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WPP embarks on new journey without Sorrell at the helm

From Reuters - April 15, 2018

LONDON (Reuters) - WPP (WPP.L), the worlds biggest advertising company, will head into uncharted territory on Monday when it starts life without its founder Martin Sorrell, whose departure has left it rudderless at a time of swirling industry change.

The driving force behind 33 years of dealmaking and relentless expansion, Sorrell stepped down on Saturday after the board investigated an allegation of misconduct, saying that the disruption was putting too much strain on the company.

While WPP hunts for a new CEO, it has handed the helm to two executives, digital boss Mark Read and Andrew Scott, the chief operating officer of WPP Europe who oversaw acquisitions, making them joint chief operating officers.

The sudden departure of Sorrell, the face of the company since he founded it in 1985, has sparked questions as to whether the holding group can remain in its current form of employing 200,000 people in more than 400 companies across 112 countries.

Sorrells departure is negative considering ... how instrumental he has been in assembling the assets WPP has today, said Pivotal Research analyst Brian Wieser.

Any executive filling Sorrells shoes needs to orchestrate assets across the holding company and doing so is a challenge in a fragmented federation of businesses such as those which exist within WPP.

The 73-year-olds departure comes at a difficult time for the British company. In March it published its weakest results since the financial crisis as consumer goods groups such as Unilever and P&G cut spending and other customers jumped ship.

The whole industry is also battling the might of Google and Facebook, which dominate the online advertising market, and watching nervously as consultants such as Accenture move more aggressively into the sector.

The changing dynamics have meant the previous idea of building marketing groups up to offer advertising, branding, planning and research on a global scale - championed by Sorrell and followed by others - is now under threat as clients want more nimble relationships in a digital age.

Many are starting to ask if they can do things differently - creating their own content to place directly on online platforms or working with smaller ad groups.

ALL CHANGE

With so much change in the industry, some analysts have questioned whether the group should seek a new CEO from outside who could look at it dispassionately.

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