WPP WPP PLC

By Nat Ives 

WPP PLC is combining iconic creative agency J. Walter Thompson with the digital agency Wunderman, the latest such merger since Chief Executive Mark Read took over less than three months ago and began looking to bolster its lackluster creative agencies. WPP said in September that it was uniting Young & Rubicam with VML.

The latest move will create an agency called Wunderman Thompson with more than 20,000 people in 90 markets, WPP said Monday. Wunderman Global Chief Executive Mel Edwards will take the same title at the new entity; J. Walter Thompson Chief Executive Tamara Ingram will be chairman.

A WPP spokesman declined to comment on the prospect for any staff reductions.

The similar mergers are part of Mr. Read's strategy to simplify WPP's sprawling networks for marketers that want better integration of functions such as creative, digital, media-buying and data. Mr. Read also has said he believes he can revive revenue growth at the company's creative shops partly by linking them more closely with sibling digital agencies.

WPP doesn't break out its creative agencies' results, but Mr. Read said he was "not happy with the state of our creative agencies in North America" as he discussed WPP's underwhelming performance in the second quarter, its most recent financial report.

"Clients want greater simplicity from their partners and this development, like others at WPP, is designed to reshape our company around their needs," Mr. Read said in a statement Monday.

J. Walter Thompson, one of the oldest agencies in the world, was founded in 1864 as Carlton & Smith. It has had a hand in many well-known jingles and slogans, such as "Oh, I wish I were an Oscar Mayer Wiener" for Oscar Mayer, the result of a jingle contest, and "The Few, The Proud, The Marines" for the United States Marine Corps.

WPP acquired J. Walter Thompson for $566 million in 1987, marking one of the first hostile takeovers in the agency business. It went on to buy a string of agencies, including Young & Rubicam, Ogilvy & Mather and Grey Global Group, ultimately becoming the biggest agency holding company, by revenue, ahead of rivals such as Omnicom Group, Publicis Group and Interpublic Group of Cos.

Wunderman, founded in 1958 as Wunderman, Ricotta & Kline, became part of the portfolio because Y&R acquired it in 1973, although Y&R only joined WPP years later.

Some clients have come to associate WPP's sort of size with cumbersome complexity, and increasingly are looking for more efficient ways to achieve marketing goals.

In Mr. Read's effort to address that situation, he is creating new challenges. Merging distinct companies can be difficult: Interpublic's attempt to combine Lowe with Deutsch ultimately didn't take, with Deutsch becoming its own shop again and Lowe eventually merging with Mullen. WPP now has two significant mergers to execute smoothly at once.

Write to Nat Ives at nat.ives@wsj.com

(END) Dow Jones Newswires

November 26, 2018 12:35 ET (17:35 GMT)

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