The Drum's New Year Honors: media and marketing's shock stories and best quotes of 2018

Shocks of the year included Sir Martin Sorrell's WPP exit and LadBible taking over Unilad

In the latest installment of our New Year Honors series, we relive some of the biggest shock stories of 2018, from Sorrell standing down to viral publishing’s 'Ladministration', and reflect on some of the year's best quotes.

Shocks

Comcast conquers Sky

In 2018, US media behemoth Comcast succeeded in an airborne invasion of the British Isles as it emerged victorious from a multi-sided bidding war for pay-TV company Sky.

For much of the last decade Britain’s biggest pay-TV provider has been at the center of the ambitions of media mogul Rupert Murdoch, with the tabloid magnate’s efforts to acquire a majority stake in the satellite network rebuffed multiple times by the government and competition regulators. Having founded the company in 1989 in a bid to diversify his media empire in the UK, Murdoch later attempted to wrest back control of it. But Murdoch’s designs for the network received a death-blow in 2018 from an unexpected corner as his own bid for a controlling stake was dwarfed by a bidding war between Disney and Comcast.

When Disney bought the bulk of Murdoch’s 21st Century Fox in a $53.4bn deal it also acquired the network’s stake in Sky and proceeded to press its interest in the matter. However, in a 24-hour special auction, the NBC-owner outbid the film giant valuing the firm at a cool $40bn.

After establishing a near-monopoly on the pay-TV scene in the UK in the 90s, Sky has built recent success upon a triumvirate of imported US shows, Premier League football and original programing. The latter has brought the network increased subscription revenues as well as critical acclaim which evaded many of the network’s commissioning efforts in the past.

Although television and entertainment are the network’s most visible assets, it also includes a sizable telco business as well as OTT service Now TV and gambling platform Sky Bets. Sky’s acquisition by Comcast looks like a smart move into a UK broadcast and telecommunications industry still dominated by monolithic players like the BBC and ITV but gradually fragmenting.

LadBible buys Unilad

Viral social publisher Unilad Group had long been pursued by ousted founder Alex Partridge. Nonetheless, few were expecting it to land in administration early in October.

Including brand partners who had just signed deals with the publisher, Unilad had accrued debts totaling over £10m split between Partridge (£5m), HMRC (£1.5m) and additional creditors. With the crack of a gavel the publisher – one of the biggest on Facebook – was taken to auction.

Almost immediately Manchester-based rival LadBible secured Partridge’s (£5m) debt, granting it control over the impending administration. This cast a shadow over the bidding process. Suitors were granted a single weekend to gather resources, strategies and partners in formation of a bid. Many buyers lacked key financial documents attesting to the profitability of the operation.

The Ladministration became a Lad War as several bidders questioned the veracity of the bidding framework adopted by the administrator.

Unilad’s 60 million followers, 1bn weekly reach and 4bn monthly video views across nine channels were all up for grabs – but bidders had a hard time putting a value on the empire or working out how the business’s performance could assuage its debts.

Unilad’s former managing director John Quinlan claimed the company was independently valued at between £40m and£50m before it entered administration. He stressed that it had just reached a new level of profitability before its legacy debt caught up with it.

The company was acquired by LadBible for an undisclosed fee above £10m, its bid boosted by the £5m credit.

The newly formed company had 20 million followers and in August boasted a combined 4.5bn views.

At the time, LadBible’s co-founder Solly Solomou said: “We’ve transformed the media landscape globally to make LadBible Group both the world’s largest social video publisher and a massive youth media brand. Uniting these two businesses under one roof enables us to reach more young people than any other media organization.”

Since the deal went through both brands have suffered performance issues according to social data from NewsWhip. They fell from the two most engaged titles on Facebook in September (and throughout much of the year) to LadBible hitting 13th and Unilad 17th.

Staff consolidation looked likely as the group looked for the best way to get the two publishers functioning in unity without stepping each others’ toes.

Co-founder Arian Kalantari announced: “We’re ensuring we’ve got the right people in the right places over the next couple of months. It’s a new era with exciting times and opportunities ahead.”

As we head into 2019, these plans are still being formed.

Sorrell resigns

The departure of Sir Martin Sorrell from WPP had been murmured amid discontent between shareholders and after years of thinly veiled outrage at his annual salary – however, no one could have predicted the manner in which he would be ousted.

And while he would eventually stand down from running WPP – a day many probably did not believe would actually come – he was not out of the industry for long, starting S4 Capital within months and going on to acquire MediaMonks and bidding against his former company to do so. Since then S4 has also acquired San Francisco advertising firm MightyHive.

The potential for the new venture, which he has described as ‘a coconut’, is unclear, but his appetite to continue cannot he questioned.

The next year will surely bring more surprises.

House of Fraser falls

It’s been a tough year for House of Fraser (HoF) and prospects for the year ahead aren’t much brighter. In June, the stalwart of the British high street revealed that it had entered into an insolvency process and would be taken over by C Banner, the owner of Hamley’s. That deal then fell when C Banner faced its own financial crisis.

On the brink of total collapse the chain fell into the hands of Mike Ashley, the controversial business figure at the helm of Sports Direct, who struck a £90m deal to acquire 59 of its stores.

The deal had ripple effects across the industry, with creditors battling to receive amounts owed before the transaction was made on 10 August, including £1.3m to Google, £90k to ad agency 18ft & Rising and £184k to search ad firm Merkle.

Under Ashley, HoF has seen its chairman leave swiftly followed by its chief executive. However, Ashley has pledged to save around 47 of the stores and turn the department chain into the ‘Harrods of the High Street’.

Antonio Lucio joins Facebook

Antonio Lucio had carved out a positive niche in the marketing world in his three years as HP’s chief marketing officer by championing an ongoing campaign highlighting the company’s diversity pledge along with its support of the ‘Free the Bid’ initiative.

Considering his efforts helped raise the company’s valuation over 50%, reframing the company’s message after HP split into separate B2B and B2C operations, it was a surprise to many when Lucio jumped to social giant Facebook.

He came to Mark Zuckerberg’s company at a time when it was still addressing the Cambridge Analytica scandal and is still under fire for election meddling issues around the globe. Still, if anyone can help turn around the profile of a company it may be Lucio.

Said Facebook chief product officer, Chris Cox, in a post announcing Lucio’s hire: “He has been outspoken on the need to build authentic global brands with integrity and from places of principle, and also on the importance of building diverse teams at every level in the organization.”

HP president and chief executive officer Dion Weisler praised Lucio for his time at the company and welcomed Vikrant Batra as his successor: “We are grateful to Antonio for his service to HP. With a brand that has never been stronger, it’s a testament to his leadership that we are prepared with the right team to continue to reinvent HP and drive shareholder value.”

Annette King joins Publicis

Disruption is afoot for all and it’s led to some major changes in the vanguard of the industry. Of the more shocking of these was Annette King leaving Ogilvy UK after 18 years to take on the role of chief exec of Publicis Groupe in the UK. King has now spent her 12 months of gardening leave and is working at the creative agency.

A new leadership team has been named under King, uniting her with former Ogilvy UK colleague Jo Coombs who will become chief operating officer alongside chief growth officer Anna Campbell and head of talent, Paula Cunnington. King has added additional positions to her bow in 2018, being named as chair of the Creative Industries Trade and Investment Board (CITIB), a new advisory group set up by the UK government.

Quotes

Whether it was explaining the internet to senators or defending a sexy TV station, 2018 threw up some memorable quotes.

"Senator, we sell ads"

2018 was the year Mark Zuckerberg swapped his gray t-shirt and jeans for a shirt and tie for a face-off on Capitol Hill about the implications of the Cambridge Analytica scandal, and the boss delivered the performance of a lifetime (potentially giving Bradley Cooper a run in the Oscar sweepstakes).

He somehow managed to avoid admitting that Facebook was monopoly (or a publisher), as well as refusing to commit to meaningful regulation and rebuffing politicians’ questions about the data breach that left as many as 87 million users exposed and potentially changed the course of the 2016 presidential election.

The media circus around Zuckerberg was more concerned with the ‘booster’ seat engineered to give him more height, his leaked scrawled prep notes and those memes about him being an Ex Machina-esque robot learning to live among humans more than it was about any of the accusations leveraged at his business.

The politicians in charge of interrogating the chief demonstrated ignorance about the basic tenets of the digital economy. Far from a grilling, the whole sorry affair only underscored the fact that Zuck’s inquisitors knew very little about the internet – you know, that thing that’s worth $966bn to the US economy.

The inanity came to a crescendo when Utah senator Orrin Hatch asked Zuckerberg how Facebook remains free. “Senator, we run ads,” smirked the exec.

‘Mark Zuckerberg outwits Congress,’ declared the Axios website.

"We're a sexy channel and we hire sexy people"

Paul Mortimer, head of digital at ITV, does not mince his words. At the 2018 Edinburgh International Television Festival – an annual gathering of controllers, producers and TV types from across the UK – he reveled in the success of the network’s summer smash Love Island, a reality TV dating show that dominated conversations on social for months and provided ITV2 with a precious vehicle to reach a sought after cohort of young viewers.

The show has attracted its fair share of criticism, however. As tanned and toned contestants competed for a £50,000 prize, feminist group Level Up campaigned for the network to stop serving ads for cosmetic surgery and diet supplements around the show. One contestant was accused of gaslighting another, while a national survey found 40% of female viewers said they felt worse about their bodies after watching the show.

Simon Stevens, chief executive of the NHS, publicly condemned the series and claimed the health service was “picking up the pieces” of a mental health crisis exacerbated by cosmetic surgery ads.

When pressed about these issues, Mortimer’s reply was swift and swaggering: “I think on the body image thing, we cast very attractive people, it’s a sexy show. We’re a sexy channel and we hire sexy people.”

His dismissal of campaigners’ worries about the show was backed up by ITV1 controller Kevin Lygo, who said “we might give a few old ladies heart attacks if we put it on [the network’s premier channel] ITV,” but the show “shuts up everyone who’s been saying that young people don’t watch TV”.

As Love Island boosted ITV’s catch-up service beyond the performance of rival BBC iPlayer for the first time ever, it certainly seemed that for the network, the ends justified the means.

“It’s a peanut... but maybe some people have peanut allergies”

It’s been a tumultuous year for Martin Sorrell, the founder of WPP, after he was removed from the holding company following an investigation into an allegation of misconduct.

In his first public interview since his shock departure, Sorrell told The Drum his new venture S4 Capital is a “peanut” compared to his mammoth competitors.

Having previously called Amazon a “big banana,” Sorrell demonstrated that despite the bad press, he was still as boisterous as ever and that nothing had dampened his outspoken nature.

The Drum's New Year Honors were first published in the January issue of The Drum magazine, which looks back at the year in marketing and advertising and mulls over some of the lessons learned in 2018. Buy your copy here.

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