Group M needs a reboot. The world’s biggest media buyer manages $100bn annually in adspend, yet it has lost two of its biggest accounts, Volkswagen and AT&T, worth a combined $5bn, and missed out on a third major pitch, Procter & Gamble in North America, since the end of last year.
So it is high time for new leadership.
The appointment of Kelly Clark, 50, as global chief executive, replacing Dominic Proctor, who was ready to step down as president after turning 60, sends a signal about generational change at the WPP buying unit.
The question is whether Clark can deliver structural change and simplify an organisation that insiders say has become unwieldy and bureaucratic.
Group M brought in management consultants earlier this year but that appeared to make little difference. So it may be an advantage that Clark is a well-liked insider who has run Mindshare in the UK and Asia, Maxus globally and Group M in the US. He knows the politics.
Sir Martin Sorrell set up Group M in 2003 to be a holding company for WPP’s media agencies, giving them buying scale and shared resources. As Group M grew, it became media’s smartest and most feared buyer under Irwin Gotlieb, the veteran chairman, and Proctor. But amid rapid technological change, there is a feeling that Group M is no longer agile or fast-moving enough. To describe it as male, pale and stale is unfair, but not wholly inaccurate.
Younger agency leaders want more leadership from Group M. Some have called for a merger with Kantar, WPP’s data unit, but that has been resisted. While Sorrell has talked persuasively about "horizontality" (getting disciplines working together), it is Omnicom that has blazed a trail with Hearts & Science, a data-led agency that has won P&G and AT&T, and an integrated, creative and media offering for McDonald’s.
Agencies have other frustrations as they seek to differentiate themselves – like Group M’s demand to sign off investments above a certain size, which can be difficult if it doesn’t suit fellow agencies.
Tension between Group M and its agencies is also an issue externally amid questions about transparency and rebates. Some advertisers have a contract with an individual WPP agency, rather than Group M, even though it is the latter that wields the trading power.
Arguably, Group M has not helped itself by avoiding the limelight, which meant it looked secretive and struggled to tell its story until recently.
Clark’s allies say he can be tough and predict big changes at the agencies. The proof will be if the market leader starts behaving like a leader again.