WPP’s GroupM Merges Media Agencies in Bid to Streamline

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GroupM, the massive media-investment arm of WPP, will winnow down the number of separate agencies under its aegis in a bid to streamline its operations and make ad-tech a more central part of the process for clients who spend millions of dollars on commercial inventory across video, mobile, social and other media venues.

A spokesperson for GroupM said the moves would not result in any layoffs or departures of prominent executives. As part of the announcement, Kyoko Matsushita, who led one of the media agencies, Essence, has been promoted to a new role as chief executive of WPP’s operations in Japan.

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As part of the move, Essence, will be combined with Mediacom, forming the 10,000-employee unit, EssenceMediacom, which counts clients such as Google, Mars, and NBCUniversal among its largest customers. Meanwhile, Mindshare, another prominent GroupM holding, will take over the capabilities of Neo, an agency that has had more of a digital specialty, in an effort to offer clients a broader range of services. GroupM will gather a host of so-called “activation” services from units like Finecast, Xaxis, and GroupM Services under the rubric of GroupM Nexus. Details were previously reported by Ad Age.

The moves illustrate how much advertisers have come to rely on new types of technology to place their advertising pitches. Once known as an industry where a big advertiser might “pay and spray,” or run a commercial dozens of times across broad-reach media, advertising has quickly become a game of using consumer data to place ads more precisely, in specific venues to which a likely customer would probably gravitate. Such techniques are more in demand, as the rise of digital media splinters traditional big-reach venues like TV and magazines. These days, consumers can find content with the narrowest appeal on a YouTube page or Reddit discussion.

“We are passionate about the opportunity technology gives us to help our clients navigate constant change and achieve their growth goals,” said Christian Juhl, Global CEO, GroupM, in a statement.

The moves have the backing of some prominent customers. “Our long-term partnership with Essence, complemented by Mediacom, is helping us deliver on our ambitious marketing goals,” said Joshua Spanier, vice president of marketing at Google, in a statement. “The combination of smart insights, analytical rigor, and expansive creative thinking, scaled around the world, has been unlocking new opportunities, and delivering stronger impact; we’re excited about this next step forward in our work together.”

GroupM unveils the reorganization just weeks ahead of the industry’s critical “newfronts” and “upfronts,” when both traditional and upstart media companies try to sell the bulk of their commercial inventory for their next cycle of programming. And the company follows rivals who have executed similar large overhauls. Publicis Groupe of France merged agencies once known as MediaVest, Starcom and Zenith into a bigger unit now know as Publicis Media.

Nick Lawson was named CEO of EssenceMediacom, while Nicolas Bidon was named to oversee GroupM Nexus. Adam Gerhart continues as global CEO of Mindshare.

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