• by Maarten Albarda , Featured Contributor, 6 hours ago

It’s impossible to be in our industry and miss the recent avalanche of news coming from WPP. A new CEO, a dire profit warning, a top-to-bottom strategic review by McKinsey -- and, perhaps most troubling, a high-profile lawsuit from a former executive alleging retaliation over concerns about media rebates.

For marketers, especially those who currently contract with any of WPP’s businesses (and there are a lot!), this isn't just a juicy drama. It's a series of red flags that demand attention.

My work is at the intersection of marketing and procurement, and I see the tsunami of turmoil as a critical moment for clients to jump into active attention. Let’s go over a few of the issues that WPP clients are dealing with right now.

Number one: Your agency team is distracted. A new CEO, a profit warning, and the arrival of McKinsey consultants: all a recipe for uncertainty. "Strategic review" is often corporate speak for restructuring and layoffs. Your agency teams know this, and are, at best, distracted and, at worst, actively updating their LinkedIn profiles.

When a holding company is under immense financial pressure, its first instinct is “to look for efficiencies” (cut costs). This will lead to talent flight (which is already happening), with your team potentially being poached by competitors, or your account being serviced by a leaner, more junior, and more stressed-out team. Service quality is almost always the first casualty of internal turmoil.

But perhaps a bigger and more damaging issue is the lawsuit by Richard Foster, former global chief executive of WPP's Motion Content Group. In his lawsuit, Foster asserts that WPP concealed a method to generate additional profits that did not align with the best interests of its clients. When he reported these concerns directly to the company’s top management, rather than addressing his allegations, the agency group responded by terminating his employment, Foster claims. While these are currently just allegations, the suggestion of nontransparent practices throws a shadow over any client-agency relationship.

For years, the industry has been dealing with a lack of media transparency and undisclosed principal trading. This lawsuit adds fuel to that already burning issue. It forces every advertiser to ask: "Are my contracts watertight? Do I have full visibility into where my media dollars are going? Am I the beneficiary of all rebates and discounts I am entitled to?"

So what’s a marketer to do? First of all, don't panic, but do be prepared. Have your procurement and legal teams review your master service agreement immediately, with extra attention to the language around transparency, auditing rights (especially for media), rebates, data ownership, and staffing. If the language is vague, renegotiate it before your next renewal.

Also, have an honest, human-to-human conversation with your agency account leads. Say you see the news and understand the pressure they might be under.  Ask them: "How will this strategic review affect my account? What steps are you taking to ensure my team is stable and focused?" Their answers (or lack thereof) will be very telling.

Ultimately, a supplier in turmoil presents both risk and opportunity. The risk is clear: disruption, declining service, and potential contract issues. The opportunity? This may be the perfect time to demand greater transparency, better pricing, or stronger performance guarantees. As the great Irwin Gotlieb (formerly WPP’s Group M president) said: In confusion lies margin.