Whataweek for WPP.
Starting with the more recent news first, the advertising group has finally settled a 2016 lawsuit brought by JWT’s comms director, Erin Johnson, over (genuinely vile) allegations of sexism and racism by its CEO Gustavo Martinez.
Johnson has received a “substantial settlement”, according to reports. Meanwhile, Martinez – who left his job as CEO – will continue to work for WPP in Spain. (Ugh).
Too bad it was all done behind closed doors, however. That sort of stuff deserves to be aired in public, but as Johnson said this week: perhaps it will inspire confidence in others to speak up.
Then on to trouble at the very top of the world’s largest advertising group…
On Tuesday, WPP’s board – which has always pretty much given CEO Martin Sorrell the freedom to do as he pleases – announced it has hired a law firm to investigate an allegation of “personal misconduct” against him (the Wall Street Journal claims it’s investigating whether he misused company assets).[advert position=”left”]
Shocking? Yep. In some way politically motivated? Without wishing to speculate, we might say perhaps. But it’s pretty clear, judging by the immediate (and largely unwarranted) speculation over who would replace him, that the business and advertising worlds want to see change.
You can understand why, and it’s hard not to judge the news – light on details or not – without ignoring the other pressures WPP and Sorrell are already under.
In the last year WPP has cut its sales outlook three times after major consumer goods clients such as Unilever reduced spending, and as Google, Facebook and consultants Accenture encroached on its territory.
Then, despite investors expecting WPP to echo peers such as Omnicom and Publicis in sounding more upbeat about 2018, the company surprised the market last month by stating that it expected no sales growth at all this year.
Meanwhile, big name (and influential) clients like P&G and Unilever are tightening their marketing budgets and reducing the number of agencies they work with, looking instead to do more in-house. That, in turn, is putting serious pressure on all the holding groups which must find a better way to serve clients. Thus far, WPP has not offered a convincing solution.
If 2018 is to continue last year’s trend of delivering bombshells, scandals and the seeds of change, then the fate of Sorrell this year might determine just how strong that appetite really is.
Taken from Mediatel’s Friday bulletin – sign-up for free here.
