WPP group plc - Sir Martin Sorrell on the recession
May 11, 2009
Sir Martin Sorrell on the succession, the recession and the overall future of the Advertising Agency WPP group plc. Several Videos have come out over the weekend that discuss the future of the company and it’s overall direction.
He states that for the past 6 years they have “reviewed” all 600 of the “top” employees of WPP group and it just happened that the media was clinging to the review of himself. In other-words he said he isn’t going anywhere “until the board of directors thinks I am too old and feeble”. Some feel that happened decades ago.
Regardless, enjoy the below videos, please state your thoughts.
Foxnews:
Now the kicker, WPP has pushed out this video on how to advertise during a recession, and how to survive during the recession. If we were to follow the advice that WPP group does rather than what they publish on the video, we would simply fire everyone.
But alas that isn’t the content of the video..
The UK Times:
Thoughts?
Ogilvy loses Ericsson
May 6, 2009
WPP group plc owned Ogilvy Worldwide has lost their pitch to Ericsson. Ericsson has allocated their budget instead to Lowe Worldwide. This is another stunning defeat for Ogilvy, and points for even more layoffs within the Advertising Agency.
Ogilvy has rearranged the deck chairs so many times in the past few months that it’s hard to keep track who is doing what within the firm anymore.
The review, which took about 10-12 weeks from start to finish weeded out the early losers such as incumbent, Publicis, and McCann Erickson.
At the end it was Ogilvy vs Lowe, and Ogilvy came out second best.
If this continues, Ogilvy will be sitting in the same boat their sister agency is, Enfatico. Who wants to be part of that sinking ship?
Ad Agency WPP Group plc in “mass firing” mode
May 4, 2009
WPP group plc has sent notice that they are cutting anywhere between 7,500 to 10,000 employees. The job cuts are deep and across the board. The 10% reduction in headcount is relative to the 10% loss of business as per George Parker
The problem that we are seeing is that there is limited “senior management” removals other than at Ogilvy, where Chris Wall will be out by July. Steve Hayden will take the reins until a Chris Wall successor is found. David Apicella is out, again as per George Parker.
Advertising Agency, WPP group plc is facing a substantial debt load that is starting to hinder it’s ability to retain talent. In 2009, it still has very limited capability in hot advertising areas such as social media and search engine optimization. Forcing the company to lose revenue as those higher ROI items are being outsourced to non-WPP group companies, and during this recession it’s all about ROI … and not about branding in other words, consumers and businesses are not willing to pay a premium for a “brand name” when their own balance sheet looks ugly.
There is a reason Wal-mart isn’t hurting as much as Neiman Marcus during this recession ..
Someone forgot to tell WPP that this is out of style.
WPP group plc loses Olympic Bid
April 29, 2009
In another dismal report, WPP group has totally lost focus of it’s primary advertising agency core. The UK Guardian is reporting that US advertising agency McCann Erickson has reportedly beaten Sir Martin Sorrell’s British WPP group for the contract to promote the 2012 London Olympic Games.
What this means is simply that Sir Martin spent way too much money buying non-core assets and neglecting advertising, Neglecting digital, SEO, SMO… it’s a playbook of what NOT to do right.
To the point where the London (soon to be Ireland) based WPP assets lost the London Olympics…. uhh…. that’s really bad..
The company revenue crashed 6% in 90 days, leaving little new business coming in, and huge amounts of business leaving the door, such as Dell inc with a rumored 90 day notice…. (unverified but widely suspected as being true).
It’s really time for new management, buying revenue at an extreme cost while neglecting the assets that gave you the opportunity to get revenue in the first place is foolish at best…. and at worst gives you 6% revenue declines every 90 days….. as what we have been seeing.
WPP group plc ad revenue tanks 6%
April 28, 2009
We are having a good time to see how the media is spinning the WPP group plc financial statement. An article on Yahoo says “Revenue Jumped 36%” as the headline, however forgetting to mention the crushing debt that was needed to purchase the firms to increase revenue… sort of like taking a loan with a 6% intrest rate of $100 dollars to get an additional $3 dollars a year in revenue…
there is no way about it, their like-to-like revenue has crashed 6% and the debt payments most likely will increase pressure on the company to continue “cost cutting” — IE: layoffs.
Don’t believe us, here is their complete revenue sheet.
Did Dell give WPP group plc 90 day notice?
April 23, 2009
Has Dell Inc. given WPP group plc owned Advertising Agency Enfatico / Y&R 90 days to “turn the boat around” or risk losing the $4.5 billion dollar account?
Speculation has been floating for months now that Dell has been looking at cutting their losses with WPP, but today a published report has surfaced written by Matt at Agency Spy that Dell has given Enfatico and Wpp Group plc 90 days notice… or better said the CEO of Y&R all of a sudden has come up with a definite timeframe to fix the problems…. where did he get that timeframe?
The account is so massive in size that it’s expected to put a serious dent in WPP’s financials if Dell does jump ship… and from the reports we are reading Dell has already started strapping on life preservers with other non-WPP owned Ad Agencies.
Advertising Age is SO wrong
April 20, 2009
Advertising Age is arguing that Enfatico was just poorly executed and overall not a bad idea.
If you wanted a fully functional advertising agency dedicated to a sole client, then go to Detroit or Chicago, and pick up any one of the dozen agencies sitting there with hardly any business coming in.
“Although WPP’s custom-built agency for Dell never got off the ground before it was folded into sibling shop Y&R this month, that doesn’t mean a marketing structure built for a single client can’t work. ” screams Adage
It then goes on to rail about Enfatico’s talent problem. “Then there’s the talent issue. As any recruiter will tell you, it’s not easy attracting top-notch talent to a shop that’s focus is just one client, and keeping good talent in such an insular culture is even harder — so there have to be measures that allow for some variety. ”
Well that’s the problem with any single client agency. Who is going to work for an agency where if the client leaves the advertising agency is forced to shut down and you lose your job.
But back to the main issue, if this model will even work? The answer is flatly a no, it’s not worth even entertaining.
See here’s the problem, you don’t build an advertising agency from scratch… complete with 10 year leases .. going on a monster scale like that… because they will never get the proper talent and the model simply cannot work.
If Dell wanted an advertising agency dedicated to them, simply floating out an RFP to the advertising agencies that just don’t have that many clients would fix the problem.
If an ad agency has 3 clients, all averaging about $100 million a year… then Dell walks in with $4.5 billion… the advertising agency is dedicated to Dell… end of story..
But this is where it matters and where Enfatico went wrong, see that hypothetical ad agency mentioned in the paragraph above already has a billing department, already has a creative department, already has a media department, already has an office, phone system, computer systems, everything is already there and just needs to be expanded on… whereas where Dell and WPP group plc went wrong has all the aspects needed didn’t exist.
It was doomed to fail from day one. The day Sir Martin and Michael signed that contract… it was $4.5 billion floating in promised money with nothing else.
You can’t build an advertising agency like that… and clearly Enfatico proves that it cannot happen.
Dell blew a ton of money on this project, and WPP blew a ton of time on this project…. and the funny thing is that virtually everyone knew that this was a bad idea from day one… We even created an official countdown clock from the day the project was announced till it collapsed… we setup the site from the day it was announced… meaning we just were counting the days until it crashed… it wasn’t rocket science, George Parker, Media Bistro even the New York Post, a dying industry itself, all said this is a bad idea.
What an epic failure… and adage, you might want to rethink that article…. this model can never work….
There is a reason the common term “one trick pony” is derogatory.
Ogilvy accused of over-billing - lawsuit
April 16, 2009
My friend at Media Bistro, Superspy has dug up the dirt on WPP group plc owned Ogilvy NY… according to the lawsuit (we have seen ourselves and can verify the contents of the PDF file).. that Ogilvy has been accused of over-billing their clients, wrongful termination of the whistle blowers and overall horrific ethics practices within the advertising agency.
In short, it paints the ad agency as a politically filthy institution that is ripe with internal politics and dirty tricks.
Truly dirty stuff… we wish them the best.. or at least what they deserve if proven true. Over-billing clients is a moral crime, if not a legal one.
Superspy @ Media Bistro Defends Enfatico
April 14, 2009
“AdAge is wrongly assigning blame to Enfactico and yes, I’m defending them” was written by SuperSpy… yes.. the famous SuperSpy at MediaBistro!
This deserves an article by itself, mostly because SuperSpy is one of my favorite bloggers and I do consider her one of my friends, but honestly for as well versed and smart she is, she is really wrong on this one. She is lambasting the adage article written by Rupal Parekh that we cited in our article
Here are the two major tidbits on her story:
1. Agencies very, very rarely get to just go ahead and purchase URLs for clients who generally, demand all sorts of approvals before anything is ever done. We don’t have carte blanche like AdAge is implying. It’s possible that Dell stalled on Enfactico’s request and/or just decided not to purchase it. Anyone who has worked in an agency knows this is very possible. AdAge is wrongly assigning blame to Enfactico and yes, I’m defending them. I can’t believe it either, but right is right and this assumption is wrong.
The red tape problem you mentioned with this could have been settled easily with a phone call or an e-mail to Dell for approval. Afterall Dell has no problem spending 4.5 billion for advertising for 3 years, and they have a long history of buying domain names for their products.
Clearly http://www.inspiron.com goes to Dell … so why wouldn’t their other trademarked products. Such as the ADAMO covered by Trademark number:
77518661
and
77542633
Feel free to look them up at the US Patent and Trademark office There is no legal concern here, also worth noting that someone was already sitting on the domain… that had no legal right to it in the first place, Dell / Enfatico could have easily used the WIPO procedure hold up their already owned trademark and recieved the domain name using the legal framework that punishes cybersquaters and awards the trademark holder.
That being stated, I am now completely at a loss regarding how BDA’s appear to work, because we do everything in our power to help the client, including buying a domain name for them, making them the legal owner of it and just making us the technical contact. This is a no-brainer if the client already has the trademark.
Now for the worst part of this:
YOU MEAN TO TELL ME THAT THE DOMAIN NAME AND WEBSITE HAVEN’T BEEN DISCUSSED FOR THE PAST 2 YEARS WHILE THE PRODUCT WAS BEING DEVELOPED?
This is mind baffling, Enfatico hasn’t spoken to Dell about that domain name for the past 2 years while the product was getting ramped up for launch? WTF was going on?
Generally, we are looking at domain names even before looking at Trademarks, what’s the sense of owning a trademark if you can’t even brand it properly with a corresponding domain name?
This is not rocket science, this is good business.
Now for part 2 of the article:
2. The brand isn’t actually called Adamo. It’s called Adamo by Dell, so why would they even be interested in Adamo? Often, brands purchase similar URLS for their product and have it redirect users to the main client site. We all know this, as well. Dell already owns Adamobydell.com. What it sounds like is that the company was unsure as whether to fork over $750 for a like-minded URL.
Inspiron by Dell seems to go to http://www.inspiron.com … Next time I will try go go to “Wii by Nintendo” … but that seems to go to Wii.com ..
This is 101 in online Advertising, you make it as easy as possible for your potential clients to find you, that means using the common “street name” and “plain speak” of the products you sell if not offending…
oh.. and there was a third part of the article I wanted to address:
There. Case closed.
Not. Even close.
In closing, this is a clear lack of understand of Digital advertising, it’s why SEO and SMO firms are growing at the expense of BDA’s … because it doesn’t get any plainer than this, they have no clue what they are doing.
Enfatico is run by idiots
April 13, 2009
Rupal Parekh at Adage really dug up the dirt on Enfatico! I had to quote the entire article, because it was so perfectly written that there is no other way to rephrase it, or add to it.
“Either Madison Avenue still has a ways to go when it comes to embracing Silicon Valley, or Enfatico’s problems are bigger than we thought. According to reports this weekend, the Dell agency refused to pony up $750 a month to lease Adamo.com — the most obvious domain for Dell’s new ultrathin laptop computer, launched recently to rival Apple’s MacBook Air. Luckily for consumers, that decision didn’t stick once Dell founder and CEO Michael Dell caught wind of the situation; the domain was eventually bought”
Did you guys read that? Michael Dell had to buy the domain name himself. What did he pay $4.5 billion dollars for when he has to go out and purchase domain names himself because of the gross incompetence of his advertising agency.
Rupal I have to say, it’s not just Enfatico, it is Madison Avenue altogether. W+K lost a nearly $2 billion dollar account for lack of SEO.. and yet still has not developed the internal skillset to do it.
What gets worse is that these holding companies and large ad agencies charge the clients for this service, yet do not have the technical skillset to implement it.
Embarrassed WPP? You need to totally revamp your business if you expect to stay in business, start off by trying to buy SEO and Social Media firms… and good luck with it… they don’t think like you do Sir Martin, and hence why you can’t see the value in it.
We hope that a potential loss of a $4.5 billion dollar account is a good shot across the bow.
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