The death of horizontality

WPP this week retired its Health & Wellness operating brand and will move the constituent parts into group agencies in the first half of 2019.

(Pic courtesy of Getty Images.)

WPP’s experiment in health horizontality proved to be short lived, as it announced this week it is disbanding WPP Health & Wellness and returning the component parts to various full-service marketing agencies in the group.

It’s a further sign that WPP’s new CEO Mark Read is moving away from his predecessor Martin Sorrell’s fascination with horizontality.

Elsewhere in marketing services holding company-land, Publicis is divesting its Health Solutions business, though it was unable to even call it by its correct name in the press release announcing this development, within its Q3 earnings statement, calling it Publicis Health Services instead.

It is retaining its Publicis Health division however, so it’s not a development on the same scale as the WPP decision.

The write-up Sorrell supplied last year on WPP Health & Wellness CEO Mike Hudnall for PRWeek and MM&M’s Health Influencer 50 list makes for very interesting retrospective reading.

He noted that, when WPP Health & Wellness launched in February 2017, it was "a particularly significant event." In fact, "it was the first time in our history that an operating company had carried the WPP brand." He added that Hudnall was chosen because he "understood the importance of ‘horizontality’ to WPP’s strategy."

The unit comprised of Ogilvy CommonHealth Worldwide, Sudler & Hennessey, ghg, and CMI/Compass and 10 WPP health teams to "ensure we deliver the best partnership in the industry for our healthcare clients, right across the length and breadth of WPP’s capabilities," said Sorrell.

The founder and CEO of the iconic marketing services holding company added that "using the WPP name to brand an operating company was not a decision taken lightly." "We expect to see the same scale of transformation that saw WPP morph from a wire basket manufacturer to the world’s largest communications services group," exhorted Sorrell.

However, even he didn’t seem totally convinced of the ambitious mission ahead as he ended the piece with the slightly ominous comment: "Not that we are putting any pressure on you, Mike."

As it turned out, the current WPP top brass felt there was no need to have additional layers of bureaucracy in the complex holding company operation. The process of bringing together such disparate elements in a cohesive mass proved to be as tricky as herding cats.

When WPP’s Read spoke to PRWeek sister brand Campaign’s global media editor Gideon Spanier in April, he emphasized that the holding company needed to concentrate more on clients and less on how it organizes itself internally.

"Perhaps horizontality was too much about bringing ourselves together, not about what is the right solution for the client," Read explained.

Presaging this week’s development with WPP Health & Wellness, Read added: "I do worry about putting in too many layers of management. We need to have structures where people can collaborate without having people sitting on top of them to help them to collaborate.

"North America is different in that respect and if we can simplify the group and have fewer moving parts, it’s easier for us to manage the ones we have and get them to collaborate more."

There is big change afoot across WPP and their holding company peers at Omnicom, Publicis, Havas, Interpublic Group, and Dentsu.

Their Q3 financial results were mixed, with PR generally holding its own when compared to the rest of the groups. WPP grew just 0.2% in Q3; PR and public affairs was up 2.5%.

Omnicom was up 2.9% organically in Q3 compared to 12 months ago, with PR slightly below this at 2.3%. Publicis was only up 1.3% in the same period, though it said that would have been 2.2% without Publicis Health Services (sic).

IPG was up 5.4% year over year on an organic revenue growth basis. Weber Shandwick CEO Andy Polansky attributed this to IPG’s "open architecture" structure, designed to give clients access to disciplines across its network.

Everyone is seeking more integration but going about it in different ways. But it seems the trend toward "horizontality" is no longer top of mind in these processes, especially at WPP.

As Sorrell might say: "No pressure Mark."

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