Labor Day means a welcome 24-hour pause for Madison Avenue. Despite the fact that the vacation isn’t a fixture throughout the pond, it’s one of many quieter working Mondays on Britain’s calendar.
However for Cindy Rose, it’s the start of an unlimited (and sure exhausting) job: working WPP in its post-imperial period.
Insiders acknowledge the corporate is struggling. Outsiders say there’s no magic bullet. It’s as much as Rose to discover a solution to first stabilize the as soon as market-leading agency after which flip its fortunes round.
Cindy Rose’s first day
To recap, Rose is ready to function the third CEO of WPP following an announcement in June that Mark Learn — the previous Wunderman boss, who succeeded founder Sir Martin Sorrell seven years in the past — would retire this yr. A former Vodafone and Disney govt, the British-American legislation grad arrives with a stable observe report working the operations of main companies; underneath her management, revenues at Microsoft’s British enterprise surged. And though she hails from the company tech sector, Rose has been a member of WPP’s board since 2019. (A WPP spokesperson declined interview requests for each Rose and Learn).
Her insider-outsider standing makes Rose an intriguing choose for the job. She’s seen the holding firm big from inside, from with out and from the angle of a consumer, courting again to her Vodafone and Disney days. And in hiring her, WPP’s management have made a tacit confession that the options to its many challenges are unlikely to return from inside the promoting enterprise.
“I gained’t sugar coat this,” she advised WPP workers in a video deal with launched final week. “We now have plenty of onerous work forward, and naturally, it gained’t be straightforward.”
Learn is predicted to stay round till Dec. 31 to facilitate a handover. However from at present, all eyes might be on Rose: on her means to coax spend from purchasers in an unsure financial system; her means to steer competing personalities at twin courts of Sea Containers Home and three World Commerce Middle; and her tackle the corporate’s existential issues.
Hearts and minds
Holding purchasers contained in the tent might be high of thoughts for the incoming CEO. High company execs usually spend plenty of their time shoring up large accounts. No matter her background, Rose might be anticipated to fix fences.
“WPP is in free fall,” stated one former WPP govt, who’d handled Rose throughout her tenure on the board. “If I’m her, I’m spending time with purchasers and entrenching. I’m making some very onerous decisions as to which purchasers we’re going to maintain, and I’m doubling down on them as being a part of no matter WPP bottoms out to,” they added.
Within the quick time period, gaps in WPP’s high crew supply alternatives for Rose to make her stamp on the group. COO Andrew Scott is ready to retire, whereas CMO Laurent Ezekiel left earlier this yr; each positions might be essential to impact inside change after which promote its outcomes to purchasers.
It’s a activity she’s well-suited for. “She’s bought the power to create very highly effective arguments, and has been ready to try this properly with clients and purchasers, in addition to together with her crew. That’s served her very properly all through the course of her profession,” stated the exec, who exchanged anonymity for candor. “I feel she’s going to have the ability to recruit some actual expertise again into the community, and I’m fairly longing for what she will do to reinvigorate WPP.”
Regardless of huge investments in AI and advertising automation, WPP stays a individuals enterprise. However, the morale of its staffers is low following consumer losses and redundancy rounds; job losses amounted to 4,000 positions this yr alone. Rose has scheduled a company-wide city hall-style assembly throughout her first week, throughout which she’ll area questions from throughout the agency.
If she’s to revive confidence to its inside groups, to purchasers and to potential expertise selecting their subsequent profession vacation spot, growing that into a totally fledged hearts-and-minds marketing campaign may not be a nasty thought. “If I’m Cindy Rose coming in, the very first thing I’d wish to deal with is ensuring that I’ve the best individuals [and] that they’re completely satisfied and that they’ve perception in my management,” stated Gartner analyst Jay Wilson. “That in the end goes to result in higher consumer confidence and higher market differentiation.”
WPP isn’t alone in making layoffs proper now; Omnicom and Interpublic have been reducing jobs upfront of their (but to be concluded) merger, whereas Dentsu’s management just lately vowed to cut back its headcount by 8%. Rose’s problem is that WPP is unlikely to be achieved with the work of winnowing its enterprise.
“It’s nonetheless a really complicated mannequin, and there’s nonetheless plenty of territoriality inside the varied businesses,” famous Wilson.
“An unlimited quantity of streamlining nonetheless must be achieved,” added Nick Manning, a former co-founder of Manning Gottlieb OMD who now owns mentoring enterprise Encyclomedia, which advises firms within the media and promoting business. Although WPP is properly on the best way on its transition from a holding firm to an working firm, its rivals are farther down that street. It implies that Rose’s strategic path doubtless follows of their wake.
“Whether or not she likes it or not, Cindy Rose is simply going to need to emulate what Publicis have achieved,” stated Manning.
Mergers and acquisitions
Apart from snapping up Infosum, WPP’s rumored preliminary talks with Accenture have been its most notable transfer on the deal desk recently. May Rose be coming in with a break-up on her thoughts?
Madison & Wall analyst Brian Wieser stated it’s a risk. “It’s believable that she’s primarily the voice of the board… does that imply that she’s there to place it for a sale as effectively as potential, whereas plausibly being seen to guide the corporate into the longer term? Or was the board of a thoughts… to let her work out on her personal what the best course ahead is? My guess is it’s extra of the previous than the latter.”
Whereas she is perhaps anticipated to contemplate potential provides with much less sentimentality than an advert company lifer, observers counsel WPP’s outlets may show tough to digest for potential patrons, whether or not they’re backed by personal fairness cash or consultancy money.
“These entities, as soon as separated from the sources and the WPP working system … it has a unfavorable affect on valuation. They’re definitely extra succesful when collectively, and subsequently doubtlessly extra precious when collectively,” stated Forrester analyst Jay Pattisall.
Following a long time of aggressive enlargement underneath Sorrell, WPP has opted to consolidate, moderately than dump, its companies in recent times – apart from PR concern FGS, which it bought in 2024. The proceeds of that deal – some £600 million – went to pay down the holding firm’s debt, a longstanding, unfulfilled ambition of Rose’s predecessor. As of H1, the corporate nonetheless has virtually £3.4 billion ($4.56 billion) of web debt on the books – virtually twice its annual web income and double the leverage of rival Publicis Groupe, which holds €836 million ($975 million) of debt.
Ought to WPP shed any limbs, Rose must select between investing in its enterprise now, versus decreasing its burden and releasing up money farther down the road.
WPP Media is the holding firm’s income engine, representing about 40% of its annual revenue. It’s on the coronary heart of its AI hopes following the launch of Open Intelligence in June, and it’s the place WPP could make the largest fast good points.
The community will want continued care and a focus to make sure that a far-reaching reorganization undertaken earlier this yr delivers the specified affect. However with lieutenants like Brian Lesser again in cost, Rose may delegate WPP Media’s course. A current Mastercard account win gained’t flip across the stability sheet, however proves the agency’s providing is getting a good listening to. And within the company world, the notion of wins tends to beget extra wins — simply ask Publicis.
“It exhibits that the proposition in the best circumstances can work within the market,” stated Pattisall.
WPP’s inventive businesses, together with VML, AKQA and Ogilvy, arguably demand extra focus. Whereas principal-based shopping for has helped massive media networks defend their margins, inventive businesses face existential threats as their remuneration fashions come underneath stress from budget-conscious purchasers.
Gartner’s annual CMO survey confirmed common advertising budgets have been flat this yr, at 7.7% of general firm revenues, whereas the proportion of budgets awarded to businesses fell simply 20.7%. Between the long-term in-housing pattern and the expectation of AI-led financial savings, company companies like WPP are being squeezed.
“Considered one of [Rose’s] high challenges goes to be lifting her inventive businesses out of the commodified surroundings,” stated Pattisall.
The corporate’s eventual response to these questions might find yourself defining its future. “It’s a large problem,” stated Manning. “I don’t know that anyone’s bought the reply to that one.”
