WPP Defense of Ford, Mars Briefs Seen Tougher After Sorrell
(Bloomberg) -- Martin Sorrell’s departure as chief executive officer of WPP Plc comes at a sensitive time for the world’s largest advertising company as it faces an intense period of fighting to keep major clients.
Across the ad world, $10 billion of accounts is expected to be up for grabs this year, the most since 2015, according to Barclays media analyst Julien Roch. WPP had annual billings of more than 55 billion pounds ($78.7 billion) last year, the value of the gross amounts billed to clients for their advertising.
“The uncertainty created by a CEO transition might impact its chances of retaining or winning accounts,” Roch wrote in a note Monday. The concern created by Sorrell’s departure became apparent in the reaction of the stock, which declined 6.5 percent on April 16.
It’s typical for accounts to go into review as part of a procurement process, the company said in an email from a spokesman. “WPP retains them or not depending on the pitch process and the performance of the talented individuals at the operating companies providing clients with effective solutions,” the company said.
Sorrell was a key asset in getting new business, cultivating close relationships with CEOs and charming potential clients. Here are some key accounts that WPP will want to defend from rivals such as Publicis Groupe SA and Omnicom Group Inc. after his departure:
Auto-maker Ford Motor Co., one of WPP’s biggest and longest-standing clients, is currently reassessing its marketing model and said in November that it wants to agree to a further deal with WPP this year. WPP has a single entity -- Global Team Blue -- to service Ford. In 2016, Ford spent about $4 billion on advertising.
Confectionery giant Mars Inc. is amid a media review, according to Adweek. The account is currently split between WPP agency Mediacom, which handles the global brief, and Publicis subsidiary Starcom and Omnicom’s OMD, which does most local buying. Mars spends about $1.5 billion on buying ad space annually.
WPP agency Mindshare, part of GroupM, has handled media-buying for London-based bank HSBC Holdings Plc since 2013. As of January, that relationship is being re-evaluated, according to trade publication Campaign. The account is said to be worth about $400 million.
Europe’s largest energy company Royal Dutch Shell Plc is reviewing its global creative and media account, held by WPP’s J. Walter Thompson and MediaCom for decades, according to The Drum. The account is worth more than $200 million, according to AdAge.
Kimberly-Clark Corp., the producer of Kleenex tissues and Huggies diapers, is reviewing its roster of creative agencies, which includes WPP units Ogilvy and JWT, Adweek reported last month. Fellow consumer packaged goods companies Unilever Plc and Procter & Gamble Co., also major WPP clients, are similarly reviewing agency partnerships and looking to cut costs.
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