Breaking: Enfatico Folds Into Y&R, WPP Is Feeling The Burn

By SuperSpy Comment


Our Google alert has alerted us to the news that WPP’s Enfatico will be merged with Y&R. From the WSJ, who broke the story:

“The move is a retreat from one of the most ambitious projects on Madison Avenue – an effort to eliminate turf wars by housing many different marketing disciplines within a single firm. The structure was one of WPP’s key selling points when it landed Dell’s advertising and marketing business in December 2007.”

A statement from the agency read that this was “a strategic decision” and that “Enfatico remains a standalone brand alongside Y&R’s other companies including Y&R Advertising, Wunderman, Burson-Marsteller, Landor and others.”

You knew this was coming. From the beginning, Enfatico was the subject of the ad industry’s jeers. One client. Too many bodies. A huge lease on a downtown building. Mediocre creative, high level staff changes on the client side and everyone has heard the rumors that Dell is shopping around. A bold idea has gone bad. CEO Sir Martin Sorrell was going to have to do something with the increasingly heavy weight of Enfatico. WPP isn’t healthy enough (and really who is?) to redistribute the shop’s employees, which number around 800 people worldwide. Where are they going to go? As Sorrell recently wrote in The Financial Times: “Some have said that, intellectually, recessions are exciting or fun. That is callous nonsense. Telling someone who has lost their job or business that their troubles are merely part of a cycle will provide little comfort.” Oh how true. Maybe Marty-Mar should write everyone at Enfatico a little note, hmmm?

Meanwhile, WPP as a whole is struggling. JWT recently closed its Chicago shop. In the UK, Publicis beat out a team from WPP for Visa’s 2012 Olympic business. Y&R Chicago just lost the Miller Genuine Draft account to the New York office of Publicis Groupe’s Saatchi & Saatchi. And WPP’s Mindshare is defending the $250M Wrigley account any day now.

Tough times for WPP. Still, the company is pushing deeper into the Pakistani market. Does Sorrell have President Asif Ali Zardari in his pocket? Zardari is known as “Mr. 10% Percent” considering his alleged skill in the fields of bribery and money laundering. WPP isn’t alone though. Plenty of death star agencies are hoping that growing businesses in “developing countries” will defray some of the shock and awe happening in the US, as well as Europe. In WPP’s case, the balance sheet is a little shaky. Sure, WPP posted $13.6 billion in revenue for 2008, but that includes two months of revenue from TNS and it’s against a whole lot of debt.

In early March, the Sorrell told investors that: “I’d just like to say in the 25, 30 years that I’ve been in the business, I have never seen anything quite like this.” His long list of worries is surely growing and growing and growing.

More: Enfatico Fails On The Adamo Campaign