thompson merged with Wunderman to create Wunderman Thompson[38] and Y&R merged with VML to create VMLY&R.[29] Within Read's first year as CEO, he trimmed WPP by selling more than 30 subsidiaries,[39] including a majority stake in Kantar.[39] By selling a majority stake of Kantar to Bain Capital, WPP is believed to have generated $3.1 billion to help pay down debt.[40] Read also sold the original Wire and Plastic Products company that Sorrell had purchased to create his business empire.[41]

The sale of 60% Kantar was completed on December 2019. $1.9bn was used to reduce WPP’s debt, and $1.2bn was returned to shareholders.[42]

Operations[edit]

WPP is a large holding company involved in communications, advertising, public relations, and other businesses.[14] It is considered the world's biggest advertising agency group.[37] WPP focuses on communications, experience, commerce, and technology.[43][44] Headquartered in London, England, WPP has approximately 130,000 employees throughout its portfolio of businesses across more than 100 countries, as of 2018.[29]

WPP's notable advertising agency company holdings include Grey, Ogilvy,[14] VMLY&R, and Wunderman Thompson.[45] WPP's digital company holdings include AKQA.[14] WPP's public relations and public affairs company holdings include Hill+Knowlton Strategies, BCW (Burson Cohn & Wolfe), and Ogilvy.[14] WPP's media investment management company holdings include GroupM, Mindshare, Wavemaker and Essence.[46] WPP's research insight and consulting companies include Kantar.[39] Hogarth Worldwide is a WPP-owned production company.[44] WPP-owned brand consultancies include Superunion (a combination of Brand Union, Lambie-Nairn, and three other brand consulting businesses)[47][48] and Landor.[14]

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 compensation package drew increasing public attention in 2012.[49][50] The result was a 59.52% shareholder vote to reject the resolution.[50][51]

Taxation[edit]

It has been reported that WPP goes to great lengths to lower its own corporate tax bill. 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.[52]

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. The lawsuit alleged that viewership data were manipulated in favor of broadcasters willing to provide bribes.[53] WPP Plc was listed among the defendants as the holding group of Kantar and IMRB.[54][55][56][57][58]

The lawsuit was dismissed in its entirety on 4 March 2013.[59]

See also[edit]

References[edit]

  1. ^ "Our companies". WPP plc. Retrieved 16 September 2019.
  2. ^ a b c "Preliminary Results 2018" (PDF). WPP plc. Retrieved 11 March 2019.
  3. ^ "Best Employers for Women". Forbes. 15 May 2019. Retrieved 16 September 2019.
  4. ^ "At a glance". WPP plc. Retrieved 11 March 2019.
  5. ^ "WPP no longer world's most valuable ad firm as share price falls". The Guardian. 19 October 2018. Retrieved 21 January 2019.
  6. ^ "Advertising's Big Four: It's Their World Now". The New York Times.
  7. ^ "WPP". London Stock Exchange. Retrieved 17 September 2019.
  8. ^ a b "WPP". New York Stock Exchange. Retrieved 17 September 2019.
  9. ^ a b c "WPP CEO Sorrell Quits After Three Decades at Top of Ad World". Bloomberg.com. 14 April 2018. Retrieved 14 April 2018.
  10. ^ "WPP names Mark Read as CEO".
  11. ^ a b c d "Group history". WPP plc. Retrieved 30 August 2010.
  12. ^ "Sir Martin Sorrell: advertising man who made the industry's biggest pitch". The Guardian. 4 July 2010. Retrieved 12 July 2012.
  13. ^ Piquotware History Archived 11 December 2006 at the Wayback Machine
  14. ^ a b c d e f g h Klara, Robert (18 April 2018). "This Timeline Shows How WPP Acquired Its Way to Fame and Notoriety Over 3 Decades". Adweek. Retrieved 17 September 2019.
  15. ^ "WPP: a history". The Daily Telegraph. 13 June 2012. Retrieved 22 January 2020.
  16. ^ a b "Young & Rubicam Agrees to $5.7 Billion Takeover by WPP". The New York Times. 9 May 2000. Retrieved 12 July 2012.
  17. ^ Sinclair, Lara (26 October 2007). "WPP alliance makes the call for mobile phone marketing". The Australian. Retrieved 16 September 2019.
  18. ^ "Stockopedia. Stock Screens, Stock Ranks, Stock Tips & Tricks". Stockopedia. Retrieved 21 March 2015.
  19. ^ "WPP Bid Garners 82% TNS Shareholder Approval". Ad Week. 8 October 2008. Retrieved 12 July 2012.
  20. ^ "WPP stable after 'brutal' 2009". The Guardian. 5 March 2010. Retrieved 12 July 2012.
  21. ^ "WPP profits fall despite job cuts". The Telegraph. 5 March 2010. Retrieved 12 July 2012.
  22. ^ "WPP Acquires AKQA to Beef Up Digital Marketing". The New York Times. 20 June 2012. Retrieved 12 July 2012.
  23. ^ "WPP buys majority stake in AKQA". The Guardian. 20 June 2012. Retrieved 12 July 2012.
  24. ^ "WPP agrees to acquire a majority stake in digital agency Essence – WPP". www.wpp.com. Retrieved 21 November 2016.
  25. ^ Hall, Kat (7 July 2017). "Largest advertising company in the world still wincing after NotPetya punch". The Register. Retrieved 8 July 2017.
  26. ^ Nash, Kim S.; Castellanos, Sara; Janofsky, Adam (27 June 2018). "One Year After NotPetya Cyberattack, Firms Wrestle With Recovery Costs". The Wall Street Journal. Retrieved 16 September 2019.
  27. ^ Bradley, Diana (27 February 2018). "WPP Merges Burson-Marsteller and Cohn & Wolfe". PR Week. Retrieved 28 February 2018.
  28. ^ Graham, Megan (17 April 2018). "Who are Mark Read and Andrew Scott, WPP's new chief operating officers?". Ad Age. Retrieved 16 September 2019.
  29. ^ a b c d e f Sweney, Mark (11 December 2018). "WPP advertising group to cut 3,500 jobs in £300m restructuring". The Guardian. Retrieved 16 September 2019.
  30. ^ Kostov, Nick (3 September 2018). "Ad Giant WPP Taps Company Veteran Mark Read for CEO". The Wall Street Journal. Retrieved 24 October 2019.
  31. ^ a b "Sir Martin Sorrell leaves WPP in a sorry state". The Economist. 21 April 2018. Retrieved 25 September 2019.
  32. ^ Proud, Liam (23 August 2017). "WPP underestimates pinch from corporate austerity". Reuters. Retrieved 19 November 2019.
  33. ^ Bond, Shannon; Garrahan, Matthew; Mooney, Attracta (2 March 2018). "WPP squeezed by advertisers and digital disruption". Financial Times. Retrieved 19 November 2019.
  34. ^ Holton, Kate (25 October 2018). "WPP shares plunge as ad group falls behind in post-Sorrell era". Reuters. Retrieved 19 November 2019.
  35. ^ Kostov, Nick; Vranica, Suzanne (24 September 2018). "WPP Considers Merger of Young & Rubicam and Digital Ad Firm VML". The Wall Street Journal. Retrieved 16 September 2019.
  36. ^ Garrahan, Matthew (1 March 2019). "WPP bullish on second half of 2019 despite glum start to year". Financial Times. Retrieved 16 September 2019.
  37. ^ a b Mayes, Joe (7 December 2018). "Biggest Ad Group WPP Adds Urgency to Digital Push After Slump". Bloomberg News. Retrieved 16 September 2019.
  38. ^ Coffee, Patrick (26 November 2018). "WPP Will Merge J Walter Thompson with Wunderman to Form Wunderman Thompson". Adweek. Retrieved 26 November 2018.
  39. ^ a b c Nilsson, Patricia; Espinoza, Javier (12 July 2019). "WPP slims down with Kantar stake sale". Financial Times. Retrieved 16 September 2019.
  40. ^ Graham, Megan (12 July 2019). "WPP will sell stake in market research unit to Bain Capital in deal valuing Kantar at $4 billion". CNBC. Retrieved 17 September 2019.
  41. ^ Nilsson, Patricia (1 July 2019). "WPP sells stake in communications group Chime". Financial Times. Retrieved 16 September 2019.
  42. ^ "Bain Capital Private Equity buys 60% of Kantar". PPC Land. 8 December 2019. Retrieved 24 December 2019.
  43. ^ McClenllan, Steve (11 December 2018). "WPP Outlines Transformation Plans". MediaPost. Retrieved 16 September 2019.
  44. ^ a b Coffee, Patrick (11 December 2018). "WPP to Cut 3,500 Jobs, Refocus on Creative and Data With No More Agency Mergers". Adweek. Retrieved 16 September 2019.
  45. ^ Beer, Jeff (26 November 2018). "WPP merges ad agency giants JWT and Wunderman". PR Week. Retrieved 7 January 2020.
  46. ^ Spanier, Gideon (6 September 2017). "WPP unveils Wavemaker as name of merged MEC-Maxus agency". Campaign. Retrieved 7 January 2020.
  47. ^ McCarthy, John (24 October 2018). "Landor names CCO Knapp as chairman to keep brand strategy' core to client transformation". The Drum. Retrieved 17 September 2019.
  48. ^ Rittenhouse, Lindsay (23 January 2018). "WPP's New Global Brand Agency Combines 5 of Its Consultancies and Design Shops". Adweek. Retrieved 17 September 2019.
  49. ^ "Sir Martin Sorrell finds out that it doesn't always pay to advertise". The Guardian. 17 June 2012. Retrieved 12 July 2012.
  50. ^ a b "WPP shareholders vote against £6.8m pay packet for Sir Martin Sorrell". The Guardian. 13 June 2012. Retrieved 12 July 2012.
  51. ^ "AGM Total Proxy Votes". wpp.com. Retrieved 21 March 2015.
  52. ^ "Seeing double: Avoidance scheme allegedly used by UK ads agency". The Guardian. 4 February 2009. Retrieved 11 December 2012.
  53. ^ Gardner, Eriq (30 July 2012). "Nielsen Sued for Billions Over Allegedly Manipulated TV Ratings". The Hollywood Reporter. Retrieved 25 September 2019.
  54. ^ Shamni Pande and Anusha Subramanian (2 September 2012). "Taming TAM:What is holding India back from improving TV audience measurement?". Business Today.
  55. ^ Anusha Subramanian (3 August 2012). "NDTV bells the cat, files suit against TAM". Business Today.
  56. ^ "NDTV sues Nielsen for viewership data manipulation". Business Today. Press Trust of India. 2 August 2012.
  57. ^ "NDTV-WPP war of words continues over ratings issue". Business Standard. 28 August 2012.
  58. ^ "Advertising firm WPP may sue NDTV for defamation". The Economic Times. 23 August 2012.
  59. ^ "WPP Statement on Dismissal of NDTV Law Suit". WPP. 10 March 2013.

External links[edit]