LONDON • WPP, the world's biggest advertising company, headed into uncharted territory yesterday when it started life without its founder Martin Sorrell, whose departure has left it rudderless at a time of swirling industry change.
Mr Sorrell, the driving force behind 33 years of dealmaking and relentless expansion, stepped down on Saturday after the board investigated a claim of misconduct.
While WPP hunts for a new CEO, it has handed the helm to two executives, digital boss Mark Read and Andrew Scott, the chief operating officer of WPP Europe who oversaw acquisitions, making them joint chief operating officers.
The sudden departure of Mr Sorrell, the face of WPP, has sparked questions as to whether the holding group can remain in its current form of employing 200,000 people in more than 400 companies across 112 countries.
"Sorrell's departure is negative considering... how instrumental he has been in assembling the assets WPP has today," said Pivotal Research analyst Brian Wieser.
The 73-year-old's departure comes at a difficult time for the British company. Last month, it published its weakest results since the financial crisis as consumer goods groups such as Unilever and P&G cut spending and other customers jumped ship.
The industry is also battling the might of Google and Facebook, which dominate the online advertising market, and watching as consultants like Accenture move more aggressively into the sector.
The changing dynamics have meant the previous idea of building marketing groups to offer advertising, branding, planning and research on a global scale - championed by Mr Sorrell - is now under threat as clients want more nimble relationships in a digital age.
Many are starting to ask if they can do things differently - creating their own content to place directly on online platforms or working with smaller ad groups.
With so much change in the industry, some analysts have questioned whether the group should seek a new CEO from outside who could look at it dispassionately.
Names in the frame from the industry include Dentsu Aegis' Jerry Buhlmann, and Mr Adam Crozier who previously ran broadcaster ITV and Royal Mail.
From inside WPP, Mr Read, 51, is seen as the lead candidate.
While a refrain heard about WPP is that no one knows it like Mr Sorrell, Mr Read is the one man who comes close after he wrote to the WPP boss asking for a job in 1989.
Whoever replaces Mr Sorrell will face longer-term questions as to whether a group that was built in his mould should remain intact. Already executives are predicting that bits will be sold off in a move that could once again become a model for the wider industry.
Mr David Jones, the former CEO of WPP peer Havas and the founder of tech marketing group You and Mr Jones, predicted WPP would eventually end up missing Mr Sorrell more than he would WPP.
"It's the fall of an emperor and one that I think will not only take the empire down with him but will also have massive ramifications for that industry," he said.
REUTERS
