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WPP plc

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WPP plc
Company typePublic
LSE: WPP
NYSE: WPP
FTSE 100 Component
ISINJE00B8KF9B49 Edit this on Wikidata
Industry
Founded1971; 53 years ago (1971)
(Wire and Plastic Products plc)
1985
(Sorrell acquisition and entry into advertising)
Founders
(as an advertising company)
HeadquartersLondon, England, UK
Area served
Worldwide
Key people
Services
  • Integrated networks
  • media
  • data and insights
  • public relations and public affairs
  • brand consulting
  • production
  • health and wellness[1]
RevenueIncrease £14.8 billion (2023)[2]
Decrease £531.0 million (2023)[2]
Decrease £197.2 million (2023)[2]
Number of employees
115,000 (2024)[3]
Subsidiaries
Websitewww.wpp.com

WPP plc is a British multinational communications, advertising, public relations, technology, and commerce holding company headquartered in London, England. It is the world's largest advertising company, as of 2023.[4] WPP plc owns many companies, which include advertising, public relations, media, and market research networks such as AKQA, BCW, CMI Media Group, Essence Global, Finsbury, Grey, Hill & Knowlton, Mindshare, Ogilvy, Wavemaker, and VML. It is one of the "Big Four" agency companies, alongside Publicis, The Interpublic Group of Companies, and Omnicom Group.[5] WPP has a primary listing on the London Stock Exchange, and is a constituent of the FTSE 100 Index.[6]

On 14 April 2018, Martin Sorrell retired 33 years after founding the company, following allegations of bullying and sexual indescretions,[7][8] and Roberto Quarta was appointed chairman.[9] Mark Read was appointed CEO in September 2018.[10]

History

[edit]

The company was founded as Wire and Plastic Products plc to manufacture wire shopping baskets in 1971. In 1985 Martin Sorrell and Preston Rabl,[11] searching for a listed company through which to build a worldwide marketing services company, bought a controlling stake.[12][13]

In 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, so 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.[14]

In the 1980s, WPP began its strategy of growth via acquisitions.[15] In later years, WPP regularly acquired dozens of companies annually.[15] In January 1987, the company acquired Scott Stern Associates, at the time Scotland's largest design and advertising company.[16] In the same year (1987), the company acquired J. Walter Thompson (including JWT, Hill & Knowlton, and MRB Group) for $566m.[12] The company was listed on the NASDAQ in 1988 (and later switched its secondary listing to the NYSE).[17] In 1989, it acquired Ogilvy Group for $864m.[12]

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.[15] In 1998, WPP formed an alliance with Asatsu-DK Inc. of Japan.[12]

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.[18] The takeover made WPP the largest advertising company in the world measured by billings and revenue, overtaking Omnicom Group and Interpublic.[18]

In the 2000s, WPP Digital was created to develop the group's digital capabilities.[19] In October 2008, WPP acquired market research firm Taylor Nelson Sofres for £1.6 billion.[20][21] 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.[22][23]

In June 2012, WPP agreed to acquire the digital advertising agency AKQA for US$540 million.[24][25] In November 2015, WPP agreed to acquire a majority stake in Essence, a global digital agency.[26]

In November 2016, WPP announced it will be acquiring PEP, LLC, a project management and procurement company that oversees shopper marketing promotions for clients, in the US.[27]

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.[28][29]

WPP merged Burson-Marsteller with Cohn & Wolfe to become BCW (Burson Cohn & Wolfe) in February 2018.[30]

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 the global CEO of Wunderman,[31] was named CEO.[32][33]

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, the ability to directly advertise on tech platforms, and competition with consultancies.[34][35][36] While WPP had previously outperformed other companies in the industry, its growth slowed starting in 2017 and its market value dropped in 2018.[37] Critics said WPP needed to become "nimbler" and "leaner".[34] At the time, many WPP agencies operated mostly independently and competed for accounts.[38][39] In late 2018, Read said the company had grown "unwieldy with too much duplication".[32] He instituted a plan to reposition WPP as a "creative transformation company" and make its offer simpler.[32] Read emphasized the importance of technology[40] and also merged several WPP agencies:[32] J. Walter Thompson merged with Wunderman to create Wunderman Thompson[41] and Y&R merged with VML to create VMLY&R.[32] Within Read's first year as CEO, he trimmed WPP by selling more than 30 subsidiaries,[42] including a majority stake in Kantar.[42] By selling a majority stake of Kantar to Bain Capital, WPP is believed to have generated $3.1 billion to help pay down debt.[43] Read also sold the original Wire and Plastic Products company that Sorrell had purchased to create his business empire.[44]

The sale of 60% of the shares in Kantar was completed in December 2019. $1.9bn was used to reduce WPP's debt, and $1.2bn was returned to shareholders.[45][46]

In July 2022, WPP acquired Corebiz, a Latin American ecommerce agency, for an undisclosed amount.[47]

In July 2024, WPP announced the appointment of former BT Group chief Philip Jansen as its chairman succeeding Roberto Quarta.[48] Jansen is set to take over from Quarta as chairman on 1 January 2025.[49]

Operations

[edit]

WPP is a large holding company involved in communications, advertising, public relations, and other businesses.[15] It is considered the world's biggest advertising agency group.[40] WPP focuses on communications, experience, commerce, and technology.[50][51] Headquartered in London, England, WPP has approximately 130,000 employees throughout its portfolio of businesses across more than 100 countries, as of 2018.[32]

WPP's notable advertising agency company holdings include Grey, Ogilvy,[15] VMLY&R, and Wunderman Thompson.[52] The XM Gravity Indonesia subsidiary company was founded in 2008.[53]

WPP's digital company holdings include AKQA.[15] WPP's public relations and public affairs company holdings include Hill+Knowlton Strategies, BCW (Burson Cohn & Wolfe), and Ogilvy.[15] WPP's media investment management company holdings include GroupM, Mindshare, Wavemaker and Essence.[54] WPP's research insight and consulting companies include Kantar.[42] Hogarth Worldwide is a WPP-owned production company.[51]

WPP's shopper marketing promotions company is PEP, LLC (formerly Promotion Execution Partners).[27] WPP-owned brand consultancies include Superunion (a combination of Brand Union, Lambie-Nairn, and three other brand consulting businesses)[55][56] and Landor.[15]

Controversies

[edit]

Cillit Bang viral marketing controversy

[edit]

In 2005 advertising agency Cohn & Wolfe (later merged into WPP) was contracted by Reckitt to operate a blog as the fictional character Barry Scott, advertising mascot for Reckitt's cleaning fluid Cillit Bang, as a viral marketing platform. In October of that year blogger Tom Coates wrote an emotional post to his own blog about his long-estranged father. Among the expressions of condolences and sympathy in the post's comment section was one from a user identifying themselves as Barry Scott, with a link back to Cohn & Wolfe's in-character blog as Barry Scott. Offended by the apparent use of his blog comments on such a personal post as a spam advertising venue, Coates traced the comment's originating IP address through addresses owned by Young & Rubicam and back to Reckitt. Reckitt initially denied responsibility for the message, but wrote Coates an apology acknowledging the message's inappropriateness, and Cohn & Wolfe issued a statement of remorse for their misuse of the "experimental" blog which they then ceased operating.[57][58]

The controversy and its fallout led to further discussions among the blogger community as well as the advertising industry on the ethical issues surrounding blogs being "operated" by fictional characters for the purposes of advertising without being clearly labeled as such, and the extent to which those blogs should be allowed to participate in the greater blogosphere.[59][60][61]

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.[62][63] The result was a 59.52% shareholder vote to reject the resolution.[63][64]

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.[65]

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.[66] WPP Plc was listed among the defendants as the holding group of Kantar and IMRB.[67][68][69][70][71]

The lawsuit was dismissed in its entirety on 4 March 2013.[72]

Work for fossil fuel companies

[edit]

WPP handles the accounts of many major oil companies.[73] Asked by Reuters to disclose their client list, WPP refused to do so.[73] WPP has defended its work for fossil fuel companies.[73] Lawsuits have alleged that four of WPP's advertisement campaigns for fossil fuel companies have been misleading or entailed greenwashing.[73]

Violating the law in Vietnam

[edit]

WPP has been fined on three occasions by the Ministry of Information and Communications for advertising products on YouTube and Facebook in a manner which breached Vietnam's strict laws on cross-border advertising.[74] The legislation is designed to combat offensive material which is intended to damage the Communist Party of Vietnam and the Government of Vietnam.[75] WPP had committed various advertising violations, including inserting advertisements into intervals in the Chinese drama series Flight to You which depicted the disputed U-shaped line.[76]

See also

[edit]

References

[edit]
  1. ^ "Our companies". WPP plc. Retrieved 16 September 2019.
  2. ^ a b c "Preliminary Results 2023" (PDF). WPP plc. Retrieved 22 February 2024.
  3. ^ "About us". WPP. Retrieved 12 February 2024.
  4. ^ "The world's biggest ad agency is going all in on AI with Nvidia's help". CNN. Retrieved 21 March 2024.
  5. ^ Elliott, Stuart (31 March 2002). "Advertising's Big Four: It's Their World Now". The New York Times.
  6. ^ "WPP". London Stock Exchange. Retrieved 17 September 2019.
  7. ^ Goodley, Simon; Davies, Rob (11 June 2018). "Martin Sorrell's WPP exit came amid bullying and sex worker allegations". The Guardian. ISSN 0261-3077. Retrieved 29 October 2024.
  8. ^ "Martin Sorrell's downfall: why the ad king left WPP". Financial Times. 11 June 2018. Retrieved 29 October 2024.
  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. ^ Holton, Kate (3 September 2018). "Ad giant WPP names Read as CEO for post-Sorrell era". Reuters.
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  14. ^ Piquotware History Archived 11 December 2006 at the Wayback Machine
  15. ^ 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.
  16. ^ George, K D (1988). Macmillan's Mergers and Acquisitions Year Book. Macmillan Publishing. p. 413. ISBN 978-0-333-45865-5.
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  18. ^ a b "Young & Rubicam Agrees to $5.7 Billion Takeover by WPP". The New York Times. 9 May 2000. Retrieved 12 July 2012.
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  20. ^ "Stockopedia. Stock Screens, Stock Ranks, Stock Tips & Tricks". Stockopedia. Retrieved 21 March 2015.
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  34. ^ a b "Sir Martin Sorrell leaves WPP in a sorry state". The Economist. 21 April 2018. Retrieved 25 September 2019.
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  43. ^ 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.
  44. ^ Nilsson, Patricia (1 July 2019). "WPP sells stake in communications group Chime". Financial Times. Archived from the original on 10 December 2022. Retrieved 16 September 2019.
  45. ^ "WPP completes Kantar deal with $1.2bn return to shareholders". Mediatel. 6 December 2019. Retrieved 11 January 2021.
  46. ^ "WPP to return £1bn to shareholders from £3.2bn sale of Kantar stake". Proactive Investor. 12 July 2019. Retrieved 11 January 2021.
  47. ^ "WPP Buys Corebiz to Strengthen Latin America Capabilities". MarketWatch. Retrieved 20 July 2022.
  48. ^ "WPP names former BT boss Philip Jansen as new chair". Financial Times. 29 July 2024. Retrieved 29 October 2024.
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  56. ^ Rittenhouse, Lindsay (23 January 2018). "WPP's New Global Brand Agency Combines 5 of Its Consultancies and Design Shops". Adweek. Retrieved 17 September 2019.
  57. ^ "Fictional web character fails to amuse net. - Free Online Library". www.thefreelibrary.com.
  58. ^ "Fake Blogging and an Equally Fake Apology". PR Watch. 8 October 2005.
  59. ^ "WOMMA's Word of Mouth vs. Advertising: On Cillit Bang and a new low for marketers... (plasticbag.org)". 12 December 2005. Archived from the original on 12 December 2005.
  60. ^ "Cillit Bang stains their cult reputation with comment spam". Adland. Retrieved 3 August 2021.
  61. ^ "Diary: Barry Scott makes a real mess with blog posting". www.campaignlive.co.uk.
  62. ^ "Sir Martin Sorrell finds out that it doesn't always pay to advertise". The Guardian. 17 June 2012. Retrieved 12 July 2012.
  63. ^ a b "WPP shareholders vote against £6.8m pay packet for Sir Martin Sorrell". The Guardian. 13 June 2012. Retrieved 12 July 2012.
  64. ^ "AGM Total Proxy Votes". wpp.com. Retrieved 21 March 2015.
  65. ^ "Seeing double: Avoidance scheme allegedly used by UK ads agency". The Guardian. 4 February 2009. Retrieved 11 December 2012.
  66. ^ Gardner, Eriq (30 July 2012). "Nielsen Sued for Billions Over Allegedly Manipulated TV Ratings". The Hollywood Reporter. Retrieved 25 September 2019.
  67. ^ Shamni Pande and Anusha Subramanian (2 September 2012). "Taming TAM:What is holding India back from improving TV audience measurement?". Business Today.
  68. ^ Anusha Subramanian (3 August 2012). "NDTV bells the cat, files suit against TAM". Business Today.
  69. ^ "NDTV sues Nielsen for viewership data manipulation". Business Today. Press Trust of India. 2 August 2012.
  70. ^ "NDTV-WPP war of words continues over ratings issue". Business Standard. 28 August 2012.
  71. ^ "Advertising firm WPP may sue NDTV for defamation". The Economic Times. 23 August 2012. Archived from the original on 24 August 2012.
  72. ^ "WPP Statement on Dismissal of NDTV Law Suit". WPP. 10 March 2013.
  73. ^ a b c d Dang, Andrew R. C. Marshall, Valerie Volcovici, Sheila (2020). "Climate change turns up the heat on ad industry". Reuters. Retrieved 12 July 2021.{{cite news}}: CS1 maint: multiple names: authors list (link)
  74. ^ "WPP faces triple fines in 2023 for cross-border advertising violations". Vietnam Agriculture. Retrieved 2 May 2024.
  75. ^ "Media firm fined for illegal YouTube ad". VN Express. 29 November 2023. Retrieved 2 May 2024.
  76. ^ "Media firm fined for running YouTube ad involving illegal U-shaped line". VN Express. 19 April 2024. Retrieved 2 May 2024.
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