Madison Avenue Faces New Curve After WPP Cuts Ties With Martin Sorrell

Variety | 4/16/2018 | Brian Steinberg
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Martin Sorrell in 1985 invested in a small British manufacturer of wire shopping baskets, and began a process that would result in the construction of the giant marketing-services holding company WPP. Now that the company has cut ties with its founder, many wonder if the era of empire-building on Madison Avenue has come to an end.

The advertising industry is largely carved up among six or seven major holding companies: WPP; Interpublic Group and Omnicom Group of the U.S.; Publicis Groupe and Havas of France; and Dentsu and Hakuhodo in Japan. The companies were created by buying sprees set in motion in the 1980s and 1990s that put giant ad agencies and a litany of smaller, entrepreneur-driven shops under the holding companies’ aegis. In a different timeline, ad agencies like BBDO, Deutsch or Young & Rubicam might still operate under their own power, rather than being lumped into a hodgepodge of firms assimilated under one corporate banner to serve up everything from clever jingles to in-store promotions to everyone from Apple to Zyrtec. And the constant spate of acquisitions masked any issues the bigger companies might have in managing dozens and dozens of small-to-large shops.

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Sorrell’s exile from WPP, set in motion this weekend, calls that model into question. Sorrell, who spent a career building WPP with daring acquisitions of J. Walter Thompson, Young & Rubicam and Ogilvy and Mather and a slew of investments in everything from Fullscreen to the Weinstein Company to Vice Media, retired from WPP this weekend after its board of directors had begun a probe into allegations of misconduct by its founder and CEO. “The previously announced investigation into an allegation of misconduct against Sir Martin has concluded,” the company said in a statement. “The allegation did not involve amounts that are...
(Excerpt) Read more at: Variety
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