Group M is merging MediaCom and Essence amongst a raft of modifications at WPP’s media division.
EssenceMediacom will launch with 10,000 staff in 125 workplaces, dealing with near $25bn (£19.7bn) in billings.
MediaCom, with round 8,000 employees, is considerably bigger than Essence, which has about 2,000, and the merger will assist the latter to scale its providing.
The rollout will start in 2023 with a concentrate on main markets first, though the 2 businesses will function individually within the UK for “a interval” of time attributable to consumer conflicts, which embrace Sky (a MediaCom consumer) and BT (an Essence consumer).
Nick Lawson, the worldwide chief government of MediaCom, will assume the identical position on the helm of EssenceMediacom (the merged company will drop the capital ‘C’ from the MediaCom title as a part of the rebrand).
Kyoko Matsushita, the worldwide chief government of Essence, will likely be promoted to a brand new position as WPP’s CEO in Japan.
The overhaul means Group M will transfer from 4 to 3 flagship businesses: EssenceMediacom, Mindshare and Wavemaker.
Christian Juhl, the worldwide CEO of Group M, mentioned the “simplification” drive throughout the media division, which employs 42,000 and manages over $50bn of billings, is about driving progress, not reducing prices or jobs.
“This isn’t any form of train in attempting to create synergies on the associated fee aspect, it’s actually about creating synergies for progress and alternative for our shoppers going ahead,” Juhl informed Marketing campaign.
Key highlights of Group M shake-up
• Essence and MediaCom will merge to type EssenceMediacom, “fusing the digital and data-driven DNA of Essence with MediaCom’s scaled multichannel viewers planning and strategic media experience,” the corporate mentioned.
• Finecast, Xaxis, and Group M Companies – Group M’s world neighborhood of activation specialists – “will likely be introduced collectively to type Group M Nexus, the world’s main media efficiency organisation”.
Mindshare will full the combination with world efficiency company Neo, “offering shoppers with a broader vary of transformative media companies.”
Juhl mentioned: “We’re passionate in regards to the alternative know-how offers us to assist our shoppers navigate fixed change and obtain their progress targets. The way forward for advertising and marketing is outcomes-driven, supported by audience-first planning and frequently enhancing, AI-enabled efficiency requirements.
“Via Group M Nexus and our company powerhouses Mindshare, Wavemaker, and EssenceMediacom, we’re constructing a tech-enabled future, side-by-side with our shoppers, that’s accountable to advertisers’ progress targets and to our imaginative and prescient for an promoting ecosystem that works for everybody.”
Trade consideration will concentrate on EssenceMediacom. MediaCom was based in Germany in 1986 as part of Gray Group and went on to merge with The Media Enterprise within the UK in 1998, earlier than changing into a part of WPP in 2004. Essence was based within the UK in 2005 and has made its title as a digital specialist, which led to its acquisition by WPP in 2015.
The merger might shock some business observers, notably within the UK, the place MediaCom is already by far the most important media company when it comes to billings (£1.4bn) and Essence – after a stellar year of 74% growth – is the fourth largest (£531m), based on Nielsen Advert Intel information for Marketing campaign’s College Experiences.
A single company to deal with each model and efficiency
The 2 businesses already work collectively on a number of, massive world accounts, together with Google, NBCUniversal and Mars.
Within the case of Google, MediaCom performed a key position in serving to to win the consumer’s offline planning and shopping for when Essence consolidated the worldwide media account final yr, and the 2 businesses arrange a cross-agency crew, known as the Media Futures Group, in what has turned out to be a blueprint for the mixture.
Juhl informed Marketing campaign that the merger will provide shoppers a one-stop store that marries Essence’s digital artistic know-how and information pushed efficiency with MediaCom’s world scale, media planning and brand-building capabilities throughout the total spectrum of media channels, not simply digital.
“Shoppers proper now, greater than something, need a single company who can deal with each model and efficiency, single measurement metrics, single optimisation targets and actually interested by channel fluidity and easy methods to transfer issues to no matter is best,” mentioned Juhl, who beforehand ran Essence and led the sale of the enterprise to WPP in 2015.
“The issue with being a pure-play digital-only [agency], as a lot as there’s nice progress round it, you may’t deal with half of the media combine. So that you’re at all times kind of caught on this gap of getting to work throughout completely different businesses and for shoppers that may be irritating. We see shoppers asking increasingly more for world consolidation.”
For MediaCom, the merger will bolster its digital and efficiency credentials because it is ready to faucet into WPP’s digital and Google specialist company. Juhl mentioned Essence and its shoppers will profit from the size and native media market experience offered by MediaCom’s community of 125 workplaces.
“By bringing these two issues collectively, we remove the necessity to decide on, you’ve received one company that has the worldwide scale functionality, embedded down with one of the best digital pondering and efficiency orientation within the market,” Juhl added.
“The company mannequin our shoppers need for the longer term”
Lawson mentioned the brand new EssenceMediacom community builds on “the sturdy and confirmed relationship between the businesses to create the company mannequin our shoppers need for the longer term”.
He added: “[This agency model is] one based on good technique and brand-building capabilities, with pioneering digital experience working all through. EssenceMediacom is not going to solely assist our shoppers see the larger image and reimagine what’s doable; it would additionally present alternatives for our individuals to upskill and prepare in new areas, additional enriching and enhancing their careers.”
Juhl mentioned the merger roll out would start in 2023, possible beginning with main markets however pushed by consumer wants. Requested immediately about any potential job losses at EssenceMediacom, he mentioned: “No, proper now I’m not seeing something.”
If there are any modifications to job roles, there are “a number of completely different alternatives for very proficient of us” elsewhere within the group, he added.
Juhl mentioned that shoppers have been broadly supportive of Group M’s consolidation plans to deliver nearer collectively digital efficiency, tech and conventional media planning and shopping for.
Luis Di Como, the chief vp of world media at Unilever, a significant Group M consumer, welcomed the modifications.
“Digitisation is altering how customers stay, play and store and is subsequently reshaping our business at pace. The convergence of media, leisure and commerce in digital environments is enabling us to construct manufacturers and convert to gross sales in the identical place,” he mentioned.
“However with a purpose to present customers with an easy end-to-end expertise, as an business we should utilise new abilities and experience, and harness new methods of working. We’re inspired by the modifications introduced right this moment by Group M which is able to see larger integration between data-driven advertising and marketing, multichannel viewers planning, efficiency, and strategic media experience.”
Group M’s new Nexus
Group M is combining Finecast, Xaxis and GroupM Companies right into a 9,000-strong cross-channel efficiency platform known as Group M Nexus, which will likely be led by Nicolas Bidon, beforehand world chief government of Xaxis.
Group M Nexus will likely be answerable for the activation of greater than two million campaigns every year and is described because the business’s “largest crew of specialists in digital channels and platforms, search, social, programmatic, AI, cross-channel optimisation, and data-driven applied sciences and software program”.
“GroupM Nexus unites main media expertise, digital companies excellence, cutting-edge AI know-how and distinctive scaled partnerships into a brand new cross-channel efficiency organisation with one objective: energy progress for our individuals, our businesses and the superb manufacturers they signify. We can’t wait to innovate collectively and unlock new alternatives for everybody,” Bidon mentioned.
Mindshare and Neo
The ultimate piece of the worldwide restructure is Mindshare finishing the combination of Neo’s 1,200 efficiency specialists, consultants and digital-first companies into its providing. Neo already operates inside the Mindshare community however has been underneath its personal model; it would now undertake the Mindshare branding.
“It is a journey we’ve been on for the previous yr with many purchasers who’ve been demanding extra various media companies to drive their progress,” Adam Gerhat, world chief government of Mindshare, mentioned.
“The merger delivers seamless entry to Neo’s digital-first capabilities and a relentless concentrate on efficiency fashions to speed up Good Development. For our groups it means extra alternative and the flexibility to create larger influence internationally. I’m delighted to associate with Neo CEO Nasreen Madhany as we full the combination of the 2 companies and transfer into a brand new future collectively.”
The way it comes collectively
The brand new Group M consumer serving providing will function as a triple-layered pyramid construction. On the backside of the construction is WPP’s world information and know-how firm Choreograph, which launched in April 2021 and assists shoppers with first-party information methods, together with identification options, viewers insights, predictive evaluation and optimisation.
Within the center layers is Group M Nexus, which offers shoppers with efficiency activation, AI and machine studying, and addressable media options.
On the highest layer will likely be three media businesses: EssenceMediacom, Mindshare and Wavemaker, which work with shoppers to set media methods and execute towards them.
Juhl’s wider imaginative and prescient for Group M is to function extra like a software program firm that’s targeted on consumer outcomes.
“I am actually optimistic about the place media sits proper now. I feel that the efficiency factor, the outcomes-based factor will likely be transformational for the business,” he mentioned. “We’re seeing large contracts the place we’re taking dangers together with our shoppers, and have the chance to profit with our shoppers. Extra shoppers are saying, how do you tie your success to ours?”