Consolidation and new competition

What constitutes competition is ever-changing. It’s not just direct competitors like Publicis, Omnicom, Havas, IPG and Dentsu; it’s Nielsen, Ipsos, Adobe, Salesforce.com, Google, Facebook, Amazon, Apple, Twitter, Tencent, Deloitte Consulting et al. The differences between us will continue to narrow.

Bigger companies will have the advantage of size, clout, technology and investment. Smaller companies will have the advantage of more responsive structures, and more entrepreneurial, flexible people.

It remains to be seen what will happen after the mega-merger between Publicis of France and Omnicom of America (‘POG’). Some have asked whether WPP will respond by acquiring major rivals to bolster its size. There are no plans to do so.

The client and people instability and uncertainty created by the POG merger represents our biggest opportunity. We are already seeing the benefits as we increase our share of new business wins and attract unsettled talent from the protagonists to WPP companies. On the client side, it will be interesting to see what the financial cocktail of cheap long-term finance, family private equity offices with longer-term investment horizons and world-class managements (e.g. 3G Capital and Heinz), together with activist shareholders (e.g. Carl Icahn), will do in sectors such as fast-moving consumer goods.

Chapter 7 of 13

54%