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Monday Wake-Up Call: T-Mobile and Sprint join forces and Ad Age's State of the Agency World has some surprises

By Published on .

Welcome to Ad Age's Wake-Up Call, our daily roundup of advertising, marketing, media and digital news. What people are talking about today: In a move that will shake up the U.S. wireless market, T-Mobile agreed Sunday to acquire rival Sprint for $26 billion. Ad Age's George Slefo reports that the combined company, under the T-Mobile brand name, will be valued at $146 billion, including debt. The companies, currently the third- and fourth-largest carriers in the U.S., promise that the merger will accelerate deployment of 5G technology, lower prices for consumers and create new jobs.

Both companies will operate independently until the deal receives approval from regulators.

The brands are both major advertisers -- T-Mobile U.S. reported ad spending of $1.8 billion in 2017 and Sprint $1.1 billion. Publicis Seattle has been T-Mobile's agency of record for more than a decade, and helped create its "Un-Carrier" campaign. Sprint has an in-house agency, but also works with Droga5 and Horizon Media.

State of the Agency World

Ad Age's annual report has arrived, and it has some big news. The biggest? For the first time ever, digital work in 2017 accounted for more than half of U.S. agency revenue. However, as Ad Age's Bradley Johnson reports, that didn't translate into net gains, as U.S. agency revenue grew a sluggish 1.8 percent in 2017. Other takeaways from the report include: revenue is rocketing for consultancies; agencies are doing more firing than hiring; and revenue growth is slowing in all major disciplines. The full report is available now to Ad Age Datacenter subscribers.

WPP's post-Sorrell update

WPP issued a first-quarter update Monday morning, its first since the departure of CEO Martin Sorrell. It reported flat like-for-like revenue, down just 0.1 per cent, with the U.K., Asia-Pacific and Latin America like-for-like revenue up strongly, offset by declines in North America and Western Continental Europe. In a joint statement, chief operating officers Mark Read and Andrew Scott say: "Our priority is to focus on growth. We will proactively address the under-performing parts of our business and we need to ensure that our capital is deployed to those areas that will grow fastest and maximise shareholder value."

U.K. grocery mega-merger

T-Mobile and Sprint wasn't the only mega-merger to be announced over the weekend. In the U.K., Sainsbury's and Asda (in which Walmart currently owns a majority stake) confirmed that they're in advanced merger talks to create the U.K.'s biggest retailer. The move would allow Walmart to concentrate on its U.S. business, although, as the Wall Street Journal reports, it could retain a 42 percent stake in the combined company. The merged company would have 31 percent of the U.K. grocery market, outgunning current leader Tesco. British competition authorities will be looking closely at the deal.

On Friday, AMV BBDO learned it had won the Asda business. Two years ago, it lost the Sainsbury's account to Wieden & Kennedy London after a 35-year relationship. For now, Sainsbury's and Asda say they'll retain both brands.

Just briefly:

YouTube's live stream ads: YouTube will begin selling ads in its live TV stream, opening up more inventory in the streaming TV sector that can more precisely target specific consumers, writes Ad Age's Jeanine Poggi. YouTube will sell the time as part of its Google Preferred package, which aggregates the top 5 percent of YouTube content for advertisers. It plans to make the announcement during its NewFront presentation on Thursday.

Amazon gets (even) bolder: Not content with shaking up the world's retail markets, Amazon is making bold new moves into self-serve programmatic advertising. As AdAge's Garrett Sloane reports, it plans to spend the next year aggressively expanding the infrastructure that it hopes will get more brands buying ad space on its websites and through its ad platform.

Hip-hop Asia: Ad Age's Chen Wu talks to 88rising's Sean Miyashiro about his break-out role in hip-hop, the company's growing roster of Asian talent and more. While Miyashiro's profanity-laced interview is worth the read, there's also a bonus: a video with Wu-Tang Clan's Ghostface Killah and others watching and reacting to Indonesian rapper Rich Brian. Pure gold.

Roasting: The annual White House Correspondent's dinner was Saturday night, and comedian Michelle Wolf's go-for-broke routine has caused quite the stir. The New York Times reports that "late on Sunday, Margaret Talev, president of the Correspondents' Association, issued a statement acknowledging 'dismay' from members about Ms. Wolf's performance." President Trump tweeted, "Put Dinner to rest, or start over!" and former White House press secretary Sean Spicer weighed in, calling it a "disgrace" on Twitter, to which Wolf replied "Thank you!" As the Times notes, her most "cutting joke ... took direct aim at the journalists in the room. Mr. Trump, she said, 'has helped you sell your papers and your books and your TV. You helped create this monster and now you are profiting from him.'"

Avengers outguns Star Wars: Marvel's "Avengers: Infinity War" has wowed audiences, taking $250 million at the U.S. box office this weekend and $380 million globally -- and that doesn't even include China, as the Hollywood Reporter points out. It also smashed the previous U.S. box office record held by "Star Wars: The Force Awakens."

Creativity pick of the day: Volvo recently found a sneaky way of targeting growing families with a message about safety; it organized a casting call for pregnant women at dealerships in South Florida. The campaign, by We Believers, invited the expectant moms to audition to appear in a series of online videos for a Presidents' Day weekend sale. By getting them to rehearse lines about its safety features and technology, it subtly sold the women themselves on Volvo -- and used footage from the casting in promotional videos. You can see some of it here.

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