WPP WPP PLC

By Alexandra Bruell 

WPP PLC is setting a new rule for its agencies after a tough year of client losses and a leadership shake-up.

In one of his early moves, new Chief Executive Mark Read has mandated that the company's media agencies report to WPP any pitches that could generate a minimum of $20 million in revenue, increasing corporate oversight of the new-business process, according to people familiar with the matter.

The change is meant to help WPP work with its media agencies to decide whether they should partner with other WPP units in such reviews, and ultimately reduce the amount of internal competition for marketers' accounts, the people said.

On the company's most recent earnings call in September, Mr. Read said WPP tries to make sure marketers have its best resources regardless of the agencies they begin with. "Often, there's one company in the lead," Mr. Read said on the call. "But increasingly, it's a number of different WPP companies."

Offering an example, Mr. Read said WPP won a Mars pitch in which lead agency MediaCom partnered with data and marketing agency Wunderman and digital shop Possible.

The company's media agency operation, a top moneymaker for the ad holding company, has come under pressure in recent months due to a handful of account losses, including United Airlines, HSBC and American Express.

Mr. Read, the former Wunderman chief executive who was named WPP's CEO last month after the April departure of Martin Sorrell, is conducting a strategic review of the company's operations and assets. He already has announced the combination of creative shop Y&R with digital agency VML, part of a broader plan to boost growth at the struggling creative shops and provide clients with more integrated offerings across marketing disciplines, such as digital, creative advertising and media buying.

Agencies in recent years have struggled to adapt to rapidly changing client needs as consumers spend more time online. Marketers are increasingly looking for simpler agency solutions that eliminate service duplication and address their growing need for digital marketing and data and analytics support.

Mr. Read discussed some of these problems earlier this month at London-based WPP's annual leadership meeting, which this year was held in Brooklyn, N.Y. He was upfront about the challenges facing creative agencies and overall WPP business in the U.S., but expressed optimism about telling a new WPP story in the marketplace and sharpening the company's focus on client business, according to people who attended the event.

WPP in September reported weak second-quarter results, especially in North America. Net sales dropped 3.3% in North America, and increased 0.7% globally.

Write to Alexandra Bruell at alexandra.bruell@wsj.com

(END) Dow Jones Newswires

October 24, 2018 05:14 ET (09:14 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.