There’s lots of talk about the shareholder value on offer for breaking up WPP and selling off its Kantar research arm. However, have the analysts considered the impact of losing the research function on the core advertising business and its clients?
A key feature of WPP’s model to date is an offer to plan, execute and evaluate advertising investment. Demonstrating predictable results is a great package. Naturally this needs to remain. Advertising can be an expensive exercise. Customers who buy advertising seek reassurance beforehand - that what they are about to spend will work, and afterwards, that it has worked to the highest level possible.
Selling off the research businesses might generate cash in the short term but taking away the planning and evaluation offered by in-house research sounds like a risk. But is it?
By doing so you could lose two things: an end to end service for clients and the ability for WPP to mark its own homework.
But the breakup also provides opportunities for WPP agencies in both these areas.
The success of WPP over the years has been in trading on the quality of it’s people, their experience and their ideas. WPP agencies now have an opportunity to pick the best research or sector expertise for their client’s needs, without feeling obliged to stay in-house. By partnering with a research agency they freely choose, advertising agencies can ensure they get the right people to work with their clients.
Clients of WPP agencies will no longer (whether rightly or wrongly) be able to complain about campaign evaluation that feels like ‘marking your own homework’ or that ‘it’s all black box scores and traffic lights’. Clients will be open to the role of research helping them to find out what is working, what could be done to optimise their campaigns and benefit from the removal of any possibility of a conflict of interests.
Good advertising research is about market researchers working closely with ad planners to identify ways to improve and fine tune a campaign to ultimately maximise its impact for the client’s brand or product.
The world of traditional advertising is under pressure from the transparency offered by online alternatives measured in clicks, likes and shares. Clients need to trust the research and evaluation they receive.
The real opportunity of this breakup is for WPP’s advertising agencies to offer their clients better research and evaluation choices.
Selling off WPP’s research agencies will generate cash in the short term, and potentially some uncomfortable feedback about the ads. Over the long run it should be positive for clients, WPP and the research and insight community.
Morar HPI has been tracking other people’s advertising clients for 30 years using a range of best practice and proprietary methods. If you would like to know more about how we could give you full, fair and actionable feedback on your advertising, please get in touch with Clive Ellis or Dan Lewis.