Former WPP supremo and now S4 boss Sir Martin Sorrell has continued his war against the holding companies – and not just WPP this time – again arguing they should go private or be sold off.
In an interview with US Beet.TV (which you can watch in full below), the 74-year-old said the problem for the traditional media giants was they were simply too big, trying to offer too many services to too many clients. Instead, he argued, clients wanted simpler, quicker and leaner structures.
Late last year, Sorrell called out WPP for its size and glacial speeds, suggesting the media buying group, the highly profitable GroupM, was the only part of WPP worth anything.
In his Beet.TV interview, Sorrell said:
- The big groups are like “cadavers ”
- They cannot transform as necessary while publicly traded.
- The threat from consulting groups has been there since the 1980s.
- Accenture should buy GroupM for $US15 billion ($A21.9 billion).
“The holding companies are really challenged,” Sorrell said. “They have the problems of all uncontrolled listed companies – companies that are not controlled by management and there’s separation between ownership and control.
“Companies that are controlled – a Google, a Facebook an Amazon, whatever – are much more long-term in their thinking because the management is not worried about being kicked out if they make a short-term mistake.
“To make the changes they have to make, you cannot do it with the microscope of being a public company … the focus and attention you get from analysts, from journalists, trade journalists, whatever it happens to be looking, every twitch of the body – or the cadaver, maybe, is more the appropriate analogy.”
On Accenture acquiring GroupM, Sorrell added: “It seems to me that it’s a no brainer for them. They’re capped at now, what, $125 billion? It wouldn’t be a flea bite (to pay), but it’s certainly capable and it will give them such an entry point to their ‘diamond club’, the top 200 clients that are all over $100 million. It would be a real shake-up. (As options), there’s (either) dismemberment or go private.”