Advertising is a tough business that seems to get tougher by the day. One day you’re on top, enjoying long lunches and VIP invites to the best parties in Cannes. Then a new day dawns and you’re out the door just like that, left to wonder what happened and what’s next.
Derek Thompson of The Atlantic argues that “the future of the advertising business is being moved to technology companies managing ad networks and media companies making branded content—that is, away from the ad agencies.” There’s a mountain of data to back up his claim, including this new data point: WPP is to cut 3,500 jobs worldwide and shut or merge almost 200 offices as the embattled advertising group seeks to restructure after a torrid year
According to The Guardian, WPP will cut 3,500 people from its 134,000 global workforce. WPP said it would hire 1,000 creative staff as part of a refocus on the group’s roots, meaning the net job losses would total 2,500.
The WPP chief executive, Mark Read, who took over after Sir Martin Sorrell was ousted in April, said the company had become “unwieldy with too much duplication” to operate efficiently in the digital age.
“We are fundamentally repositioning WPP as a creative transformation company with a simpler offer that allows us to meet the present and future needs of clients,” he said.
Merged: Wunderman Thompson and VMLY&R
One thing we know. WPP is transforming the agency business by elevating its marketing services providers. Both Y&R and JWT, two legendary advertising agencies, are now part of a much larger whole.
Wunderman Thompson is the latest WPP concoction. The news of the merger comes two months after WPP announced the merger of legacy shop Y&R with VML to make VMLY&R.
To better understand these moves, let’s look at the numbers. According to Ad Age, Wunderman, the marketing services group, saw 2017 worldwide revenue grow 3.5 percent to $1.63 billion from $1.58 billion in 2016, according to Ad Age Datacenter estimates. JWT’s 2017 worldwide revenue fell 9.3 percent to $1.34 billion from $1.48 billion a year prior, according to Datacenter estimates.
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