WPP, in its relentless pursuit of efficiencies and competitive positioning, has turned its attention to its public relations business, combining communications agencies Hill & Knowlton and BCW to form Burson.
The world’s biggest advertising group is on a transformation program, seeking £600 million in annual cost savings against a 2019 base by 2025.
WPP reported cautious advertisers and disappointing revenue numbers for the September quarter. The company cut full year revenue outlook to growth of between 0.5% to and 1%, down from a previous estimate of 1.5% to 3%.
Public relations, which represents about 10% of WPP’s business, reported revenue less pass-through costs down 0.9% in the quarter.
The company in October last year announced the merger of Wunderman Thompson and VMLY&R to be known as VML starting this month, the industry’s largest creative company with more than 30,000 people in 64 markets.
GroupM is also undergoing changes, what WPP calls accelerated evolution. The company is creating a single technology platform, streamlining operations and back-office functions.
The media arm grew just 1.6% in the September quarter, dragged down by lower spend from technology clients and the impact of account losses in retail and consumer packaged goods.
The latest announcement will birth Burson (named after the late Harold Burson, a pioneer of modern public relations) with more than 6,000 employees in 43 markets.
The company noted synergies between the two groups, to be operational as Burston by July this year.
“Hill & Knowlton and BCW are two high-performing businesses with complementary strengths, shared ambitions and many shared clients,” says Mark Read, CEO of WPP.
“The new agency will be the standard bearer as the most modern, strategic, technology-driven, full-service communications offer in the industry.”
The group will support a client roster that includes more than half of the Fortune 100 across corporate and public affairs, healthcare, technology and brand marketing.
Corey duBrowa, global CEO of BCW, has been named global CEO of Burson.
AnnaMaria DeSalva, global chairman and CEO of Hill & Knowlton, will be the global chairman of Burson.
“Our body of work increasingly demonstrates that strategic communication, elevated by creativity, is a primary force for sustainable value creation,” says AnnaMaria DeSalva.
“By accelerating our transformation through this combination, we will enable the investments in talent and technology that advance communications leadership when it has never mattered more.”
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at adnews@yaffa.com.au
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.