Time for a reboot at Group M, again?

The business has struggled to articulate its purpose in a changed market or even why it needs to exist as a brand.

Here we go again. "Group M needs a reboot," I wrote here in 2016, when Kelly Clark took over as global chief executive of the world’s biggest advertising buyer after some hefty account losses.

Three years later, a proper reboot is still required, market share has gone into reverse in North America, and there’s a new incoming global CEO, Christian Juhl.

Clark, a decent and principled man, found it hard to change Group M. WPP set up the division in 2003 to aggregate the buying scale of its media agencies and it became a fearsome operator. Now Group M faces a radically different landscape, where the smart use of technology and data matters as much as trading brawn.

Group M still boasts stellar clients and employs 35,000 people, with 8,000 at the centre and the remainder at the agencies, chiefly MediaCom, Mindshare, Wavemaker and Essence.

Yet, Group M has struggled to articulate its purpose in this changed market or even why it needs to exist as a brand.

There have been so many structural shifts: the rise of the Google-Facebook duopoly, the transparency debate, clients in-housing, new consulting and IT rivals, and weak agencies, which prompted the MEC-Maxus merger to create Wavemaker.

Clark also faced internal politics – he and Stephen Allan, the global CEO of MediaCom, didn’t get on – and WPP’s wider problems, which meant Group M was unable to make acquisitions.

Many of the global buying groups face similar challenges, but Group M matters because it is the biggest – with 30% share among the big six players, according to COMvergence – and it has been WPP’s profit engine.

Juhl comes from Essence, Google’s digital agency, and he has signalled a more open approach in interviews since his promotion – in contrast to Clark, who eschewed the limelight. Mark Read, the WPP chief executive, has tasked Juhl with reshaping Group M so it is fit "for the next five to 10 years", and Essence, with its tech-savvy, experimental culture, is a pointer.

Some of Juhl’s priorities are clear: improve Group M’s technology offer and make it smarter and more consistent as automation and artificial intelligence grow in importance. Sort out North America, where even insiders admit Group M is hard to navigate, with overlapping products. Recruit digital talent, invest in training and coding skills, and adopt new, more agile and collaborative ways of working with clients.

Juhl insists more complexity in media means there is a greater need for agencies and is "not worried about our growth at all". But many clients are reducing agencies’ scope and fees. One marketer warns: "Agencies will need to add a lot of value to counter the cost-saving from in-housing." Expect Group M to look at hubbing and offshoring in key global locations.

San Francisco-based Juhl faces a huge step up from Essence, which has only 1,800 staff, but he is willing to lead and has a sense of urgency. He talks about pushing "legacy" media owners to make their inventory addressable and making everyone think much harder about the "ethical" use of AI and data.

There have been rumours that Group M might tackle the vexed issue of transparency, but informed sources say there is no plan to stop offering a so-called "undisclosed" model. They maintain some clients are happy to get cheap prices, without knowing how much the agency paid for inventory upfront, and it can suit media owners to bank revenue early. Even so, moving away from arbitrage to a professional services model should be an ambition for Juhl, an ex-WPPer says.

Arguably, Juhl’s biggest challenge is winning over the long-serving network chiefs as he balances the merits of "the centre" versus the agency brands. Most of Group M’s rivals are centralising, most notably Publicis Media, but the fear is that agencies lose their distinctiveness.

Read has talked about how WPP needs to act more like one company, while retaining strong agency brands. He also points out scale matters when it comes to navigating technology and data because of "the industrialisation of media".

So, there’s no doubt that some of Group M’s centralised functions such as finance, technology and data processing are important to WPP and its agencies.

But does Group M need to exist? At Essence, the answer would be test and learn.

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