WPP reported an 11.3% revenue gain for the first half of 2014 to $9.135 billion, driven by the strength of the British Pound. In sterling, revenues were up 2.7% but up 11.3% on a constant currency basis. Earnings before interest taxes, amortization and depreciation were down 2.7% on a reported basis to $733 million British Pounds but up 8.1% on a constant currency basis. Organic revenue growth, which excludes the impact acquisitions, divestitures and currency fluctuations, was up 8.7%. Billings for the first half were down 3% “ravaged by sterling strength,” the holding company reported. Like-for-like net sales for the group’s advertising and media investment operations were up nearly 6%, the best performing discipline for the period. The Branding & Identity, Healthcare and Specialist Communications units were up 3.8%; PR and Public Affairs up 2.7% and data investment and management up 1.7%. The company projected that organic revenue growth for full year 2014 would be “up to 5% in line with market growth.” “It was a strong start to the year with market leading like-for-like revenue growth,” WPP CEO Martin Sorrell told analysts on a Tuesday morning call to discuss first half results. The company indicated that the strength of the British Pound had about an 8% negative impact on revenues and net sales for the first half while the impact for the full year is projected at between 6% and 7%. The company also noted that it has launched two major cost savings initiatives including a project to centralize IT operations. The company will take a charge of about $40 million for the full year to implement the project. Also the firm has begun a major outsourcing program within its global financial units, shifting a number of financial-related tasks from North America, Europe and other places to facilities is Asia to reduce costs. Key new business wins in the first half included the $1 billion Vodafone assignment to MEC, a global creative Burger King assignment ($325 million) and a Pepsi account in China ($250 million). This story has been updated to include details provided by WPP executives on a conference call with analysts and investors.
It’s a big day for WPP on the acquisition front. First GroupM confirmed buying French search marketing specialist Keyade. Now research outfit Millward Brown has confirmed its acquiring InsightExpress, a provider of media analytics and marketing accountability solutions in the U.S. InsightExpress will be combined with Millward Brown Digital, the company's US-based digital unit. Terms weren’t disclosed but WPP said InsightExpress' 2013 revenues were $26.4 million with gross assets of US$8.8 million. The company has over 200 clients including NBCUniversal, Google, Netflix, Hulu and Microsoft. Founded in 1999, the company is based in Stamford, CT, with offices in New York, Chicago and San Francisco and employs 100 people. “Both InsightExpress and Millward Brown Digital have a history of innovating and delivering high impact digital and cross media effectiveness solutions,” said Mary Ann Packo CEO, Millward Brown North America. “By bringing together these two pioneers, we’re building on our strategy to expand our digital offer and accelerate innovation, supported by the strength of Millward Brown’s global footprint and the broader Kantar network." The holding company said the purchase continues its strategy of investing in fast-growing markets and sectors such as data and digital. On a conference call with analysts today, WPP CEO Martin Sorrell said the company has made 43 acquisitions so far this year including the two confirmed today. In recent years, he said, acquisitions have added between 2% and 3% to WPP’s annual revenue growth. It’s likely that WPP will continue its shopping spree. Sorrell said the pipeline for the kinds of acquisitions it’s looking for (small-to-midsized purchases in new media and fast-growing markets) is “very strong.” The company spent about 207 million British Pounds on acquisitions in the first half of the year (about $342 million at today’s exchange rate) and has earmarked between 300 million to 400 million Pounds for acquisitions for the full year. That’s up from the 193 million Pounds the company spent on M&A last year. Sorrell said the company’s last major acquisition came in 2008 with the purchase of research company TNS for nearly $2 billion. WPP's digital revenues (including associates) were over $6 billion in 2013, approximately 35% of the Group's total revenues of $17.3 billion. WPP has set a target of 40-45% of revenue to be derived from digital in the next five years. Millward Brown, whose 2013 revenues exceeded $1 billion, is part of Kantar, the data investment management division of WPP.
After 104 years, the Boy Scouts of America (BSA) have a strong brand awareness, yet it is increasingly struggling to attract new members. In 2013, the organization consisted of 2.613 million youth members, down from 2.775 million in 2012. Now, in conjunction with the start of the new school year, the BSA's recruitment efforts are launching with a new campaign to show parents how Scouting can provide their children with fun adventures. Produced by the BSA's agency of record, Fleishman-Hillard, part of Omnicom, the Build An Adventure campaign features a series of short videos showcasing the diverse range of physical experiences the BSA has to offer, such as fishing, climbing rocks, exploring caves, and racing cars. These PSAs are supported with a vast array of educational and print materials - targeting either younger Cub or older Boy Scouts - that include fliers, billboards, posters, yard signs, door hangers, postcards, and bookmarks. All materials for the campaign are available in Spanish. The campaign is also active online through social media, web banners, and email blasts. Ultimately, the effort drives families to BeAScout.org where they can learn more information and hopefully sign up to become a member. The concept is designed to appeal to children through its adventure-seeking possibilities, while appealing to parents by reminding them that Scouting allows them to spend quality time with their children and develops character-building skills. To that end, last year, the group provided more than 17 million hours of community service. "For parents, every minute with their kids matters so they want to make the best decision on how their children's time is spent outside of school," said Wayne Brock, Chief Scout Executive, BSA. "Through the Build an Adventure campaign, we are demonstrating that choosing to put a child in Cub Scouts or Boy Scouts today is part of the foundation that can help him reach his full potential and become a successful adult. Scouting truly makes the most of the little time parents have to make a positive impact on their children." Meanwhile, this spring, the BSA released the fifth edition of its iconic Fieldbook - Scouting's Manual of Basic and Advanced Skills for Outdoor Adventure, marking the first time a new edition has been released in more than 10 years, as well as the first time a new edition has been available in a digital format. The organization spent nearly $113 million on program development and delivery in 2013, nearly double the $57 million spent in 2012. At the same time, the BSA spent $15.3 million on marketing expenses, down a bit from the $16.3 million it spent in 2012, according to the organization's financial records. This story has been updated to correct figures BSA spent on program development, delivery and marketing.
Puma and DigitasLBi Boston have launched digital and social media initiatives to extend the client’s “Forever Faster” rebranding that was launched earlier this month. Puma developed the online and offline pieces in conjunction with one another, and each uses similar content. In addition to DigitasLBi, JWT is responsible for the TV ads; ZenithOptimedia is the media agency. The campaign has been designed as a long lead-up to the Rio de Janeiro Olympic Games in 2016. "The TV spot and digital videos were produced by different agencies, but as we were shooting the TV spot, we were capturing that content to spread across our digital channels," says Puma's Remi Carlioz, Global Head of Consumer Marketing. Ultimately, this footage illustrates the athletic achievements of its athletes, and hopefully spark viral buzz that runs across social media. Digitas has created two "Faster Delivery" videos, one featuring Olympic sprinter Usain Bolt and the other football player Jadeveon Clowney, that illustrate their speed as they serve as delivery men running to get Puma merchandise to people. In addition, Bolt and other athletes are featured in Vine videos that also use existing footage of their athletic achievements. "Faster Delivery brings to life the relentless nature that Puma has for pushing the norm, thus being the fastest moving brand in the category," says Carlioz. "It connects our athletes to our consumer and fans in an irreverent way that captures the essence of the brand, and surprises them in the same manner that we intend to do when we develop our products. If you look at it, we as a brand did not talk a lot. Our athletes did." Meanwhile, Flock to Unlock is a Twitter card technology that challenges fans to tweet in order to “unlock” exclusive new content. In this case, Puma and DigitasLBi used “flock to unlock” to help debut its “Forever Faster” television spot. "But beyond the technology or the tool, the important part was how to reward our fans with exclusive content," says Carlioz. There are also additional tweets and Facebook posts of the Forever Faster athletes on Puma's social media channels, as well as display ads to support the broader campaign. Innovative social media platforms, such as Vine and Twitter, are a critical aspect of this campaign. "As a brand we sponsor game changing athletes who inspire other game changers, thus it was natural to explore this approach in the digital space," says Carlioz. "The medium we use obviously influences the way we deliver the message. We looked at platforms like Twitter, which reach the game changer demographic with first-to-market products like Flock to Unlock. We looked at mediums like Vine, which changed the game from a content perspective. We created programming that changes the way consumers connect with our athletes. The Forever Faster campaign is about bringing us back to our performance roots and our heritage of pushing sports forward. The digital space was a natural fit to bring these goals to life." Whether consumers accept this rebranding remains to be seen. "The major challenge is that you never know how it's going to be perceived - so far it seems to be exceeding our expectations," says Carlioz. "Also, talking to game changers means taking risks. We took risks, on TV, online; risks in the way we talk, and risks on the media strategy. To us it's not really risks though, it's about trusting our instincts." Puma declines to specify total ad spend, but says it expects to increase marketing significantly in the second half of the year. DigitasLBi was named Puma's digital AOR in February.
WPP’s media management arm GroupM has acquired Keyade, a leading digital search and performance specialist in France. Terms weren’t disclosed. Operating autonomously within GroupM France, its business development will be supported by GroupM, the company said. And Keyade will act as a resource to GroupM agencies including KR Media, Maxus, MEC, MediaCom and Mindshare. Keyade’s proprietary attribution software for advertisers, called Madmetrics, will be integrated within the data, tools, research and strategic planning offerings of GroupM France, and will be offered to the group’s clients. Operational control of Keyade will remain with its three founders, Denis Vaillant, Julien Babin and Antoine Mermet, who founded the online performance marketing agency in 2006. Serving on Keyade’s board will be Pierre Conte, CEO GroupM France, who will also serve as Keyade’s Chairman. Jean-Francois Busnel, CFO of GroupM France, and the two co-executive directors of GroupM Interaction, Alexandra Chabanne and Olivier Mazeron, will also serve on the Keyade board. Keyade employs 70 people in Paris and opened a branch in Dubai in 2011. CEO of GroupM EMEA, Dominic Grainger, stated: “The acquisition of Keyade in Paris is a part of GroupM’s global strategy to build new models for performance with advertisers. It also shows our commitment to further develop the leadership of GroupM in France.”
Now here's a little item that might start a trend. Because, as we all know, everyone in this business copies everyone else. Not that this is the first time this was ever done. But still. To garner attention for itself, DC-based product design and development consultancy (because everyone's doing *that* right now) Intridea purchased a billboard for a week right across from Ogilvy & Mather's offices in New York. The billboard reads, simply, "Ogle this, Ogilvy" and directs the agency to a custom URL which is filled with a collection of wacky animated gifs (keep reloading the site) and the copy "Made you look. Now hire us." So did it work? Apparently so. Intridea says it was contacted by Ogilvy New York CEO Lou Aversano and OgilvyOne Managing Director Dimitri Maex and a meeting has been set for September 3. Is that awesome or what? Havas Worldwide Kazakhstan has issued an apology for an ad it created for a gay club in Kazakhstan's commercial capital, Almaty. The ad, for Studio 69, shows 19th century composer and folk singer Qurmanghazy Saghyrbaiuly, kissing Russian poet Aleksandr Pushkin. The usual uprising from anti-gay groups and activists ensued with a lawsuit filed against the agency on August 25 claiming the ad "insulted both Kazakhs and Russians." Homosexuality was a criminal act in Kazakhstan up until the 1990's. Havas issued an apology for the ad on its Web site and Facebook page. Well, it's about time, people! A new survey from STRATA found that 45% more ad agencies now have a keen interest in online video and streaming. Currently, 67% of ad agencies claim video is a primary focus. Yet while interest and implementation of video is on the rise among agencies, 40% are still unsure as to the effectiveness of digital video ads. Of the findings, STRATA President Joy Baer said: “While dollars continue to flow to the traditional advertising mediums, our agencies continue to ask for better ways to buy digital video advertising. We are seeing long-form digital video content increasingly mirror the 30-second TV ad experience, further blurring the lines between devices.” Separately, the same study found 39% of agencies are not convinced that they entrust programmatic with their media-buying needs. But 89% plan to forge ahead with Facebook programs because, let's be honest, Facebook rules the world. Okay - this is nice. California agency Nice Advertising and TubeMogul have announced a deal to streamline the agency's video ad-buying. Nice will utilize TubeMogul's full software suite to plan, buy, optimize and measure video ads across devices. Of the deal, Nice Advertising Director of Media & Analytics Eliot Kent-Uritam said, "Video is the ideal medium to tell Jelly Belly's [a Nice client] story to fans and newcomers alike. Doing digital video properly requires alignment of targeting and content with the story telling. TubeMogul helps us do this better.
When I first walked in, I saw that Grupo Gallegos looked like a pretty cool advertising agency. Behind the receptionist, there was an impressive amount of hardware. I don’t know what I was expecting to see. I’m sure I wasn’t expecting the receptionist to be wearing a sombrero, but I didn’t see anything that made the place particularly Hispanic. Past the workstations and the main conference room, I saw that not one creative person had a Che Guevara poster. It was a three to six-month freelance/consulting gig. An “interim CCO”; that’s what they said I’d be. While I had never been an “interim CCO” before and hadn’t heard of anyone who’d ever been an “interim CCO,” I figured that working with people who know first-hand how the demographics of the country are changing would give me insight into one of the biggest challenges clients face these days. It would give me an edge. In addition, I expected I’d enjoy the easy commonality of being the minority among minorities. I didn’t, however, expect to learn that even if you don’t realize you need to be taken down a notch, it’s healthy to be the gringo once in a while. During World Cup, to be one of the guys, I rooted for the South American teams over the European teams, which I unfortunately undermined each time I referred to a match as a game. I butchered peoples’ first and last names. I learned that saying “hola” made me sound like a jerk. I learned I could be nobody but my gringo self. More importantly, I began to appreciate how difficult clients have it, as most of them come from the general market as I do, and, like I did, they have to confront their own preconceptions. On top of that, I imagine that they have the additional pressure within their organizations to prove that they are advertising to minorities. So, to make sure that the communication is speaking, indisputably, to the Hispanic consumer, there’s a yearning to see obvious, physical cues of Hispanic culture in the work. John Gallegos calls it being “overly ethnicized,” but I get it and I sympathize. When you don’t speak the language, you want a guarantee that you’re talking to the right folks, and having these cues, points to hard evidence. I hope that’s the case, anyway. I mean, I hope no one is thinking that Hispanics won’t recognize themselves unless they see a piñata in the family room. Of course, such cues aren’t always necessary for clear, compelling communication. Recently, when Gabriel Garcia Marquez died, the entire world mourned. The fact is, all the time, works of art communicate across borders. My friend Juan pointed out that Nike was a great Hispanic campaign long before it went global. Juan has a point. I wonder, if a film projected only title cards and a soundtrack, like one of those charming Google spots, could it, potentially, resonate with the general market? So, why can’t the same be true of advertising to Hispanics? Cue-less is not necessarily clueless. I learned something else, too. To what degree it’s inherent in other multicultural agencies, I can’t say, but here at Grupo, I encountered an uncanny ability to find an insight, particularly one in fertile ground. I have a theory about this. While the rest of the world has been distracted by technology, data, holding company agendas and a host of other shiny objects, my friends, here, have kept their eye on the consumer. Clients have been coming to them for their knowledge about, and insight into, their target. That’s been their raison d’etre –– I mean, razon de ser. Consequently, they tend to want to do more than connect with a consumer, because when you know someone deeply, as they do, you tend to want to forge a meaningful and important connection. And whatever muscle it takes to forge such a connection has only become stronger, while it has atrophied for others. Why isn’t our business being led by more Hispanic agencies? Certainly, force-fitting those cues can’t help. And relegated to a secondary role on a client’s roster, many Hispanic agencies don’t want to jeopardize their core business by competing with AORs. Meanwhile, the best and brightest among our junior talent enter our profession with the assumption that the big leagues reside in the general market. All I know is that a lot of potential is left untapped, and great work should be able to come from anywhere. Over the past several years, I’ve believed that the quality of our industry’s work has slipped. John Hegarty has been very vocal about this, and I agree. As I see it, the industry hasn’t been applying the new tools to the fundamentals and all that we know to be true about how human beings change. To do that, we have to be consumer-obsessed. I’m not saying general market agencies need to become Hispanic agencies, or vice versa. These distinctions are as superficial as the cues that profile the consumer. But the agencies that will rise to the top in this new demography will, I think, have a talent for connecting to people, their creativity in sync with their empathy. If you have that, everything –– technology, data and innovation ––falls into place. And whether it’s intentional or not, the folks at Grupo put those things in that perspective, making Grupo inclined to tell the big, meaningful stories that move people –– like “Battle” for Milk–– even though they don’t get nearly enough opportunities to see them realized. Perspective is everything, I suppose. And to think I went outside the general market to find the inside track.