What WPP clients think about Martin Sorrell leaving

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Martin Sorrell at Stanford University in 2017.
Martin Sorrell at Stanford University in 2017. Credit: David Paul Morris/Bloomberg

Besides being ubiquitous in news media as the face of WPP and to some extent the entire agency world, Martin Sorrell was equally ubiquitous at client global meetings as his holding company's salesman-in-chief.

So will WPP's hold on clients fade away along with Sorrell? At least officially, clients have greeted the news of his retirement with a resounding "meh." Top clients including Procter & Gamble Co., Unilever, Johnson & Johnson, Ford Motor Co., Kimberly-Clark Corp. and Dannon either declined to comment, didn't respond to requests for comment, or said very little. A J&J spokeswoman said only: "Just want to confirm there is no change in our agency partnership."

But the reality is that Sorrell's departure is bound to make a difference to clients. He was legendarily "hands on" with his agencies and clients alike, known for relentlessly asking top marketer executives about their business challenges and needs, then trying to deliver solutions. Those included everything from creating client-specific shopper and consumer promotion groups for Unilever and K-C to building multidisciplinary agency teams for Ford and Colgate-Palmolive Co.

Sorrell will be hard to replace for clients and WPP alike, says former P&G chief marketer and now industry consultant Jim Stengel. "There was nobody like him," Stengel says. "He was close to every client. You just picked up the phone when he called."

At the same time, Sorrell may have become a liability, at least symbolically, in an era when big clients under pressure to grow profit margins amid sluggish sales growth turned to agency fees as a seemingly bottomless bucket of cost savings. Clients haven't criticized Sorrell directly in this process, but his legendary pay packages and public comments may not have helped things for WPP.

WPP declined to comment for this story. Representatives for Sorrell did not comment by press time.

P&G Chief Brand Officer Marc Pritchard has made pointed comments in recent months about less than half of agency resources broadly being spent on creative resources. He'd like his shops to at least be spending more than half their budgets on creatives. He never singled out Sorrell, but the WPP CEO's huge pay packages have been the most obvious example of where agency resources are going other than to pay creatives (something Sorrell during his long career never was).

Other big CPG clients Unilever and Johnson & Johnson also have been pushing either to cut the number of agencies they work with, streamline agency models or make fewer ads to improve speed and cut costs.

None of the CEOs of those companies are exactly paupers. But Sorrell's overall compensation in 2015 and 2016 was bigger than that of P&G, Unilever and Johnson & Johnson CEOs combined. (That likely came to an end last year, given WPP's disappointing results and a corresponding reduction in Sorrell's bonus.) But through it all, one of the most outspoken critics of agency fee cuts by big CPG clients was none other than Sorrell.

"He's gotten more angry and frustrated over the years at the 3G effect [named after cost-cutter 3G Capital, principal owner of Kraft Heinz and Burger King] and zero-based budgeting and procurement's effect and clients not focused on growth," says a consultant close to several marketers, who asked not to be identified. "He's gotten kind of bitchy about it without offering any solutions. And then at the same time he's taking home this handsome compensation package."

WPP under Sorrell also was seen by many in the industry as the most aggressive holding company at finding creative ways of increasing media revenue even as clients squeezed fees tighter. Though no cases of undisclosed rebates or contract violations involving WPP ever became public, executives of GroupM were open about efforts to make money off arbitrage or reselling media inventory to clients whose deals allow it.

But amid pushback led by the Association of National Advertisers, such dealing came under increasing scrutiny in the U.S. More clients demanded and exercised audit rights or moved programmatic buying in house or into proprietary exchanges and away from outside shops like WPP's Xaxis that could take their own cuts of digital deals. WPP is seen by some media consultants as the holding company most likely to resist tough audit terms or demand to approve who could audit its media shops.

Sorrell's departure, combined with those of former GroupM North America CEO Rob Norman and Chairman Irwin Gotlieb, means three of the people most responsible for WPP's media efforts in the U.S. (and beyond) have stepped down from their posts in less than six months.

Sorrell's departure comes as WPP faces some big reviews where his close client ties might have helped.

One immediate task for the new CEO is securing WPP's massive Ford account, which is parked at WPP's Global Team Blue. The relationship is under new scrutiny as the automaker reevaluates its marketing model under new leadership, including Jim Hackett, who was named Ford CEO last May, and Joy Falotico, the former Ford Credit CEO who was named chief marketing officer this past March. Ford notified WPP late last year that it was re-evaluating its "future internal and external marketing model," according to a regulatory filing. It is part of a larger corporate "fitness" initiative that includes slashing $14 billion in spending on materials and engineering in the next five years. Ford spokespeople did not return emails for comment.

Similarly Kimberly-Clark in March launched a review of its global creative account, which had been led by WPP shops JWT and Ogilvy & Mather. K-C executives and spokespeople likewise didn't return emails for comment.

Such reviews come as other holding companies appear just as adept as Sorrell's WPP once was at cobbling together solutions that span networks. Publicis Groupe CEO Arthur Sadoun has won praise from Pritchard and Walmart U.S. Chief Marketing Officer Tony Rogers for putting together teams that span Publicis shops but also include rival holding companies or independents on client-specific groups. J&J has developed a similar approach in North America involving not just WPP, but also Omnicom and Interpublic shops. Omnicom developed a cross-holding-company We Are Unlimited agency for McDonald's in 2016, similarly taking a page from what was Sorrell's old playbook.

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