‘Big’ move for WPP as part of turnaround

Embattled advertising group WPP AUNZ has launched a new company to help combat a financially tough year.

Chief strategy officer at ad agency WPP AUNZ Rose Herceg. Picture: Jane Dempster

Embattled advertising group WPP AUNZ has launched a new company to help combat a financially tough year that culminated in an annual loss of $227.5m.

The launch of Big, a company led by two WPP industrial designers who create product prototypes and then sell the IP to clients, comes two weeks after the advertising group’s new boss, Jens Monsees, delivered his refreshed company strategy.

WPP AUNZ chief strategy ­officer Rose Herceg said Big is at the forefront of the company’s new strategy that seeks to simplify the operations of Australia’s largest advertising group.

“It’s a brand new enterprise in the sense that it’s got a brand new business model, and the services that these guys are selling come off the back of their existing track record,” Ms Herceg said. “It’s a different way of working because it’s not a traditional marketing business. It’s a design thinking, engineering business for us,” she said.

Ms Herceg said Big would use the vast amounts of Australian and New Zealand consumer data WPP has collected to create “new products, new services and new tech” that clients can make some money out of, including tech solutions and off-the-shelf products.

She said there were no planned staff cuts to create the new “enterprise” after WPP’s majority owner, UK ad giant WPP PLC, axed 3500 jobs to be more competitive with technology giants such as Google and Facebook.

Head of industrial design Clara Klaassen said the data-based solutions and a new business model would allow Big’s team to work “lean and quickly”.

“We’re not just building off hunches,” she said. “There is data that refines the opportunity, to make sure that we are not in a space that isn’t too crowded to begin with.”

Ms Klaassen will be a permanent staff member of Big, along with chief creative officer Giles Day. Both were formerly team members of one of WPPs 60 brands, Landor.

Mr Day said as a product designer, the most satisfying part of the job was to “make stuff”.

“It occurs to us that there is a lot of innovation being done but it’s all from a marketing research background,” he said. “And that’s great, but we do it more from a design thinking, making, iterating, prototyping approach.”

WPP’s annual net loss widened to $227.5m in 2019 because of an impairment expense of $241.2m and drop in revenue. That compares with a net loss of $17.1m in 2018, which included an impairment expense of $66.3m.

Underlying earnings from continuing operations dropped 8.7 per cent to $91.8m, with net sales down 2.6 per cent to $712.5m.