By Michael Bürgi and Ronan Shields • July 18, 2024 •
Ivy Liu
The latest C-suite shuffle within WPP’s media agency arm, GroupM, comes at the very top of the organization, as Brian Lesser returns to the company as global CEO this September. Lesser will replace Christian Juhl, who led GroupM for the last five years, ascending to that spot four years after GroupM acquired digital agency Essence in 2015.
A quick survey of former WPP and GroupM executives, some of whom worked with Lesser in his prior GroupM stint when he was CEO of GroupM North America from 2015-17, indicate that he is a strong candidate to raise the visibility and chops of GroupM’s technology, including Choreograph, the media agency network’s data and tech team that operates as part of WPP’s Open platform.
“Brian is an excellent hire from the Sorrell era ironically,” said one former WPP executive who spoke on condition of anonymity. The Sorrell (Sir Martin Sorrell was longtime CEO and chair of WPP) era, as the exec put it, is defined by numerous acquisitions across the agency and ad-tech spectrum, which contributed greatly to WPP’s dominance of the holding company world over the first two decades of the 2000s.
“Lesser is very well-positioned to improve the business’ situation given his internal knowledge and external experiences,” said media analyst Brian Wieser, who formerly headed business intelligence for GroupM.
But the job Lesser takes over from Juhl is no easy task. GroupM has lost more clients than it’s won, according to Jay Pattisall, vp and lead agency analyst at Forrester. He cites global losses including Shell, partial loss of Pfizer and most of Uber (except APAC), and North American losses of Uber, Walgreens, L’Oréal and General Mills. Requests to speak with both Lesser and Juhl were declined.
A representative with GroupM pushed back on Pattisall’s characterization of more losses than wins, saying it’s more about pitches not won, and noting that GroupM had one of the industry’s best records for retention last year. The rep also pointed out that most of what the network retains or wins is not covered or disclosed via PR.
Still, challenges abound. “GroupM’s business development efforts have been an acute challenge during a tumultuous 2023 and first half 2024 in which the company experienced account losses. Some of this can be attributed to reduced spending by tech companies — and all agencies experience period of contraction,” said Pattisall. “But GroupM’s new business losses are even more challenging in that the company has not been successful in replacing revenue with new wins.”
Wieser compared GroupM’s revenue track to Publicis in his most recent Madison and Wall newsletter, pointing out that “In terms of net revenue, GroupM had approximately $5.7 billion last year vs. Publicis Media’s $4.9 billion. If current trends persist, the gap between the two might only be around 10% of size by the end of this year. As recently as 2015, GroupM was twice the size of Publicis Media on our estimates.”
Pattisall cites a number of areas Lesser is going to have to master — or put the right people in place to guide. “Lesser’s challenge will be extending and completing the tech vision while also delivering the brilliant basics of servicing and delivering media management,” said Pattisall. “GroupM and most large holding company media businesses and their employees must contend with the fallout of Covid, the mass resignation, quiet quitting and, now, automation. Fundamental to this must be robust training and upskilling, so that today’s talent can work side-by-side with tomorrow’s technology. The legacy of this generation of advertising executive is to reinvent the model for the next generation. At GroupM, that sits with Lesser now.”
Lesson in Lesser’s history
It’s not a stretch to characterize Lesser’s return to GroupM as a ‘homecoming’ given that he is something of a scion of the advertising industry, given his first reported forays to Madison Avenue predated the formal commencement of his career.
His first tenure within the WPP fold dates back to when the holding company purchased 24/7 Media in 2007. Following the $650 million purchase, the unit eventually morphed into Xaxis, where Lesser would take the reins as CEO of WPP’s programmatic operation in 2011.
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Lesser in many ways embodies the rise of ad-tech as when such technologies emerged from fringe-case investments to long-term strategic bets for many in the media sector. Indeed, he was a vocal advocate of Xaxis’ model of undisclosed margins – some would argue murky – of that time, claiming such tactics were necessary given the investment requirements of the time.
Lesser then was instrumental in the development of AppNexus, where he was a board director given WPP’s investment in the independent ad tech darling. After taking the reins as GroupM CEO, North America, Lesser joined AT&T in 2017, with sources claiming he was central to the telco’s 2018 purchase of AppNexus for $1.6 billion. This unit would later reemerge as Xandr, with Lesser as its initial CEO, and pitching it as an alternative to Big Tech operations such as Facebook and Google.
But his time there came to an abrupt end in early 2020 as the advertising ambitions of Xandr appeared at odds with the privacy concerns of the emerging leadership at the telco amid other political problems, such as opposition to its merger with Timer Warner.
Today’s challenges and opportunities
And now he’s back to take on the largest global media agency network whose growth has slowed considerably — although a GroupM representative pointed to consistent growth. “We’ve grown consistently year over year for the last five years, by around 25% cumulatively since 2019.” The rep also notes that later today, COMvergence is releasing its 2023 billings numbers “that show GroupM continues to significantly dominate the global media marketplace.”
Still, it’s the technology and data science side of the media agency business that GroupM must continue to hone, said Pattisall. “The technology strategy of media agencies has become fundamental to their success. [The] move to bring back Lesser … is a strong move to bolster GroupM Nexus and help create needed interoperability with WPP Open.”
Pattisall cited the recent hire of Flywheel Digital’s Sandy Welch to lead platform commerce initiatives and partnerships as evidence of “the WPP commitment to its tech strategy inside GroupM is serious.”
Meantime, Juhl wraps up a five-year plan to overhaul GroupM, handing the baton of tech stack improvement to Lesser. Pattisall credits Juhl with laying “the foundations by creating GroupM Nexus off the back of Xaxis and Choreograph and restructuring the GroupM media agencies.”
Having kept a very low profile internally and externally over the course of his GroupM tenure — “He was very sequestered,” said one ex GroupM exec, who spoke on the condition of anonymity. Juhl now now moves upstairs to a corporate development role, not dissimilar to other executives whose agencies or ad-tech firms were acquired. But the expectation from many of the observers who spoke with Digiday is that this position is the pathway to a graceful exit from WPP in due time.
https://digiday.com/?p=550342
