Inside Recent Changes at WPP's GroupM: What the EssenceMediacom Merger Means

Christian Juhl outlined a five-year plan when he became GroupM’s CEO in 2019, and consolidation was part of it. Last week’s Essence and MediaCom merger announcement and the formation of GroupM Nexus are part of GroupM’s broader initiative to automate its systems and standardize workflow. WPP has not been a stranger to consolidation—in recent years it brought J. Walter Thompson with Wunderman together to form Wunderman Thompson; VML and Y&R came together to form VMLY&R; Grey Group and AKQA combined to become AKQA Group. But GroupM agencies have largely been untouched since 2017, when MEC and Maxus were mashed together to create Wavemaker. Juhl told Adweek, “when we looked at our portfolio and what each one of our agencies needed, it became pretty evident that that [consolidation] was a smart move for us to go ahead and do now.” Expanding the group’s shining jewel The merger brings the best of two agencies together, and it expands both companies’ expertise in areas they were previously weaker in. MediaCom, a large legacy agency comparable to Omnicom’s OMD or Publicis’ Zenith, made its name with a more traditional offering and tremendous clout. Essence, which houses GroupM’s deep digital expertise, has the broad digital chops MediaCom lacks on its own. According to Greg Paull, co-founder and principal at R3, Essence is GroupM’s shining jewel and combining it with MediaCom will help it scale. Housing those areas of expertise under one roof makes sense, according to Tom Denford, CEO of ID Comms, because today’s advertisers demand agencies provide an integrated offering. Clients are looking for brand performance, long- and short-term options, traditional, digital, the best talent, effectiveness and efficiency, he said. Like Denford, Jay Pattisall, principal analyst at Forrester Research, is not surprised by the news because Essence and MediaCom already frequently go to market together. “This merger just codifies a relationship that's already in practice,” he told Adweek. The network’s best talent Mergers are also a way to combine the best talent from two separate companies, something that’s especially important today as the industry struggles to fill seats. More holding company advertising contracts, according to Denford, include language that states clients have access to the best talent from across the network. “It doesn't necessarily make sense to have these four silos between the brands,” he said. And merging saves money because agencies are management heavy, according to Denford. It allows them to remove duplication across the network and reinvest in new talent, he noted, implying internal leadership at the agencies could be hit with organizational changes soon. “Where MediaCom is a bit patchy on talent will be slightly different to where maybe Essence is slightly patchy on talent,” he said. Power, behind the scenes Clients’ increased expectations have agencies wondering how to offer more, and opting for consolidation. But not every agency has exactly the same intentions. GroupM is different from models at other groups, like Publicis’ Power of One model. “It's a similar principle in the sense that you can access the best talent from across the group,” said Denford. But according to the consultant, GroupM CEO Christian Juhl has said that GroupM itself is not going to be “in the shop window,” but rather “a much more powerful, consolidated kind of back-end function covering technology tools and data.” The Publicis Media brand, by contrast, has a larger presence in the market. GroupM will fill the role of the "man behind the curtain" that its three media agencies draw support from. This structure was intentional. "I think [Juhl] talks about it as being the platform upon which the agencies can thrive.” Denford said, adding that he advised Juhl to determine GroupM’s role to avoid market confusion. “If GroupM is doing all the buying, clients really just care about GroupM, and it gets in the way. Then who cares about the agencies?” A data foundation This new structure is deeply connected to the company’s tech and data strategy. There will be a lead for Nexus within each agency, and Nexus will treat agencies like customers. “We have this idea of augmented planners that will live within Nexus and that will be a new category of people that will come on top of our traditional media partnerships,” said Juhl. The new org also helps WPP formalize its data approach, as one of the only holding companies that did not invest in a data acquisition like Publicis’ Epsilon acquisition and IPG’s Acxiom acquisition. Clients care about this, according to Paull, and are looking for answers. At the same time, GroupM has yet to create a single platform to house its tech in a single platform like Omnicom’s Omni or Publicis’ Epsilon PeopleCloud, which helps employees across the networks deliver clients a streamlined experience. According to Nicolas Bidon, CEO of GroupM Nexus, streamlining the organization also extends to simplifying the way it goes to market with its technical expertise. A lot of media platforms are "very consistent globally," said Bidon. "They have a single way that they categorize data or way that you can action that data on their platform. Once we figure out the best way to do this, we shouldn't have to do it four times over." According to Denford, clients want a nice, simple story, free of confusion. A proliferation of agency brands has a tendency to baffle clients who are looking to cut through the noise. “Agencies come up with new sub brands all the time,” he said. “And I think, ‘I've never heard of that before.’ And they talk about it like it's some legacy initiative that's been around.”