The man brought in to help steady the WPP ship following CEO Sir Martin Sorrell’s controversial resignation has quashed speculation that the group will break up.
In a leaked memo to employees obtained by AdWeek, Mark Read – who has been jointly appointed with Andrew Scott as chief operating officers of WPP – said a potential break-up of the group, which has been heavily speculated, is not viable.
“We don’t believe this makes sense. In a world where clients need faster, more agile, integrated solutions, we need to get closer together – not further apart,” the memo said.
You can read it in full below:
To everyone at WPP,
Over the last four days I’ve spent as much time as possible speaking to our people and clients. There’s universal admiration for Martin’s achievements, and sadness about his departure. At the same time, there’s a huge amount of support and goodwill for the company, and no shortage of confidence about the future.
That confidence is well founded. The companies and client teams that make up WPP are exceptionally good at what they do. They are major organisations in their own right, with their own strong leaders. The clients I’ve spoken to have all been clear: they value their partner agencies and teams, they expect them to continue to deliver, and they have no doubt that they will.
Andrew and I have been given a very clear brief by the board. First, to run the business on a day-to-day basis. I’m looking after people, clients and companies and Andrew is focused on operational and financial performance and managing the WPP portfolio. And second, to move forward decisively on the group’s strategy. We have tremendous strengths within WPP, and we plan to build on those while bringing our own perspective and ideas.
WPP’s greatest strength is the depth and diversity of our talent (meaning you). We’re working closely with the leaders of our companies, and listening carefully to their views, as we develop our plans.
Some things we know already: we’ll get even closer to our clients to better understand and meet their needs and to help them grow in a world of disruption; we’ll get closer to technology partners like Adobe, Facebook, Google, Microsoft and others; we’ll make sure our structure and offer make it as simple as possible for clients to access our services across the group; and we’ll put data, technology AND creativity at the heart of what we do.
There’s been speculation about breaking up the group. We don’t believe this makes sense. In a world where clients need faster, more agile, integrated solutions, we need to get closer together – not further apart.
We’ll share more as soon as we can but, in the meantime, if you have questions let us know and we’ll do our best to answer them: email@example.com firstname.lastname@example.org.
WPP is a great business with outstanding people, world-class agencies and most of the world’s leading companies as its clients and partners.
Nothing that’s happened in the last week has changed that.
Chief operating officer, WPP
However, one media analyst predicts the company’s shareholders want to break it up.
Speaking to Campaign, Cenkos Securities’ Alex de Groote said WPP’s constituent parts, particularly the health and digital divisions, are worth a lot more more than the group’s current share price, which has dropped more than 40 per cent from its peak in February last year.
According to de Groote, shareholders in other rivals such as Omnicom, Interpublic Group and Publicis Groupe would look to make similar moves if WPP did in fact break up, which he forecasts to all happen in the next 12 to 18 months.
“Once WPP breaks up, the pressure on the other guys will be irresistible,” he said.