Martin Sorrell emphasises on consolidation and cross-group capabilities for WPP's growth

As WPP reports a 0.9% fall in 2017 net sales and a 0.3% drop in annual revenues, Martin Sorrell, the CEO of the global advertising and communication giant,has stressed the need for further simplification of the structure of the holding company and the development of key cross-group capabilities in digital for growth.

“As we build an increasingly unified WPP, we are focusing on a number of areas that will allow us to deploy our deep expertise with greater flexibility, efficiency and speed. These include: further simplification of our structure; stronger client co-ordination across the whole of WPP, including greater responsibility and authority for global client teams and country managers; the development of key cross-group capabilities in digital marketing, digital production, e-commerce and shopper marketing; further sharing of functions, systems and platforms across the group; and the development and implementation of senior executive incentives to align them even more closely to group performance,” Sorrell said.

Conceding that 2017 was not a pretty year, with flat like-for-like, top-line growth, and operating margins and operating profits also flat, or up marginally, Sorrell said, “The major factors influencing this performance were probably the long-term impact of technological disruption and more the short-term focus of zero-based budgeters, activist investors and private equity than, we believe, the suggested disintermediation of agencies by Google and Facebook or digital competition from consultants.”

Sorrell said the most successful agency groups in this environment will be those who offer simplicity and flexibility of structure to deliver efficient, effective solutions –therefore growth – for clients.“With this in mind, we are now accelerating the implementation of our strategy for the group,” he said.

“For many years we have placed ‘horizontality’ at the heart of our strategy by presenting clients with tailor-made and seamlessly integrated offers to meet their specific requirements. Over the last year, we have begun to apply that philosophy to the structure of the group itself by simplifying a number of our operations,” said Sorrell.

Sorrell said as the industry continues to undergo fundamental changes,they are upping the pace of WPP’s development from a group of individual companies to a cohesive global team dedicated to the core purpose of driving growth for clients.

“We start this new phase of our journey from a position of market leadership, and with total confidence in the enduring value of what we offer our clients. We will report at every opportunity on our progress,” he said.

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