WPP’s finance man outlines changes within the agency
WPP’s outgoing CFO Paul Richardson revealed some of the company’s plans at a conference in Barcelona recently.
First he confirmed that WPP planned to sell up to 80 per cent of its research unit Kantar, hoping to keep between 20 and 40 per cent depending on the price.
Kantar has been valued at up to £3.5bn, which is close to a third of WPP’s current valuation. The sale was in order to reduce the company’s debt to equity ratio.
One third of WPP’s business faces “structural challenges,” needing to move away from big global agencies to be closer to consumers, more agile and cheaper for clients.
Presumably he means creative agencies although media agencies face some of the same challenges. Creative agencies will be combined with digital outfits he said, as has already happened with the takeover of Y&R by VML to form VMLY&R.
One such that always seems to be on the menu is JWT, currently embroiled in an embarrassing dispute at its London office with a number of white male creatives who’ve been made redundant complaining that this happened because they objected to remarks made by creative director Jo Cooper.
JWT’s story, it seems, is that it had to make redundancies as clients cut back and, being largely full of such white males (who are paid more than women there), they had to go.
The main problem for these employees and many others is that creative agencies are increasingly working on a project basis (rather than the old agency of record arrangements that sustained them for years) and can’t afford big, permanent staff when the projects go elsewhere. A number of WPP agencies are cutting back and Ogilvy in the UK is offering all its employees voluntary redundancy terms.
A consequence of this is the increasing use of freelancers, even for quite senior duties.
How times have changed in the new economy.
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