For decades, GroupM dominated the media marketplace, leveraging its client roster of top marketers with formidable spending power to secure a price advantage for clients.

But times have changed. The clout the WPP media investment arm once offered in traditional media is no longer the main driver for advertisers, who are increasingly looking for integrated, data-powered solutions—an area where GroupM has lagged competitors. As a result, the one-time powerhouse is no longer the top-performing media agency among its peers, marked by several years of account losses, leadership departures and layoffs.

That’s led to GroupM rethinking its role in the marketplace, and it’s now finalizing a massive restructuring in North America to simplify its offering for clients navigating an increasingly complex market.

Christian Juhl, GroupM’s global CEO, told Ad Age that scale is still GroupM’s greatest strength, but the agency network is trying to figure out how to leverage that, particularly in North America, where agencies have moved more toward integration than in other regions.

GroupM has an uphill battle, according to 17 industry sources, including current and former GroupM executives, media company executives and consultants, who note that GroupM has been behind on adapting to a data-driven mindset and creating the integrated offering sought by modern marketers. Some question whether the agency is too late to the game.

“GroupM’s new leadership has to plan seriously for the next decade where two main headwinds will threaten their growth: Firstly, the continuing trend for brands to build in-house media planning and buying capabilities means that companies like GroupM face losing scope and fees over time; and secondly, as all media eventually becomes bought programmatically, GroupM’s role as the leading aggregator of advertising dollars to negotiate better prices erodes quickly,” said Tom Denford, CEO and co-founder of consultancy ID Comms, which has overseen some of the biggest global media agency reviews, of which GroupM has been a part. “In an auction-based programmatic world, scale counts for little and discounts become meaningless.”

Still, GroupM remains a massive industry player, and will likely continue on as such, as long as leadership makes the necessary changes to adapt to the evolution in the industry.

“I’ve been around long enough to remember when it was Publicis that was going through this pain and losing tons and tons of accounts, was in a brutal place and they did a lot of consolidation,” said one media company ad leader. “They took a lot of time and now, 10 years later, here they are back to being in stride.”

A year of losses

WPP formed GroupM, which now houses media agencies including Wavemaker, Mindshare and EssenceMediacom, in 2003, when linear TV still dominated ad spend. The company became revered for its ability to get major marketers discounts in the upfronts, when advertisers make advanced commitments for the traditional TV broadcast year. 

“Media buying was relatively simple 20, maybe even 10, years ago,” said Matt Sweeney, GroupM’s chief investment officer. Back then, Sweeney said, media buyers knew the major broadcast and cable players, it was easy to manage reach and frequency across those channels, and digital advertising and testing programmatic capabilities were done on a much smaller scale.

Now, with so many platforms and so much emphasis on advanced technologies, clients need a “strategic partner” to help them figure out how to manage data and budgets efficiently given the size of the market and the cost of adding on capabilities, he said.

Sweeney, who has been with the company for 10 years, said the impact of digital media, programmatic buying and converged media planning “has been a long time coming, yet it feels real now. And I don’t know if I would have said that two years ago. That means we have to work differently. We have to organize ourselves differently.”

Over the last year, GroupM has had a string of account losses, particularly in North America, including Kimberly-Clark (Mindshare), General Mills (Mindshare) and Uber (EssenceMediacom). Ikea just moved its U.S. media account from Wavemaker to Dentsu’s Carat. Unilever, one of Mindshare’s biggest clients, is reviewing its global media account.

Several former GroupM executives and consultants attribute these losses, in part, to GroupM’s lateness in implementing data and breaking down silos to create a truly tech-powered, integrated offering for clients. They said the reluctance to shift from legacy media tactics, including relying on its scale and delivering for marketers through conflict shops, has caused client distrust.

More: Marketers are taking over reviews—how agencies can adapt

While Comvergence, one of the top marketing and advertising research firms, ranked GroupM third in global new business wins for 2023, behind Publicis Media and Omnicom Media Group, its data showed where GroupM struggled most last year: client losses. GroupM’s losses, estimated at $3.54 billion in client billings, were nearly double its closest competitors’ account losses individually, according to Comvergence.

Comvergence’s data showed the average client retention rate in 2023 was 25%, the lowest since 2016. Among the top holding companies, Publicis scored the highest retention rate at 61% versus GroupM’s 45% rate, per Comvergence.

GroupM’s organic revenue growth, i.e. growth from its internal business rather than external resources or acquisitions, in 2023 was also the worst it has been since 2020. In 2023, GroupM’s organic growth was 4.9% compared to 9.1% in 2022 and 16.1% in 2021; organic revenue declined 7.4% in the fourth quarter of 2020, according to Ad Age Datacenter calculations.

“I would have liked to have retained more clients than we did last year,” Juhl said. “We did come through a pretty significant review with Unilever just two years ago, and there’s a lot of work in defending that. We did win the consolidated Google business, the Coke business, Audible business, Discover; it’s not like [GroupM N.A.] hasn’t grown. But we had a couple of key losses that hurt us. Returning more towards client centricity, aligning the product, really making sure that we’re hiring the best and the brightest in the industry, are fundamentals to the success for North America.”

One consultant said there is still a place for these major holding company media offerings, as some clients “need boots on the ground in lots of markets,” and that’s something GroupM provides.

“Do they have tremendous momentum behind them? Maybe not this year,” said the consultant. “As [brands] spend less money on linear TV, the more [holding company networks like GroupM] are losing out.”

However, a second media company ad chief said that to the sell side, GroupM’s “position has not changed. They’ve always been one of the big three holding companies, and they continue to be one of the big three for us.”

Heading into this year’s upfront ad haggle, which is just underway, rather than offering the market its upfront pricing power, GroupM has been a leader in identifying and rallying clients around emerging trends, said the ad chief, who listed efforts in diverse media and women’s sports investment as recent examples. These initiatives, plus GroupM’s Ad Innovation Accelerator to standardize emerging ad formats in streaming, are aimed at providing clients exclusive access to or early market adoption of trending media, often emphasizing social initiatives such as equitable marketing spend.

But the media leader did point to moves other agencies have made, such as how Publicis has integrated Epsilon into its offering since buying it five years ago, as examples of where GroupM will need to innovate in order to keep up with its competitors.

“How clients are buying is changing, especially as more dollars move to digital platforms from linear environments where there was a very specific business model in how everything went to market,” said the ad chief. “Having your own DSP to actually manage the business for clients in a way that feels like it’s in-house, but allows [agencies] to be part of that solution process and bring value to that ecosystem—that can really drive opportunity.”

Also read: GroupM predicts 7.8% global ad spending growth in 2024

Pivoting from inertia

The first media company executive said that GroupM has suffered because it hasn’t taken the initiative sooner to push its clients into new media practices.

“A CMO that shifted their business said, ‘They were giving us what we asked for, and we need our agency to give us what we need,’” said the media executive. “Clients are smart enough to see when you’re just trying to put a new face on the same thing. You either have to do a new thing, or you’re going to suffer the consequences that they’ve gone through.”

Ad Age reached out to seven of GroupM’s largest U.S. clients, each of whom did not respond or declined to comment on its relationship with GroupM.

Juhl similarly acknowledged that one reason for GroupM’s recent business losses is that the company had spent too long maintaining operations based on longstanding clients rather than pushing its clientele to innovate.

“People don’t really want to [change]—if it’s not broken, don’t fix it kind of thing,” Juhl said. “Some of the reviews that we had that weren’t successful, that was the mindset and we should have forced our way in to do more evolution, to tell [clients] that we really need to think about doing things differently. All it takes is a new CMO to come in and they go, ‘Why were we doing it that way for so long? That’s way too labor intensive, you should really have done more automation, use technology to a greater advantage. Where are we with AI?’—all these things that people want to do. You can’t just say, ‘Oh, the old person liked it that way, so that’s what we did.’ Our clients count on us to lead them and to help them grow and find new opportunities.”

GroupM has long held the model of utilizing conflict shops so the holding company could service major competing marketers in the same category. For example, NBCUniversal, including Universal Pictures, is a client of EssenceMediacom while Paramount Pictures is a client of Wavemaker in the U.S.

Marketers are no longer as concerned with their agency working with rivals, according to several consultants and media buyers who work closely with brands, and are more interested in one integrated offering, where a client could get one team with services that pull from various different units. To be sure, consulting giants such as Deloitte and Accenture have always serviced various competing accounts.

“Clients seem to be less concerned about competitive separation these days,” one former Mindshare executive said. “There are so many shenanigans at holding companies. ‘Just put this one [account] in this office or this one on this floor’ [to seemingly separate them]. At some point, if I’m a client, I’m like, ‘Really? The person on floor four doesn’t talk to the person on floor five?’”

The bigger problem for GroupM is integrating all of its various services into one offering, the former Mindshare executive said. “If you’re a client and you’re working with GroupM, you’re going from this person for this and this company for that and then they’re trying to nickel and dime you for all that.”

Juhl has been working to simplify and consolidate the media agency group through moves such as last year’s merger of Essence and Mediacom and centralizing all of the company’s individual agencies’ new business and marketing efforts under GroupM. 

Juhl said when he began at GroupM the agencies were extremely siloed, “not unlike how WPP can be sometimes.” At the time, leaders from all of the GroupM agencies hadn’t met, and Juhl said he pulled them all together to outline restructuring over the next five years (culminating now) to simplify the business around the central brand. Not everyone was ready for that, he said.

There’s also been a leadership shakeup in the U.S. GroupM North America appointed Sharb Farjami as its new CEO in January, following the departure of Kirk McDonald, who had held that role since 2020. Farjami appointed his first executives in February: JiYoung Kim was named chief operating officer and Lynne Reilly became the agency’s first chief growth officer.

In February, Jill Kelly left her post as U.S. CEO of EssenceMediacom, with sources close to the matter citing recent account losses like Uber, Walgreens and Signet Jewelers as a reason for the decision. Kelly was originally appointed to the role in 2022 to oversee the merger of GroupM’s Essence and Mediacom, and was said to be remaining at GroupM in an unnamed role, but Kelly recently departed GroupM, according to a source familiar with the matter. GroupM declined to comment on Kelly’s status at the company.

“It’s an incredibly complex industry … There’s value in agility,” Farjami said. “We have to set ourselves up simply not just in service of the industry, but also in service of our clients. If I’m a client, I want to understand the structure very simply, I want to understand who I’m dealing with. I want to understand who’s accountable for what, who does what, and I want to know that those things work. And I don’t want to have to work hard to understand the organization I’m working with.”

Still, GroupM N.A.’s new class of leaders will have to work fast.

“The clock is ticking,” said a CEO of a rival holding company media agency who used to work for GroupM. “Revenues are challenged, competitors are attacking. The question is can they weather the storm? I’m not sure the Street or clients have full confidence in the leaders they have. There’s nothing like big wins to restore leadership, but big wins are harder to come by without being meaningfully differentiated.”

GroupM versus the competition

GroupM is said to be “light years” behind some of its rivals, namely Publicis Groupe, which has excelled at consolidating and creating one unified offering for its clients since 2015, according to multiple former executives and consultants.

The power of creating a single P&L is that everyone in the group profits from a single piece of business, according to consultants and media buyers. Operating with multiple P&Ls breeds unnecessary competitiveness between individual agencies, and is considered to be something that’s holding GroupM back.

GroupM only shifted to a country-level P&L—in which it is allocating budgets and resources solely on a country-by-country basis—last November. Publicis implemented its country-level model in 2018. 

“GroupM is very old school in a lot of ways,” said a former EssenceMediacom executive, noting that “at the heart of it, they just started too late.”

The executive said that the industry “made fun of” Publicis’ Marcel tool at first “but [the company was] experimenting with cross-agency platforms before anyone else was,” and now it’s winning. Launched in 2017, Marcel is an AI tool that automates Publicis’ internal operations.

More: Publicis riffs on AI BS, while also touting the tech’s potential

Publicis also got ahead of the pack by acquiring digital marketing hub Sapient in 2014 and email marketing and data company Epsilon in 2019; it quickly integrated them into the holding company. WPP formed Choreograph, its data company, in 2021, and only just integrated it across GroupM with this new restructuring.

To be sure, pain in the current media marketplace isn’t exclusive to GroupM—Publicis recently laid off two top Starcom U.S. executives, with sources attributing the shakeup to recent client losses.

Publicis has continued to make considerable strides in implementing the right technology to bolster its business—in January it announced a $326 million investment in AI and a proprietary tool that aims to completely innovate its disciplines in creative, media, software, operations and insights.

WPP CEO Mark Read has said the holding company plans to invest $318 million annually in AI technology and opened a technology hub in April that identifies use cases of AI for its clients. Publicis first started experimenting with AI through the introduction of Marcel. 

However, “getting [GroupM’s] data strategy coalesced a little bit later than our competitors also served as an advantage for us,” said JiYoung Kim, chief operating officer GroupM North America and interim North American CEO of EssenceMediacom. Kim said GroupM has been able to test-and-learn in the development of its data technology to “avoid some of the pitfalls” of GroupM’s competitors who were first-to-market and are having to continually adjust as regulations and practices around data sharing evolve.

Overly complex

GroupM, admittedly so, is a complex company, and even some of its own executives find it confusing. One former GroupM executive, who recently left, said the complexity has become an inside joke among employees. 

GroupM has always struggled with figuring out whether it’s an operating or holding company, a second former GroupM executive said. “They have four agencies that all want to do their own thing and set up their own positioning. That’s not what the market needs.”

Farjami said he’s been focused on working to address that complexity, and GroupM aims to complete the majority of its restructuring, or simplification efforts, by the first half of this year.

Part of GroupM’s restructuring has been focused on centralizing certain disciplines across agencies. Farjami said the centralization of finance, marketing, new business efforts and data and analytics is now complete. Investment and activation are still undergoing changes; among them is the continued consolidation effort of all digital activation solutions—including GroupM Services, Xaxis, Finecast and AI technology Copilot—under the performance marketing Nexus brand, he said.

The restructuring has included layoffs, according to several people who spoke to Ad Age. GroupM declined to specify the number of roles eliminated due to its reorganization.

GroupM’s global headcount as of 2023 across its main agencies was as follows: EssenceMediacom had 10,000 employees, the same number of employees it had in 2022; Mindshare had 8,000 employees compared to 10,000 in 2022; Wavemaker had 6,000 employees compared to 7,000 in 2022; and mSix&Partners had 600 employees, up from 500 in 2022, according to Ad Age Datacenter calculations based on average of WPP disclosures. GroupM had 41,000 global employees in 2023, with 16,400 employed in other operations outside those main agencies, per WPP’s annual report.

These layoffs have been taking place over several months, according to several former GroupM executives, who say it’s causing morale to be low and employees to feel on edge. 

“A lot of people feel that the communication and the way they go about change management hasn’t been the smoothest,” the former GroupM executive said, adding that the EssenceMediacom merger and the effort to sunset Xaxis as part of the Nexus reorganization last year, in particular, “caused a lot of friction—and a lot of politics.”

And internal politics are clouding some of the restructuring efforts, the former GroupM executive added. “If you talk to regions, [there is a] type of cultural divide and feeling that one company [is being prioritized] over the other, without enough understanding or taking into account the other side of the business,” this person said.

A GroupM spokesperson told Ad Age that 2023 saw the lowest turnover rate for the media network group in its history, including during the height of the COVID-19 pandemic. The spokesperson also said total headcount has grown by a small percentage each year for the past four years.

Farjami said in GroupM’s efforts to simplify, the company has had to eliminate certain redundant roles across various departments.

“When you take a single approach on something you are going to find efficiencies. When you have efficiencies, there are opportunities for cost saving. Sometimes they are cost savings in terms of the amount of resources and individuals involved in a single task,” Farjami said. “I don’t have a single number of how many individuals it’s meant. Would I describe it as waves? Probably not.”

He added that, like the other simplification efforts, “the majority of efficiencies in staffing will be done by the front half of this year.”

The leaders in charge

If anyone can help reposition GroupM in the marketplace, though, it’s Juhl, according to the former executives.

The sources said Juhl, who became global CEO in 2019, probably would have done it sooner if he got the green light, and that many executives over the years had tried to convince GroupM it was falling behind its peers, but were turned down.

The former Mindshare executive said they were part of a North American team a few years ago that tried convincing GroupM leadership to “change the company to be less about ‘he or she had the most dollar wins’ but ‘he or she had the most data wins.’ We felt like the days of TV buying and having a lot of dollars coming [in through big upfront deals] were coming to an end. Data was driving outcomes for clients. We needed better data offerings and products and services. GroupM leadership in North America and global didn’t want to hear it because that’s not how they were making their money.”

Juhl himself said this transformation was something he wanted to do five years ago when he was first appointed to the role.

“I said we’re going to look more like a software company in the future,” Juhl said. “We’re going to have to think about single ways of working, single ways of deploying and single technology stacks underneath us. And I think we’ve taken a very measured approach to delivering that and [we were] very cautious—our competitors caught up pretty quick. I think we announced it before anybody else did, but they executed it pretty rigorously, pretty quickly.”

Juhl appointed Farjami as GroupM North America CEO in January after a successful tenure as CEO of Wavemaker U.S. Farjami, who went back and forth between publishing and advertising in the earlier part of his career, said he really didn’t know much about how a media agency worked before he landed as the chief exchange officer for Mindshare Australia in 2011. There, he worked his way up to chief operating officer, before leaving in 2014 to go to News Corp Australia. He returned to GroupM in 2021 as the chief operating officer of Wavemaker U.S.

Farjami said GroupM has evolved greatly in its quest for simplicity and centralizing its power compared to his time working for Mindshare. “I think synergy is a culmination of those changes in a positive way. Not that it wasn’t positive the first time around, it was great,” he said. “It’s just I’m excited about the opportunity that’s presented by the simplicity and the agility of the model that we’re trying to create.”

Since taking the reins, Farjami has elevated Lynne Reilly, who joined Wavemaker in January 2023, to lead new business for the North America region.

Reilly said that neither Wavemaker nor GroupM had an established “new business infrastructure or culture” when she joined and that in “a place of this size, there was an over-reliance on new business just happening itself.”

She has spent the months since rallying a centralized team to guide GroupM’s new business strategy across its agencies, a structure that mirrors the simplifications happening across its other services. Reilly described GroupM’s former way of approaching new business, which was conducted by each agency individually, as disorganized and causing overburden on teams because of the lack of communication across the network about who was pitching what and how many pitches were active at once.

Centralizing the new business strategy around one person and team allows Reilly to “be in charge of yay or nay and helping gatekeep with the executive committee what we should and shouldn’t be doing that makes sense for us,” she said, adding that she’s turned down more new business pitches this year so far than she has participated in. While Reilly said that’s been a difficult shift for some, it’s allowed her to better select the accounts to pursue based on each of the investment agencies’ strengths, their available bandwidth and the gaps in their client rosters that should be filled.

More: Agencies as media sellers—a controversial growth engine

“Our greatest strength is that there’s nothing I can’t find here that has not been done—we have such great experience and talent,” said Reilly. However, the weakness that GroupM’s leadership team is endeavoring to solve is that “because of the size, you have to dig to find that greatness, and I’m here to make sure that all those layers are peeled away.”

GroupM is slowly clawing its way back and recently won the media accounts for Harley-Davidson and Nestlé Health Science (which houses all of the food giant’s health brands including, most notably, Nature’s Bounty), according to one person close to GroupM.

Harley-Davidson and Nestlé Health Science did not return requests for comment.

Harley-Davidson spent $20 million on measured media in the U.S. in 2023, up from $18 million in 2022, while Nestlé Health Science spent $116 million on measured media in the U.S. in 2023, down from $150 million in 2022, according to Ad Age Datacenter, citing estimates from Vivvix, including paid social data from Pathmatics.

Reilly said what ultimately will propel GroupM ahead of its competitors in new business is its talent, which she claimed is something marketers are increasingly prioritizing when evaluating media agency relationships.

“More and more there is a focus from consultants, even procurement and client-led pitches, on talent,” Reilly said. “There’s such a bigger focus on who’s in the room, not the offering, not the pricing … We just had a meeting where, for the first 45 minutes, we just talked about how we hire people and how we keep them interested.”

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At a global level, GroupM recently put Wavemaker Global CEO Toby Jenner in charge of its go-to-market and growth strategy. He is also the first global president of GroupM clients, in addition to retaining his Wavemaker role, although his remit will exclude certain agencies, such as Mindshare and EssenceMediacom, which will continue to be responsible for their clients.

“I’m going to be very honest and say we are not as formidable in the U.S. as I would like to be,” said Kim. “We should be doing much better. But we are an incredible global network. When you look at the composition of our largest clients, they tend to be the most global brands in the world—we’re talking about brands like Coca-Cola … now, we’re entering a phase where we have to balance that, and we have to be more thoughtful about the way we service our global clients versus our U.S.-only clients.”

The future of media agencies

Of course, restructurings and reorgs are often messy.

A source with knowledge of Publicis’ restructuring over the past decade said that its transition, where you might be on a team for a project with people across agencies, was difficult and it took time to make it work. Publicis’ initial restructuring, which began in 2015 to become what’s now its Power of One model, saw the holding company work through tensions of its own.

The person said the first year of it was really confusing and hard to understand internally. “But you had to go through those growing pains for people to realize that that’s what clients want. They want the flexibility to say, ‘This isn’t working here, I can pivot over here, but I don’t have to leave the holding company to do that.’”

ID Comms’ Denford said GroupM could address some of its complexities and become more efficient by dividing its business into different lines, separating “higher-value consulting work” from data and tech, for example.

He said most media agencies are undergoing these growing pains.

“In five years companies like GroupM may not resemble agencies as we now know them, they will be giant trading or data companies run largely off-shore leveraging AI for buying and targeting optimization purposes,” Denford said. “Account management and planning may then sit better under other agency brands, such as the WPP creative agencies.”