With the merger between ad holding company WPP and marketing research powerhouse Taylor Nelson Sofres nearing completion, it looks like the landscape of the Big Four may be due for a significant upheaval, with WPP now drawing within spitting distance of long-established leader Omincom. AdWeek's Steve McClellan reports:
Based on full-year 2007 revenue figures, the combined WPP-TNS total is $12.4 billion compared to $12.7 billion for Omnicom. Excluding TNS, WPP's revenue total in 2007 was about $10.5 billion.While $300 million is certainly still a significant gap in revenue, the bigger import of the deal is that WPP will now be drawing an even larger share of its revenue not from advertising, but from marketing services. The company currently draws in 46 percent of its revenue from advertising and 54 from marketing services -- once the TNS deal goes through, that will change to a 40-60 split.
WPP has to be happy right now, or as happy as any advertising and media company can be right now during these tough times. The TNS buy means that the company can further pivot away from depending on ad revenue. The fact that traditional WPP earners like the auto industry are collapsing in on themselves makes the TNS deal look even smarter.