WPP, in the first six months of the year, gained 19 big clients with total billings of $US626 million ($AU927 million), according to briefing papers released with the company’s results for the first half to June.
And then in July, after the close of the financial year, WPP picked up eBay with billings of $US250 million ($AU370 million). MediaCom won the business from OMC, Publicis Groupe and IPG.
Mark Read, the new CEO rebuilding WPP following the departure of founder Sir Martin Sorrell, set out the group’s new strategy in December last year.
Eight months later, he says the company has seen six months of good progress.
He was speaking after releasing better than expected first half results, with organic revenue slipping less than forecast and a number of big client wins.
In a briefing to analysts, Read pointed to GroupM as a particularly strong business with technology clients.
Fast-growing markets, such as India and Brazil, put in very strong performances in the first half of the year, he says.
But the US is the main game with a focus on leadership, structure, strategy, investing in creative talent and technology.
“I think the team there is really focused on winning new business,” says read.
“Overall, I'd say our clients are responding well to the new strategy.
“We've seen good retention in key clients. I think last year, from the beginning of the year really through to September, we did have some pressure on clients.
“And this year we've seen strong client retention. We haven't really lost a major client during 2019 and we've had a solid string of new business wins, really from the beginning of the year.
“Pick out L'Oréal in the U.K., where we retained the media business with an expanded remit. eBay, where we had some business in Europe, really won that business globally. And Instagram, where Ogilvy were appointed the creative agency representative.”
Read expects expect further progress in the second half of the year.
“We are facing headwinds from account losses that really started in the beginning of last year through to September,” he says.
“They will continue to impact performance in 2019 but we really had a very strong performance in retaining clients during this year.
“So we do expect that to tail off towards the end of the year. And broadly speaking, we are on track to meeting the 3-year targets we set out in December.”
The strategy had two goals: return the business to growth reduce debt through the sale of majority stake in data business Kantar.
The company last month announced it is selling a majority stake in Kantar to Bain Capital Private Equity for GBP2.5 billion (AUD4.48 billion). The cash will be used to pay down debt and to return capital to shareholders.
WPP has sold 44 business units over 15 months. The company says it has 80 planned closures by the end of 2019, with 68 already gone.
Read’s report card on his five point plan for WPP:
- An ambitious vision for WPP as a creative transformation company, "help our clients grow".
- Recommit and reinvest in creativity “which we believe is WPP's sort of secret weapon or really the source of our competitive advantage”.
- A more deliberate and top-down approach to technology and data, to focus on how it is used marketing. “We're making good progress there.”
- Simplify WPP to make it easier for clients to navigate to get the best of WPP and “easier for us to manage the business".
- Build a culture at WPP to attract the best talent, the best people. “And against each of those, I think we made good progress.”
“We really wanted to shift our offer into the faster-growing parts of our business,” he says.
“They tend to be the parts of our business that are more technology-driven and critical to our clients in terms of how they grow.
“I think it's important, people talk about disruption of our business, to see that WPP is actually a major beneficiary of the growth in technology.
"Just to call out our sort of big tech clients are growing 16% in the first half of the year. If you look at our top 20 clients, they do include Google, Microsoft, Apple, IBM and Dell. So we do have a really strong position.
“We'll see that in the wins that we've made with clients and an increasing technology-driven approach to what we're doing.”
Another growth area is luxury goods, with client growth at 7%.
In the first six months of the year, the business wins:
And new clients and expanded business:
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