Simon Gwynn
Nov 28, 2018

Wunderman Thompson: Analysts and commentators on 'bold and aggressive' merger

Restructure proves shift in balance of power at WPP, sources say.

L-R: Edwards and JWT global CEO Tamara Ingram
L-R: Edwards and JWT global CEO Tamara Ingram

WPP's decision to merge J Walter Thompson with Wunderman, bringing to an end an agency name that has endured for 154 years, is a sensible move for the holding company, analysts have said. But more substantial changes could still be ahead.

Michael Kassan, chairman and chief executive of MediaLink, said he saw the move as a "bold and aggressive step toward creating an agency proposition that is simpler and easier to buy".

The pairing of the two businesses brought technology and data together with creative storytelling, Kassan said, adding: "The theory behind it is a sound one and I’m eager to see how—and how quickly—the output reflects the strategy."

Despite the move being painted as a merger, Wunderman was undoubtedly the brand "acquiring" JWT and not the other way round, according to Alex DeGroote, founder of DeGroote Consulting. He added that Wunderman’s goodwill value (its intangible assets) were valued by WPP at £1.5 billion (US$1.91 billion), behind only Group M and Kantar within the group.

"Be clear, alpha is eating beta," DeGroote said. "Growth and digital is winning over tradition and creative. Modernity is crushing history."

Although Mel Edwards, global chief executive of Wunderman, who will now have the same role in the merged agency, denied that it was a "a cost-cutting exercise", DeGroote said there would inevitably be job losses. "What this does to the WPP culture remains to be seen, but it must be disconcerting for many senior group execs, particularly in North America, the regional locus of the group revenue underperformance in recent times," he said.

DeGroote also pointed out that WPP’s share price had yet to significantly rebound after a slump at the end of October. "Under the bold leadership of CEO Mark Read, WPP was always going to be a 2019 story," he said. "But 2019 is now truly shaping up to be the 'make or break' year."

The merger could be compared with Omnicom’s decision to combine media agencies Hearts & Science and Rocket, according to Julie Langley, partner at Results International. "It's very deliberately putting data to the fore in a fundamental part of the network's offering.

"WPP is bringing together data and creative rather than data and media, though," she said. "Wunderman's heritage and DNA is in data-driven personalisation and in using data to optimise the customer journey."

The move was a logical response to client demand, Martin Vinter, head of UK media at Ebiquity, suggested. "Having to use up to three to five agencies results in inherent complexity that clients do not want, need or pay for," he said.

"CMOs have been clear with agencies that they want simplicity and access to agency talent and capability. Deploying tens of different capabilities smoothly requires a different model and often one that manifests itself in the form of one agency entity bring together core capabilities."


Campaign UK

Related Articles

Just Published

32 minutes ago

Skoda India parks creative mandate at Wunderman ...

The mandate was bagged following a multi-agency pitch, and the account will be led out of Wunderman Thompson’s Mumbai office.

42 minutes ago

Why TikTok is not the place to be for brands during ...

Before and after the game are a different story as brands “scratch the surface” of what they can do on the platform for big events.

54 minutes ago

Accenture brings on Magic Leap chief design officer ...

James Temple to head up Accenture Song’s metaverse capabilities, succeeding Mark Curtis, who is moving to its global sustainability studio.

1 hour ago

Arthur Sadoun interview: Publicis’ ‘profound ...

CEO talks to Campaign UK at Q4 results about rewarding talent and paying an average salary increase of 8% last year.