The year was 1989 and Mark Read, armed with degrees from top-tier academic institutions and an appetite for business, wrote an application to Martin Sorrell, the founder of a little-known advertising outfit snapping at the heels of the titans on Madison Avenue.
The letter landed Read his first job at WPP Plc and in the next years, the soft-spoken Cambridge graduate witnessed the hard-charging Sorrell grow the company into the world’s biggest advertising group, whose work ranges from making TV commercials for Uber to buying billboard space for Pantene shampoo. Sorrell used serial acquisitions to form a complex web of agencies, counting 130,000 employees across 112 countries.
Then a year ago, Sorrell’s career at the company he built crumbled. Amid allegations of misconduct (which Sorrell denies), WPP’s powerful boss departed and Read ascended to the top job. He inherited a group that was losing work to its global ad agency rivals and a new generation of competitors. WPP shares have lost half their value in just over two years as key clients pulled business from a company they see as too complex to navigate and short on marketing skills for the digital age.
Management consultancies such as Accenture Plc and McKinsey & Co. are boosting their marketing expertise as they help clients develop websites, e-commerce and smartphone apps
to serve customers who are
buying more through the internet. Facebook Inc., Alphabet Inc.’s Google and now Ama-zon.com Inc. are dominating the digital ad business, which is sucking dollars away from the conventional advertising that was long WPP’s expertise.
“It’s a very big hole to dig out of” for Read, said Michael Farmer, chairman and CEO of Farmer & Co., a strategy consultant who has written a book about the crisis facing the old ad agencies. “The jury is out on whether he or anybody could do anything about it.”
Once the challenger, WPP was already beginning to lose business with key customers such as Volkswagen AG and AT&T Inc. during Sorrell’s final years in charge. In October, one of WPP’s biggest and oldest clients, Ford Motor Co., cancelled its lead creative brief, wiping out as much as 1.5 percent of WPP’s revenue, according to Kepler Cheuvreux analyst Conor O’Shea.
Read has had a rocky start since he was named permanent CEO in September. WPP’s struggles in North America, its biggest market, forced a revenue outlook downgrade in October and Read froze hiring the following month in an urgent effort to rein in costs. The company wants to sell a majority stake in its Kantar data and market research unit, which could be
valued at about 3 billion pou-nds ($4 billion). WPP’s shares are down 26 percent since the departure of Sorrell, who went on to found an advertising
company called S4 Capital Plc.
Read “has the right idea,” said David Herro, deputy chairman of Harris Associates, which is WPP’s second-largest shareholder. “There was a mess he had to clear up.”
There have been some green shoots for Read, whose boldest moves to date have been to combine digital outfit VML with creative network Y&R and merging famed creative agency J. Walter Thompson with the more digital-focussed Wunderman, which Read led successfully before becoming WPP CEO.