Ad holding company WPP is continuing its consolidation spree with Wunderman Thompson network absorbing 3 more agencies
Category : entrepreneur
- The world’s largest ad holding company WPP will continue its merger and consolidation strategy with global network Wunderman Thompson absorbing digital agencies Possible, Mirum, and iStrategyLabs.
- Sources told Business Insider that the three agencies, which previously operated under the Wunderman Thompson umbrella, would become one with that organization and would eventually drop their names.
- These organizations collectively employ several thousand people across dozens of countries. It is unclear how many jobs would be affected.
- The consolidation marks the latest step in WPP CEO Mark Read’s plan to return the company to growth amid headwinds caused by client budget cuts and a large-scale shift away from traditional advertising channels.
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WPP will continue its year-old restructuring spree by absorbing three agencies into the Wunderman Thompson organization that was created by the 2018 union of Wunderman and J. Walter Thompson.
Two high-level sources with direct knowledge of the matter said the digital agencies Possible, Mirum, and iStrategyLabs would become one with Wunderman Thompson, with each eventually dropping its name.
Possible is the best known of the three, with clients including Microsoft, AT&T, and Volkswagen.
The move marks another step in WPP CEO Mark Read’s plans to streamline the world’s largest ad holding company through a self-described “radical evolution” strategy.
It also shows how the company is attempting to return to growth in its largest region after a 2018 that saw stock prices drop by nearly 50% due to the loss of major accounts like American Express and a general move by marketers to slash overall budgets and shift spending from print and broadcast TV to digital platforms.
Spokespeople for WPP referred Business Insider to Wunderman Thompson, who had not provided a comment at the time of publication.
The move marks another step in WPP’s efforts to consolidate digital operations
The three agencies had already become part of the same network following the merger of digital firm Wunderman and J. Walter Thompson, the world’s oldest ad agency. The same two sources said they expected that the organizations would soon function as a single business under a shared profit and loss statement in North America and that all three would eventually drop their names.
One source said details of the new arrangement haven’t been finalized but that they should be complete by the end of the calendar year.
WPP had already taken a series of incremental steps toward consolidation in recent months by merging the Seattle offices of Possible and creative agency Cole & Weber with Wunderman Thompson in March and dropping the Possible name in the UK the following month to combine that organization with Mirum.
Back in 2011, the holding company combined four existing digital agencies to form Possible. JWT bought Digiteria in 2010 and merged it with 10 other digital agencies around the world to create Mirum in 2015 before acquiring Washington D.C.-based iStrategyLabs the following year.
According to the most recent numbers from LinkedIn and WPP’s website, the three agencies involved in this move employ several thousand people across dozens of countries. Business Insider was unable to learn how many jobs would be affected.
CEO Mark Read continues his three-year plan to return to growth by streamlining agency services
Mark Read laid out his three-year strategy for WPP in an investors day presentation in December 2018, saying the company would cut 3,500 jobs and hire 1,000 new people before 2021 while adding creative leadership and data-based service offerings. He also said not to expect any more large-scale merger announcements.
The company has made big leadership changes, though. Earlier this week, Business Insider reported first that Tim Castree, North American CEO of media buying network GroupM, would step down after less than a year in the job and that global CEO Christian Juhl would temporarily take his place.
WPP’s recent agency mergers and consolidation moves began in mid-2017, when Possible became part of the Wunderman network while retaining its own brand. Mark Read was CEO of Wunderman at the time.
His first major move upon taking over the holding company the following September was to merge digital agency VML and traditional creative shop Y&R to create VMLY&R.
The company reported better results to investors last month after a series of punishing quarters, with organic revenue rising 0.7% when accounting for the sale of a majority stake in market research firm Kantar Media.