The new company overtakes WPP Group as the world's largest advertising agency. It's funny. WPP was founded in 1971 as a manufacturer of wire shopping baskets.
Exactly. WPP stands for Wire and Plastic Products.
The company we know today as WPP is the baby of Martin Sorrell.
In 1985 Sorrell, who had been the financial director for the advertising agency Saatchi & Saatchi, was searching for a listed company through which to build a worldwide marketing services company, and bought a controlling stake of WPP. The holding company was renamed WPP Group and in 1987 Sorrell became its chief executive.
So basically a financial guy just wanted to create a big huge advertising agency.
WPP acquired J. Walter Thompson in 1987. It went public in 1988. It bought Ogilvy & Mather in 1989 (I was furious about this at the time; Ogilvy & Mather was sacred to me). It formed an alliance with Japanese agency Asatsu-DK Inc. in 1998.
In May 2000 WPP acquired Young & Rubicam for $5.7 billion, which was at the time the largest advertising takeover ever.
WPP entered the brave new world of cybertising when WPP Digital was created in 2007.
In 2009 WPP reduced its workforce by around 14,000 employees, or 12.3% of its total staff at the time.
See the timing? 1987, 1998, 2000, 2007, 2009 . . . tops and bottoms. Or socionomically, peaks and valleys of social mood.
Which is why I find the current feel good merger of Publicis-Omnicom is an important social mood event. Look at these guys. They look like they're about to start kissing.
They're ad guys who basically want to compete with Google, which is a search engine that also happens to be the world's largest advertising machine.
From wire shopping baskets to internet shopping carts, advertising is entering the world of big data. Except that big data makes it possible for anyone with a broadband connection and a Twitter account to be social media Mad Man. And almost any company can track the same metrics that its billion dollar ad agencies can.
Have a Coke and a smile . . . and leave behind an electronic trail of valuable meta data for anyone from Coca Cola to the NSA to the world's biggest ad agencies to collect, collate, cultivate, and circulate.
Meanwhile the press is as overjoyed as the chummy guys in the photo.
"Instead of posing a threat to Madison Avenue rivals, the merger of equals is a win-win situation, analysts believe."
"Publicis-Omnicom merger: The deal where everybody is the winner."
"A tie-up between Publicis and Omnicom to create the world's biggest advertising agency is spreading waves of optimism."
Waves of optimism nails it.
Deals like this happen when optimism is high. So do market tops. Think AOL Time Warner. Consummated 2000, separated 2009.
Understand the game. Buy low, sell high. It never changes, even though the waves of optimism sometimes seem like they'll never break.
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