WPP plc

WPP plc
Public limited company
Traded as LSE: WPP
NASDAQ: WPPGY
Industry Advertising
Public relations
Founded 1971
(Wire and Plastic Products plc)
1985
(Sorrell acquisition and entry into advertising)
Founder Martin Sorrell (as an advertising company)
Headquarters London, England (Head office)
Saint Helier, Jersey (Registered office)
Dublin, Republic of Ireland (Executive office)
Area served
 Worldwide
Key people
 Philip Lader (Chairman)
Martin Sorrell (CEO)
Services Branding & identity
Consumer insights
Design
Digital
Marketing
Market research
Media planning and buying
Public relations
Relationship marketing
Revenue £12,235.2 million (2015)[1]
£1,632.0 million (2015)[1]
£1,245.1 million (2015)[1]
Number of employees
 121,397 (2015)[2]
Subsidiaries Grey Global Group
Ogilvy & Mather
Young & Rubicam
JWT
Hill & Knowlton
Burson-Marsteller
GroupM
Cohn & Wolfe
The Brand Union
Website WPP.com

WPP plc, (Wire and Plastic Products) is a British multinational advertising and public relations company with its main management office in London, England, and its executive office in Dublin, Ireland.[3] It is the world's largest advertising company by revenues, and employs around 190,000 people in 3,000 offices across 112 countries.[2][4] It owns a number of advertising, public relations and market research networks, including IMRB Millward Brown, Grey, Burson-Marsteller, Hill & Knowlton, JWT, Ogilvy & Mather, TNS, Young & Rubicam and Cohn & Wolfe.[2]

WPP has a primary listing on the London Stock Exchange and is a constituent of the FTSE 100 Index. It has a secondary listing on NASDAQ.

History

Wire and Plastic Products plc was founded in 1971 as a manufacturer of wire shopping baskets. In 1985 Martin Sorrell, searching for a listed company through which to build a worldwide marketing services company, bought a controlling stake of just under 30% at a cost of $676,000.[5][6] Sorrell had been the financial director for the advertising agency Saatchi & Saatchi from 1977 to 1985, managing its takeovers of companies in the US and the UK. The holding company was renamed WPP Group and in 1987 Sorrell became its chief executive.[5]

During 1986 WPP became the parent company of Picquotware, a manufacturer of teapots and jugs, based in Northampton. In November 1987 a fire destroyed the Northampton factory and production was restarted at Burntwood in Staffordshire. On 25 November 2004 WPP closed the Burntwood factory and stopped manufacturing Picquotware: all assets were sold on 14 December 2004.[7]

In 1987 the company acquired J. Walter Thompson (including JWT, Hill & Knowlton and MRB Group) for $566m.[5] The company listed on NASDAQ in 1988.[5] In 1989 it acquired Ogilvy Group for $864m[5] and in 1998 formed an alliance with Asatsu-DK Inc. of Japan.[5]

In May 2000, WPP agreed to acquire the United States-based advertising company Young & Rubicam for $5.7 billion, in what was at the time the largest ever takeover in the advertising sector.[8] The takeover made WPP the largest advertising company in the world measured by billings and revenue, overtaking Omnicom Group and Interpublic.[8] In 2007, WPP Digital was created to develop the Group's digital capabilities. In October 2008, WPP acquired market research firm Taylor Nelson Sofres for £1.6 billion.[9][10]

During 2009 WPP reduced its workforce by around 14,000 employees, or 12.3% of its then total staff numbers, in response to the onset of the 2008–2012 global recession.[11][12]

In June 2012, WPP agreed to acquire the digital advertising agency AKQA for US$540 million.[13][14]

In March 2014 WPP agreed to acquire a minority stake in Swedish broadcaster FlowNetwork. [15]

Operations

WPP's advertising agency company holdings include the Grey Group, Ogilvy & Mather, Young & Rubicam Brands, and JWT (formerly known as J. Walter Thompson Co.).

WPP's government lobbying and public relations company holdings including Hill+Knowlton Strategies, Ogilvy Public Relations Worldwide, Burson-Marsteller, and Cohn & Wolfe (the last two being part of Young & Rubicam Brands).

WPP's media investment management company holdings are operated by GroupM and include Mindshare, MEC (formerly Mediaedge:cia), Maxus, MediaCom (originally part of Grey Group) and Essence.

WPP's research insight and consulting companies, forming a separate umbrella group known as Kantar, comprise BMRB, Added Value, Kantar Video, Indian Market Research Bureau, Millward Brown, Management Ventures Inc., Research International (which no longer exist as an entity after the merger with TNS) and TNS.

Delfinware Domestic Wireware, which was established in 1969 and manufactures kitchen and bathroom wire racks, is also a subsidiary of WPP Group.[16]

Governance

WPP is governed by a board of directors, whose current members include Colin Day, Esther Dyson, Orit Gadiesh, Ruigan Li, Philip Lader, Stanley Morten, Kōichirō Naganuma, Lubna Olayan, John Quelch, Mark Read, Paul Richardson, Jeffrey Rosen, Timothy Shriver, Martin Sorrell, Paul Spencer and Solomon Trujillo.

Controversies

2012 shareholder revolt on executive remuneration

With a number of shareholder revolts over executive pay having already happened at other public companies' AGMs earlier in the year, the media coverage of Martin Sorrell's intended £12.93m pay packet drew increasing public attention.[17][18] The result was an overwhelming 59.52% shareholder vote to reject the resolution.[18][19]

Taxation

It has been reported that WPP goes to great lengths to lower its own corporate tax bill. The Guardian reported that between 2003 and 2009 the company paid £27m in UK corporation tax, compared to what the newspaper "might expect" based on reports of the firm making 15% of its profit in the UK, of around £126m.[20]

Television Audience Measurement

In 2012 the Indian broadcasting NDTV filed a lawsuit against Television Audience Measurement (TAM), a joint venture of the former competitors Nielsen and Kantar Media Research which for years has provided the only TV audience measurement system in India. WPP Plc was listed among the defendants as the holding group of Kantar and IMRB. NDTV's lawsuit, filed in the New York State Supreme Court under the Foreign Corrupt Practices Act and seeking $1.4 billion for negligence and hundreds of millions for interference and breach of fiduciary duty, cited a public conversation between Vikram Chandra, CEO of NDTV, and Martin Sorrell, CEO of WPP, in which Chandra had described ways in which the system was prone to tampering and bribery; his request for a halt to the publication of the allegedly compromised data was unsuccessful.[21][22][23][24][25]

WPP responded that the lawsuit had not been served on WPP or any of its operating companies, the New York court had no jurisdiction in the case and that it would file for dismissal, seeking legal costs, and that it was considering a lawsuit against NDTV for defamation, a threat which NDTV in turn called "baseless".[26] The motion to dismiss was filed a week later, with the statement in its memorandum of law that "This case is nothing more than a desperate attempt by the plaintiff, a television station in New Delhi, India, to drum up media coverage in India to divert attention from the real reasons its programmes have had low audience ratings and its financial performance has been abysmal for five years ... New Delhi TV has crossed the globe and come to New York State Supreme Court to complain about an Indian company, TAM, and how it measures the ratings of television programmes in India."[27] The motion to dismiss is to be decided by the court on 14 December 2012.[28] Nielsen later filed its own petition for dismissal, writing that "NDTV attempts to transform a potential contract claim against TAM into tort and oral contract claims against the Nielsen defendants. Nothing in the law supports such a magic trick. Simply put, NDTV fails to allege a legal duty independent of a contract and fails to allege all of the elements needed to support each cause of action."[29]

References

  1. 1 2 3 "Preliminary Results 2015" (PDF). WPP plc. Retrieved 27 March 2016.
  2. 1 2 3 "WPP 2014 Annual Report" (PDF). WPP plc. Retrieved 9 August 2015.
  3. ↑ Burke, Risn (30 September 2008). "WPP moves HQ to Ireland in tax-cut bid". The Irish Independent. Retrieved 1 September 2010.
  4. ↑ "WPP's Sorrell says Europe a sideshow ahead of U.S". Reuters. 28 November 2011.
  5. 1 2 3 4 5 6 "Group history". WPP plc. Retrieved 30 August 2010.
  6. ↑ "Sir Martin Sorrell: advertising man who made the industry's biggest pitch". The Guardian. 4 July 2010. Retrieved 12 July 2012.
  7. ↑ Piquotware History
  8. 1 2 "Young & Rubicam Agrees to $5.7 Billion Takeover by WPP". The New York Times. 9 May 2000. Retrieved 12 July 2012.
  9. ↑ "Stockopedia. Stock Screens, Stock Ranks, Stock Tips & Tricks". Stockopedia. Retrieved 21 March 2015.
  10. ↑ "WPP Bid Garners 82% TNS Shareholder Approval". Ad Week. 8 October 2008. Retrieved 12 July 2012.
  11. ↑ "WPP stable after 'brutal' 2009". The Guardian. 5 March 2010. Retrieved 12 July 2012.
  12. ↑ "WPP profits fall despite job cuts". The Telegraph. 5 March 2010. Retrieved 12 July 2012.
  13. ↑ "WPP Acquires AKQA to Beef Up Digital Marketing". The New York Times. 20 June 2012. Retrieved 12 July 2012.
  14. ↑ "WPP buys majority stake in AKQA". The Guardian. 20 June 2012. Retrieved 12 July 2012.
  15. ↑ "WPP buys stake in Swedish broadcast content provider FlowNetwork".
  16. ↑ The Bubblegate Company Ltd. "About us". delfinware.co.uk. Retrieved 21 March 2015.
  17. ↑ "Sir Martin Sorrell finds out that it doesn't always pay to advertise". The Guardian. 17 June 2012. Retrieved 12 July 2012.
  18. 1 2 "WPP shareholders vote against £6.8m pay packet for Sir Martin Sorrell". The Guardian. 13 June 2012. Retrieved 12 July 2012.
  19. ↑ "AGM Total Proxy Votes". wpp.com. Retrieved 21 March 2015.
  20. ↑ Tax gap reporting team (4 February 2009). "Seeing double: Avoidance scheme allegedly used by UK ads agency". The Guardian. Retrieved 11 December 2012.
  21. ↑ Shamni Pande and Anusha Subramanian (2 September 2012). "Taming TAM:What is holding India back from improving TV audience measurement?". Business Today.
  22. ↑ Anusha Subramanian (3 August 2012). "NDTV bells the cat, files suit against TAM". Business Today.
  23. ↑ "NDTV sues Nielsen for viewership data manipulation". Business Today. Press Trust of India. 2 August 2012.
  24. ↑ "NDTV-WPP war of words continues over ratings issue". Business Standard. 28 August 2012.
  25. ↑ "Advertising firm WPP may sue NDTV for defamation". The Economic Times. 23 August 2012.
  26. ↑ "WPP hints defamation case against NDTV". The Indian Express. 24 August 2012.
  27. ↑ "NDTV suit a desperate attempt". The Hindu. 30 August 2012.
  28. ↑ "NDTV-TAM case: Court to take decision on 14 Dec". Firstpost Business. 7 September 2012.
  29. ↑ "Nielsen files for dismissal of NDTV lawsuit". Indiantelevision.com. 12 November 2012.

External links

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