They should have done it sooner - but will it really work? UK PR leaders react to WPP mega-merger

WPP's decision to merge Burson-Marsteller and Cohn & Wolfe into what becomes the world's third-largest PR firm has received mixed reactions from UK-based industry leaders.

The merger of the two into Burson Cohn & Wolfe is effective immediately, WPP announced yesterday.

The new firm has more than 4,000 staff across 42 countries, and is led by ex-Cohn & Wolfe boss Donna Imperato as CEO, while senior Burson figures take the president and chair roles.

Announcements are expected in the coming days and weeks on regional leadership and local arrangements, with no senior departures expected.

As such, it is not yet clear what will happen to the firm's top London executives: Burson-Marsteller's new internal hires for 2017 of Stephen Day as UK CEO and Ramiro Prudencio as EMEA CEO, and Scott Wilson, who has been Cohn & Wolfe UK CEO for eight years and is now also EMEA MD.

The news follows several WPP quarterly results announcements in which Cohn & Wolfe was heralded as the PR division's top performer, while Burson, which is believed to have been struggling, has rarely earned any mention. The news runs alongside the ongoing reorganisation of WPP's Ogilvy.

PRWeek UK asked six industry leaders for their take on the news.

They should have done it sooner

Colin Byrne, EMEA CEO of Weber Shandwick until end of March 2018

"My view is it is way overdue. I have been questioning why WPP needed three fairly generalist PR brands, the biggest two of which are underperforming globally. Frankly, given the last few years, they should have made this move sooner. Having been part of a big brand merger [of Weber, Shandwick and BSMG], I know their challenges are only just beginning. The other challenge is strengthening H+K in its home US market."

WPP has too many PR brands

Tony Langham, CEO of Lansons

"It’s a sign of the times following Ogilvy’s consolidation under one brand last year – and it’s unlikely to be the end of the consolidation of brands by the big holding companies. In a time when margins are under pressure, merging brands and cutting costs is a logical response.

"The question is whether it adds anything to clients? In terms of scale, the merged business is closer in size to Edelman and Weber and that counts for something. The really exciting change would come from merging Finsbury into the new company and integrating WPP’s best in class across the full suite of global reputation management services.

"It’s a big warning sign for owners of independent agencies hoping to make their fortune through the sale of their brand. WPP, the traditional fallback, is effectively saying that it may not need anymore 'PR brands' as it has too many already."

Hard work ahead

Alison Clarke, former UK CEO of Grayling and now an adviser and PRWeek columnist

"This isn’t a surprising move given the fortunes of the two brands in recent years, with C&W going from strength to strength and BM being somewhat more recessive. The value proposition on paper makes good sense with complementary practice areas and skills. The real challenge will be making it work in a meaningful way. Ensuring the talent pool is motivated and the client relationships are protected should be the primary focus and beyond that, the more thorny issue of geographical overlap and consolidation of support services to deliver improved margins. That’s when the hard work really begins."

Not the last mega-merger

Giles Fraser, co-founder of Brands2Life - before which he worked for fellow WPP firm H+K

This can’t be the last of the PR agency mega-mergers. They have been the norm in other areas of business services for years. The question is whether they are the best response to a market where clients want both access to the widest range of services and a high level of agility, all at the lowest possible cost. It makes for an environment where the independents and specialists should thrive even more.

Consolidation is not innovation

Alan VanderMolen, international president at WE - formerly of Edelman/DJE Holdings and Burson

"I think it’s very important to realise consolidation is not innovation. What the industry needs to return to robust growth across the board is client- and colleague-driven innovation that reflects the realities of the modern media ecosystem. Slamming a fast-growing, mid-sized agency together with a giant stuck in neutral, does not solve anything for clients or for PR professionals, it simply satisfies a short-term need for shareholders."

Culture is key

Our final thought comes from a network agency CEO who asked to remain anonymous

"Bigger is better as far as global agencies are concerned, so I can completely understand the financial logic, and the logic of Burson not having had a strong consumer and brand offer, and Cohn & Wolfe not having had a big corporate and crisis offer.

"But the big question for me is how the cultures fit together - these are two quite different cultures - and how the senior Burson people feel with Donna being the boss; the big hurdle is culture and it is going to be very interesting to see if they can pull it off successfully."

Read more reaction to the merger from PRWeek US here

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