Thursday 20 September 2018

Self-made ad mogul Martin Sorrell forced to step aside from world's biggest advertising firm

Martin Sorrell. Photo: Justin Tallis/AFP/Getty Images
Martin Sorrell. Photo: Justin Tallis/AFP/Getty Images

Kate Holton

Martin Sorrell's sudden exit from WPP marks a shocking end to the career of a chief executive who, through sheer force of personality, made it the world's biggest advertising firm.

WPP said in early April it had appointed lawyers to investigate a whistleblower's allegation of personal misconduct against Mr Sorrell, who over 33 years turned a two-man outfit into one of Britain's biggest companies present in 112 countries.

The 73-year-old said on Saturday he was standing down, departing at a crucial time for WPP which has seen its share price fall 30pc this year due to lower client spending, contract losses and a growing threat from Google and Facebook.

"I shall miss all of you greatly," he wrote in an email to staff. "As a founder, I can say that WPP is not just a matter of life or death, it was, is and will be more important than that."

WPP did not give any details of the allegation and Mr Sorrell denied the charges, initially saying that he understood the need to investigate. However, when the matter made it into the 'Wall Street Journal' he told friends he thought it was being used as a weapon to force him out, one source said.

A former rival chief executive and a current CEO told Reuters last week that the fact Mr Sorrell was under investigation showed how the dynamic within WPP had changed.

"To me, it's not actually about whether he did anything wrong but it's the fact that three years ago the board would not even have gone down this path," the former CEO said. "Martin was all powerful and WPP without Martin was not worth thinking about."

The son of an electronics retailer who was educated at the University of Cambridge, Mr Sorrell made his name as the finance director of the start-up British ad agency Saatchi & Saatchi.

He took centre stage in 1985, buying a stake in a small manufacturing firm Wire and Plastic Products Plc to use it as a public vehicle to buy communications groups around the world.

Within a few years he had sealed a string of takeovers, snapping up such agencies as J Walter Thompson and Ogilvy before moving into the cash cow of media planning and buying by creating Group M. Market-research firms and public relations groups such as Finsbury followed.

Mr Sorrell built up the group by pitching aggressively for work, often leading the charge himself and going above the heads of marketing officers to deal directly with their bosses.

The role meant Mr Sorrell became an authority not just on advertising but on the global economy and an ever present voice on the media and at events such as Davos.

Respected by his peers, he was however shown little affection by them in the ego-driven ad business and was sometimes dismissed as a "beancounter" because of his financial rather than advertising background.

David Ogilvy famously referred to Mr Sorrell as an "odious little jerk" when the WPP CEO sought to buy his company. The two ad men later made up and Mr Sorrell signed off WPP's annual report that year as "OLJ".

The success also brought great wealth for the father of four, with the perma-tanned executive earning around £200m (€230m) in the last five years alone due to a performance-linked bonus scheme that angered many shareholders.

CEOs and executives, who asked not to be named, lamented that Mr Sorrell would not get the chance to reposition WPP, which in March posted its weakest results since the financial crash. Whoever takes over will have to decide whether the group of 200,000 people should remain in its current form. Having run the agencies as separate companies for years to stimulate competition, WPP had started to break down the barriers to appease clients who found it unwieldy and unsuited to the digital age where clients could create their own content and place it directly on Google and Facebook.

Brian Wieser, advertising analyst at Pivotal Research, said WPP had the right assets but it had not packaged them properly in recent years and the fact it was more fragmented than Omnicom and Publicis meant it was now harder to reposition.

Mr Sorrell told staff that WPP had come through difficult times before and would do so again, saying he would be available to anyone who wanted advice.

"For the past 33 years, I have spent every single day thinking about the future of WPP," he said. "Good fortune and Godspeed to all of you. Now, Back to the Future." (Reuters)

Irish Independent

Business Newsletter

Read the leading stories from the world of Business.

Also in Business