Now 70 years old, WPP’s chief executive shows no sign of slowing down. Providing the opening address to an Enders Analysis conference last week, the highest-paid leader on the FTSE 100 managed to strike fear into agencies battling for Tesco’s prized media business and make the blood boil at our biggest newspapers.
On Tesco, Sorrell admitted that the rumours were true: WPP is "interested" in acquiring its data specialist, Dunnhumby. It’s a bold move that supports his assertion that the rise of the Maths Men has been a major building block for WPP. The handling of data and insights now represents more than 25 per cent ($15 billion) of business at the world’s biggest marketing group.
'With valuations for Dunnhumby as high as £2 billion, any stake will represent one of WPP’s biggest investments'
With valuations for Dunnhumby – which handles Tesco’s Clubcard and services clients such as Procter & Gamble and General Mills – as high as £2 billion, any stake is likely to represent one of WPP’s biggest investments to date. The group stands to gain access to information on one billion consumers and tools that help companies set prices and promotions.
The fact that Sorrell has chosen to reveal his hand now, when speculation started in January, indicates talks are moving at speed. Those who know his style suggest his timing – just days after Tesco began the £90 million media review – is no coincidence either.
Tesco’s relationship with its current agency, Initiative, has developed over 20 years. The amount of data Initiative now handles for the retailer has been a major strength, so any move will result in significant upheaval. With MediaCom now in fierce competition for the account, there’s certainly no harm in WPP, the agency’s parent, making it known that it is circling Dunnhumby.
Also at the Enders event, Sorrell – drawing on Mary Meeker’s now infamous presentation slide that shows print media supposedly getting more than its share of adspend – again noted that newspapers and magazines’ share of spend far outweighs the time consumers spend with them. It’s incendiary stuff for a sector battling for survival, but more so coming from WPP’s leader. Kantar, his group’s data arm, is one of three specialists currently vying for the multimillion-pound National Readership Survey business. Add to this the fact that WPP handles all advertising and media for the UK’s biggest newspaper publisher, News UK, and you can only marvel at just how many horses Sorrell’s trying to ride.