Advertising goliath WPP has been thrown into chaos after Sir Martin Sorrell’s acrimonious exit after more than three decades in charge.
The 73-year-old advertising king abruptly quit late on Saturday night after growing “fed up and p….. off” during an investigation into alleged misconduct, sources close to Sir Martin said.
His departure leaves one of the UK’s biggest companies facing serious questions about its future as it is forced to begin the hunt for a new chief executive.
Industry sources said WPP’s sprawling empire faced the prospect of being broken up without Sir Martin at the helm. The group is made up of 400 companies.
One senior figure described his downfall as “a moment in history”.
“It wasn’t a boardroom battle but the way they behaved in his eyes, the manner they handled the investigation, in the end he thought ‘I’m 73 years old I don’t need this s…,” a friend told The Daily Telegraph.
Reacting to Sorrell departure at Adland, chief executive officer of X3M Ideas, Steve Babaeko said on his Facebook account in a piece titled “Sir Martin Sorrell:The former Landlord of Madison Avenue, “Tayo Ken Suleman, my former Executive Creative Director at Ogilvy Nigeria described Sir Martin Sorrell’s resignation as surreal.
According to Babaeko, that’s actually putting it mildly. It was shocking even though not totally unexpected in view of the fact that the WPP board had ordered an investigation into alleged financial impropriety.”
“Until his resignation, Sir Martin towered above the global advertising industry like a colossus. He bought a moribund wire and plastic company in the mid 80s and turned it into a global behemoth with over 200,000 employees in 112 countries. Arguably the most popular and highest paid advertising person alive, he won’t be remembered for any famous ad campaign that he wrote (He’s a finance expert not a Creative) His voracious appetite for take over and acquisitions will be recycled by generations of admen yet unborn,” he said.
In his conclusion, Babaeko aquipped, “what will be the fallout of Sir Martin’s exit? It’s hard to say but one thing is certain, Madison Avenue nay Adland will never be the same again. Goodbye Sir Marin”.
His resignation is being treated as a retirement, putting him in line for a payout of up to £20 million (NZ$30.8 million) in the next five years. Sorrell transformed a tiny wire basket manufacturer he acquired in the 80s into an international giant worth more than £20 billion.
“Finding someone who is a charisma machine with chief executives in the same way Martin is will be tough,” Claire Enders, founder of Enders Analysis, said. “There is no other Sir Martin Sorrell in the world.”
The longest serving chief executive of a FTSE 100 firm, his exit piles pressure on to a company that has seen its shares dive this year after being hammered by drops in advertising spend, as well as Google and Facebook’s increased dominance in “adland”.
Analysts at Berenberg warned before Sorrell quit that the slew of bad news was “unlikely to improve in the short term”. WPP’s biggest client Ford, which accounts for 4 per cent of revenues, is halfway through an agency review aimed at cutting costs. HSBC, Sky, Shell, Mars and Kimberly-Clark are also in the middle of reviews, it said.
Those in the industry expressed concern, arguing that if WPP doesn’t move quickly to reinvent itself it could be split up. The next boss needs to focus on serious and radical change, urged ad boss Johnny Hornby.
“It needs a complete reinvention. Martin could have handled that, but now that he’s gone that transformation still needs to [happen],” said Hornby, who runs London agency The&Partnership.
Hornby said it was time for WPP to restructure, sell off its research business and merge its creative and media agencies. “The industry is going through a phenomenal period of change,” he said.
Industry figures said the choice of executives Mark Read and Andrew Scott as joint interim chief operating officers was the right one. Read is seen as the favourite internal candidate to replace Sorrell permanently.
“But it may be that an external person is a sexier choice for the City,” Enders said. “Martin is a very, very big name.”
Sorrell has denied allegations of wrongdoing.