WPP announces “radical evolution” — key points from investor day
WPP announced a “radical evolution”, as well as a new brand identity, at its investor day yesterday, Tuesday, 11 December 2018.
- The agency is repositioning as “a creative transformation company”, which aims to bring together creativity and expertise in technology and data.
- WPP’s future offer will cover four areas: communications (advertising, content, media, public relations and public affairs, and healthcare) , experience (new brand, product and service experiences), commerce (work with brands to help them succeed in marketplaces such as Alibaba and Amazon) and technology.
- WPP will be investing an incremental £15m a year for the next three years in creative leadership, with a particular focus on the US.
- Structural changes will see a more client-centric organisation, with fewer, more-integrated companies. The group will also integrate further at a country level “to leverage our strengths in individual markets”,
- WPP will retain a minority shareholding in Kantar.
- WPP has established an executive committee, drawn from both corporate and company leadership. This exco will work together to implement the new plan.
- WPP expects to deliver organic growth (defined as like-for-like revenue less pass-through costs growth) “in line with its peers” at a headline operating profit margin (excluding associates) of at least 15% by the end of 2021.
- The company will incur cash costs for restructuring of £300m over the next three years to deliver estimated annual savings of £275m by the end of 2021, approximately half of which will be reinvested in the business.
- WPP announced a “right-sizing” exercise that will result in 3500 job losses and 1000 new hires over the next three years, and disposal of under-performing businesses and the closure of unsustainable operations (Adweek suggests the closure of 80 unspecified local offices).
- Further development of campus co-locations.
- The establishment of a consistent shared-service infrastructure to support 30 countries over the next five years.
For more, go to wpp.com/about/who-we-are.
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