WPP said Monday it will merge digital agency network Wunderman with storied creative agency J. Walter Thompson (JWT), forming a new entity called Wunderman Thompson.
Wunderman Thompson will employ 20,000 people in 200 locations across 90 markets, according to Adweek. Wunderman’s newly minted global CEO Mel Edwards will lead the agency, while JWT global CEO Tamara Ingram will become chairman.
“We are optimistic that existing client relationships will continue to grow under the new creative, data and technology agency,” Edwards said in an email to AdExchanger. “We see this as a huge opportunity to provide clients with an end-to-end solution through creative, data, commerce, consulting and technology services at a global scale.”
The merger is part of WPP’s efforts under new CEO Mark Read, who previously served as CEO of Wunderman, to streamline its organization and revive its struggling creative agencies. Founded in 1864, J. Walter Thompson is the world’s oldest ad agency, famous for developing iconic campaigns for brands including Oscar Mayer, Kraft and Johnson & Johnson.
But creative agencies, which operate in the world of the big idea and 30-second spots, have struggled to grow as clients look for digital assets with multiple iterations and quicker production turnarounds.
“There’s definitely pressure on the traditional parts [of the business], and I think that has been more intense in the last couple of years,” Read said during WPP’s Q2 earnings call in September.
Under Wunderman, JWT’s clients could be better positioned to use data-driven creative. JWT has the opportunity to soak up the digital knowledge that Wunderman has gained over the past few years under Read’s leadership.
“What we’re seeing is another stroke from Mark Read to consolidate and strengthen the creative offering,” said Jay Pattisall, principal analyst at Forrester. “This is not the death of the creative agency but the rebirth of creativity in the agency in a new form, one that is mastering technology, data and strategy and combining that with brands and conceptual creativity.”
Sixty-year-old Wunderman has been a bright spot of growth during WPP’s two years of financial decline. Originating as a direct marketing agency, Wunderman has grown its services in data, analytics and consulting. And its 2017 merger with the agency Possible bolstered its ecommerce practice.
But JWT’s size and stature as one of WPP’s most historic creative agencies makes it a tremendous integration challenge for Wunderman's digital, data-driven culture, Pattisall said.
“There are cultural considerations to take into this,” he said. “JWT is an iconic creative agency brand, and that culture has a very distinct flavor to it compared to Wunderman’s.”
Still, the two agencies share some clients, including Shell, Nestlé and Johnson & Johnson, as well as complementary skills in creativity and data.
This is the second major merger between a creative and digital agency at WPP since Read took over in September. Later that month, the holding company merged another century-old creative agency, Young & Rubicam, with digital agency VML to launch VMLY&R.
“It’s a crucible, in that they’re melting things down to rebuild and remold a new approach,” Pattisal said. “But there’s more to do. The integration of creativity, data and media is something WPP should be looking at.”