Codewords, secrecy and uncertainty: inside WPP’s shock VML merger

According to VML president Mel Edwards and global chief executive Jon Cook (formerly Wunderman Thompson and VMLY&R bosses, respectively), the merger plan was a secretive operation known only to a handful of executives.

Speaking to The Drum from VML’s New York office, where they’ve been sequestered for “weeks” planning the new company’s launch, Edwards and Cook say the shakeup – based on long-standing conversations within WPP about the future of its flagship agencies – finally got going in late summer.

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• Why newly merged VML could be greater than the sum of its parts

Secret operation

The circle of trust initially began with just three people: WPP boss Mark Read, Edwards and Cook. “You can only bring so many people in,” says the latter.

The scheme was so discreet that a codeword – ‘The big pitch’ – was used for meeting invites and Cook kept his personal assistant out of the loop.

“It wouldn’t be unusual for us to pitch together,” explains Cook. “And it’s commonplace for the brand you’re pitching for to be a secret.” Eventually, the team behind the merger would grow to around 20 WPP execs.

Concerned that leaks might spoil the company’s big surprise, they chose to announce the move before each network had decided upon working budgets for next year and a week before WPP’s third-quarter earnings release (scheduled for Thursday). Edwards says: “We thought: ‘How long can we keep this secret?’”

The merger announcement came as a shock to their 30,000+ colleagues across the world. Executives elsewhere in the organization tell The Drum of their surprise – and of continuing uncertainty over the future of their jobs.

Despite the cloak-and-dagger act, Edwards says the pair are now prioritizing transparency with staff. When the news broke on Tuesday, they spent hours speaking to staff scattered across offices worldwide in virtual ‘town hall’ meetings.

Those conversations will have sounded familiar to staff who were present when Wunderman Thompson and VMLY&R were themselves founded as a result of agency consolidation. “We’ve learned from those mergers about what we need to double down on and that is communication and communicating as often as possible to the network,” says Edwards, referring to the 2018 mergers of VML, Y&R, Wunderman and J Walter Thompson.

“It’s unsettling for some people, and change is scary. So, it’s up to us and the rest of the leaders across both companies to ensure that people are hearing from us on a regular basis. We’re telling people what’s going on, we're being transparent,” she argues.

Will the merger cause layoffs?

The pair acknowledge that whether the merger will spark job losses at the combined network is up in the air.

Edwards says: “We’ve got great people across both companies that are doing brilliant jobs [and] these are two companies that are in growth. Myself and Jon are still here, both here doing this job together. Does that mean that everyone, across every capability, a COO or a CSO, would be doing those exact jobs together? Maybe, maybe not.

“But if we’ve got excellent people, it’s up to me and Jon to figure out maybe a different role; maybe they could do something else. We haven’t got to that level yet.

“This is a company that is about focusing on growth. Coming together gives us depth and breadth of capability across our entire network. When I think about customer experience and e-commerce… we have different flavors of commerce at Wunderman versus VMLY&R’s commerce. There’s probably a sliver of overlap. The only thing this is going to do is make us stronger globally across that capability. It means going to be able to compete in a stronger way anywhere in the world.”

It’s unclear too how the new company will manage any client conflicts that might arise from the merger. Some clients, such as white goods manufacturer Beko, which recently chose Wunderman Thompson over VMLY&R in a pitch, will find themselves with an entirely new agency as rosters are collapsed into each other. Edwards says the chief marketing officers she’s spoken to are “excited” about the potential for a simpler service model – something clients have been demanding from agencies, according to a recent WFA survey.

“We’ve spoken to as many clients as we possibly can in the last 24 hours… the feedback has been: ‘This makes sense’.”

After our conversation, a spokesperson for VML tells The Drum: “Mel, Jon and our client leadership teams are speaking with each of our clients on the expanded capabilities and relationship specifics.”

While the formal merger is set to be complete by the new year, the business of amalgamating these two large organizations will likely take much longer. And in that time, uncertainty over whether “overlaps” between the two companies might lead to layoffs might push some staffers to begin looking for their next berth.

Cook says that while VML can offer new opportunities to existing staff, everyone will be expected to pull their weight.

“It’s about creating opportunities for people. The number one rule in the business of retention is about making a place that somebody wants to be. Not just in concept but in practicality and specificity,” he says.

“The job right now is making sure everyone has a role they love doing, a role they’re good at doing, and a role that is relevant to the company. We need to be three for three on everybody. That’s the goal. There’s no use in having somebody doing a job they’re not good at or is not needed.

“In any big company, there are people doing roles right now that they may not love. And there are people who can do more. I think we’re working through all that. It’ll be a fun chance to create opportunities for everybody to be three for three on that axis.”

Commercial efficiency is one of the key motivations behind the merger. Edwards says that WPP’s real estate footprint is one target for consolidation; she tells The Drum that Wunderman Thompson’s London staff will soon be moved from its purpose-built Watford HQ to the holding company’s flagship Sea Containers House offices on the banks of the Thames – or nearby to its Rose Court campus.

Other moves are likely but undecided. “That real estate, that’s a cost saving, and we haven’t done that [calculation] for all 150 offices. Those are the things we’ve got teams now working on, to see what efficiencies we can make across the business.”

Cook says other efficiencies can come from the administrative side – and from using common technology and organizational systems throughout the new firm. “Each company is a little complex… we can get a lot more efficient by being on common systems. We still need to make some big decisions on those,” he says. “It is still completely in its infancy,” adds Edwards.

Why ‘VML’ and not ‘Wunderman’?

Given the company has been merged from entities with over a century and a half of advertising heritage, the choice to use VML – founded in 1992 and arguably the name with the least brand equity in the quartet – is curious. Will Edwards, who has spent 12 years working for the Wunderman brand, miss the masthead?

“At Wunderman Thompson, when we would acquire a company, the founders would be very protective of the brand because it’s their company. But actually, it’s the people that make the brand, and it’s the people that make the company.

“It’s not the Wunderman Thompson team fitting into VML, we’re building it together. We’re building a new company together under the VML brand. We needed to simplify what we’re doing under a simple name and get behind that brand with a clear vision,” she says, adding that she’s delighted by being able to use a simpler email format.

Cook is also content to move along. “The brand equity of each of those four brands has got us to where we are right now. I don’t think either of us feel like the names of our companies are what gain us business. It’s all about people.

“Acquiring Y&R [in a deal worth $5.5bn in 2000] was real money, but I think WPP feels like they got every bit of that investment and more because that’s what got us to this place. At some point you weigh the balance of things needing to be simpler, and that there should be fewer, better agencies at WPP, and you have to make some choices.”

At least it’ll put a stop to the acronym gags, he concludes. “We’re both people who have come out of five years of name jokes… we’re ready to not have long names and ampersands.”

Ultimately, heritage and branding considerations proved secondary to commercial ambitions. As Cook puts it: “Growth is the thing.”