Sir Martin - it's rehabilitation, not revenge // Standard's ed-ad pickle
The recent travails of WPP have tarnished Sir Martin Sorrell's business reputation, writes Dominic Mills. The launch of S4 Capital offers the best chance he will get for rehabilitation. Plus: keeping check of the Evening Standard's editorial integrity
Increasingly, these days, I find myself checking out the WPP share price.
The market view is a simple and objective way to assess the seriousness or otherwise of the current ups and downs of WPP.
But it is also because, as various senior WPP executives have told me, the share price fall over the past year (just under 30%) has severely damaged their share options and they are feeling the pain in their wallets. It is therefore helpful to know whether to get out a small violin or the Kleenex when you meet them.
So, what did the share price do last week when Sir Martin announced his plans for S4 Capital? The answer is that it did zip over the five days, in fact finishing marginally up. Compare that with the previous week, when the double whammy of the HSBC media loss and Accenture’s move into media pushed it down 7% over the week.
Does that mean that S4 Capital is no threat to WPP? I’d say probably...but you never quite know.
Certainly it is clear that the industry is shocked by the speed with which Sir Martin has moved. It is about six weeks since his departure, and it feels as though he had the S4 plan in his back pocket even as he was negotiating his exit. You can read good comment on Mediatel here.
Viewed from one angle, this looks like pure revenge. But unlike the Mafia, who like their revenge cold, this time it’s more lukewarm, if not hot, a parallel drawn by the always well-informed Sky News city editor Mark Kleinman.
Certainly, Sir Martin needs to move while the dishes are still hot. Time is not on his side: age, the possibility that his currency will lose value, and the need to strike while the industry is in flux, all mean he has to get a move on.
Indeed, the Mafia parallels don’t end there. The silence around the exact circumstances of his departure - leading to the somewhat pathetic fig leaf of personal data and privacy offered by the board (an unexpected use of GDPR) to explain its inability to say anything - sounds like ‘Omerta’, the Mafia vow of silence.
Back to S4. Maybe it’s not all about revenge. Its stated areas of play are a) multinational b) technology c) data and d) content. Pretty obvious, really. That is where the action is.
Note, so far, no mention of creative, PR, media or research, the key pillars on which WPP and its peers are built.
In that sense, you can see why S4 is not a direct threat to WPP, or indeed the other holding companies. And relative to them, the £150-£200m or so he has to make acquisitions won’t buy him very much, not least because any seller will jack up the price when he comes knocking. He will be a buyer in a seller’s market.
But Sir Martin has always been a man with the ability to see round corners and think big, and where he goes will tell us much about the way he sees the future shape of the industry.
Nonetheless, every move he makes will put his strategic credibility in the spotlight. If the WPP model - completely his creation, remember, and which he defended to the hilt to the end despite investor unrest - was the right one, why is he going a different way now?
And if investors are asked to support his new vision, why didn’t he do more to move WPP that way? If he knew the WPP model was unattractive to advertisers, why didn’t he take action?
The answer is, I think, that in WPP he became a prisoner of his own making. So much of his personal and emotional capital (aside from the financial) was invested in it, he couldn’t change, however much he wished to.
Freed, he can now do the things he knew he ought to with WPP, but for various reasons - pride, hubris, whatever - was unable to. Whatever the exact reasons for his departure, the travails of WPP over the last 12-15 months have severely tarnished his business reputation.
S4 thus offers him the best chance he will get for rehabilitation, and it is better looked at through that frame rather than revenge.
Standard gets itself into an ed-ad pickle
The Evening Standard got itself into a bit of bother last week after details of a new advertiser initiative - London 2020, going live this week - leaked, leading to accusations that it has dropped its editorial trousers for £500,000 cash from the likes of Uber and Google (boo, hiss) in return for supplying positive and unbranded news coverage - this in addition to the normal advertorial and promoted content stuff.
Mainstream rivals had a bit of fun with it too, notably the Times and even BBC Newsnight (both last Thursday).
The nuts and bolts are this: for £500,000 or so, advertisers can associate themselves with various editorial strands or campaigns the Standard plans to run on behalf of Londoners. They cover such areas as clean air/pollution (supported by Uber) and technology and education (Google). You might think, of course, that transport and personal safety were more Uber’s bag, but that would surely be more controversial.
Starbucks rejected the chance to sign up on plastic waste, with one executive quoted as describing the idea of buying news coverage as “PR death...something you might do in Saudi Arabia, but not here.”
But for the likes of Uber and Google, whose negative PR far outweighs the positive, you can see why this might be attractive.
Of course, much of what the Standard is offering is perfectly normal these days, albeit that it underlines the way the barriers, always fiercely protected in newsbrands between the Church of Editorial and the State of Ad Sales, have come down.
Except for one contentious area. The last item on a slide presentation - which you can see in the picture in the Open Democracy story - promises ‘Money-can’t-buy’ [content]: we expect every campaign to generate numerous news stories, comment pieces and high-profile backers...’. I asked the Standard to send me the deck but, strangely, it declined.
What does this mean? On the face of it, it looks like an unambiguous offer of puff masquerading as editorial.
The Standard says that interpretation is to take it out of context, although it won’t say what the context is beyond suggesting that it could mean other media will generate their own news stories and comment off the back of the Standard.
Really? FFS, if they think that they’re in fantasy land. Unless it is to poke fun at the Standard, of course as Giles Coren did at the weekend.
Anyway, the Standard insists its editorial integrity is not compromised. “It is absolutely not the case that any commercial agreement would lead to 'favourable' news coverage,” it told me. “The campaign will be clearly labelled as commercial content.”
I hope that clears it up. But there’s a simple way to check as from next week. Just compare what the other media say about Uber and Google (both of which are bound to make negative news at some point) with how the Standard writes the stories. Or indeed, if it writes them at all, because not covering negative news is the other side of the coin to writing positives.
Let me leave readers with this little piece of doggerel written by the not-very-well-known poet Humbert Wolfe...
You cannot hope to bribe or twist
(thank God) the British journalist.
But seeing what the man will do
unbribed, there’s no occasion to.
Silly Uber and Google. They could have saved half a million each.