Thursday Wake-Up Call: WPP Says 2017 Was 'Not Pretty.' Plus, Walmart and Dick's Limit Gun Sales

By Published on .

WPP CEO Martin Sorrell at the World Economic Forum in January
WPP CEO Martin Sorrell at the World Economic Forum in January Credit: Simon Dawson/Bloomberg

Welcome to Ad Age's Wake-Up Call, our daily roundup of advertising, marketing, media and digital-related news. You can get an audio version of this briefing on your Alexa device. Search for "Ad Age" under "Skills" in the Alexa app.

What people are talking about today
Here's the blunt assessment of Martin Sorrell, WPP CEO: "2017 for us was not a pretty year." The world's biggest ad group says 2017 like-for-like net sales dropped 0.9 percent, and Reuters describes the results as its "worst performance since the financial crisis." When trading started in London, WPP shares dropped about 13 percent.

WPP says 2018 should be better, but it asked its companies to budget conservatively, and it's forecasting flat revenue and like-for-like net sales (which the company now refers to by the awkward term of "revenue less pass-through costs.")

What happened? In a statement, Sorrell blames pressures on ad spending from zero-based budgeting, activist investors and private equity. He says it's less about competition from consultancies moving into digital agencies' turf, or about Google and Facebook working with clients directly, bypassing agencies. The company has over 130,000 full-time employees not including associates, and it includes GroupM, Ogilvy & Mather, J. Walter Thompson and VML. Earlier this week, it merged two of its PR agencies, Burson-Marsteller and Cohn & Wolfe. WPP says it will continue simplifying its structure: "This escalation will continue as we continue to work with clients on developing the 'agency of the future' and who, at the same time, demand faster, better, cheaper."

Taking a stand
Walmart and Dick's Sporting Goods both say they will stop selling guns to people under 21. Each retailer announced other new limits too. Dick's, acting first, said it would stop selling assault rifles, as Ad Age's Adrianne Pasquarelli reports. A letter from its CEO also noted that the company had legally sold a gun to the 19-year-old suspect in last month's school shooting in Parkland, Florida that killed 17 people. "Thoughts and prayers are not enough," the letter added. Later in the day, Walmart said it would raise the minimum age for buying firearms and ammunition to 21, among other measures, as Ad Age's Jack Neff reports. There seems to be a real shift going on; in a bipartisan meeting at the White House, President Trump seemed open to certain restrictions on gun-buying, to the surprise of many. According to CNN, Trump scolded lawmakers: "Some of you people are petrified of the NRA." It's arguable that some corporations have been afraid of the NRA too. But after the Parkland massacre, brands including Delta, United, MetLife and Hertz distanced themselves from the organization. As we've said before, maybe this time is different.
Also: The Paramount Network is delaying the release of the TV series adaptation of "Heathers" after the Parkland shooting, Variety says. The original movie starring Christian Slater and Winona Ryder included a violent plot by high school students.

Hut hut
Pizza Hut announced its sponsorship of the NFL with this emojified tweet:

Just a day earlier, the National Football League and its previous pizza sponsor, Papa John's announced they were splitting up. It had been a tumultuous time, with the chain's founder sharply criticizing NFL leadership for its handling of the anthem protests. Pizza Hut saw an opening there, maybe because it could use a sales boost. As Ad Age's Jessica Wohl writes, "For Pizza Hut, the deal comes soon after Domino's leaped over it to become the largest U.S. pizza chain based on 2017 sales." One comedian had this suggestion for the Pizza Hut marketing team (though it's maybe a tad, um, obvious?):

Less is more?
As viewers get more accustomed to ad-free viewing on platforms like Netflix, NBC Universal is cutting down on commercials. As Ad Age's Jeanine Poggi writes, "Comcast's NBC Universal division is planning to cut the number of ads running across its networks during original primetime programming by 20 percent and promises to decrease ad time by 10 percent starting this fall." Others, from Turner to the Hallmark Channel, have made similar moves, but there are questions about the economics, as Poggi notes: "Marketers are far from convinced that they should necessarily pay more to be in a program with less commercial clutter."

Just briefly:
'Bro culture':
A woman who worked for Google is suing the company for sexual harassment, discrimination, retaliation, and wrongful termination, and she blames the company's "bro culture," Gizmodo reports.

Project Vs: Vice and Vogue are putting their content collaboration on hold, as Ad Age's Adrianne Paquarelli reports. Vice has been dealing with the "aftermath of a December New York Times report that reported several complaints of sexual assault and harassment as well as a 'boys' club' culture."

Ryan Seacrest: The host has denied sexual misconduct allegations from a former stylist, and E! will keep him on the red carpet to interview stars at the Academy Awards. But one Hollywood publicist told CNN, "I don't think [Seacrest is] going to have a great time on the carpet."

Oops: YouTube moderators "mistakenly removed several videos and some channels from right-wing, pro-gun video producers and outlets," Bloomberg News reports. The service says it wasn't a policy change but a mistake.

Good luck: Music streaming service Spotify is planning to go public, after recording a $1.5 billion loss last year; CBNC notes that it faces "significant challenges to its business model."

Winnie the Pooh crackdown: China's social media censors have gone into overdrive following news that the Communist Party would abolish term limits on the presidency, letting Xi Jinping stay in power. Memes involving Winnie the Pooh (who supposedly bears a likeness to the president) have been censored, and even the letter "n" was briefly targeted, The New York Times reports.

Small world: What is Petite Planet? Ad Age's Jack Neff takes a look at the new Johnson & Johnson brand and how the giant company is trying "to act more like the digitally enabled local players that collectively have become its biggest competitive threat."

Watch and listen: Check out this video of Ad Age's Brian Braiker's interviewing Ericsson CMO Helena Norrman about what's hot (and not) with 5G. And here you can listen to Braiker's podcast interview with Jarrod Dicker, who was the closely watched VP of innovation at The Washington Post until he left to be CEO of a company called

Creativity pick of the day: Some Lacoste polo shirts will see their iconic crocodile logo replaced with a California Condor, a Sumatran Tiger or other threatened animals. It's a Lacoste campaign developed by agency BETC and the International Union for Conservation of Nature. Check it out below, and read more from Ad Age's Alexandra Jardine.

Most Popular