IPG and WPP post their Q1 Results
May 4, 2022
IPG and WPP both posted their Q1 results last week. You wouldn’t normally associate either group with SME clients, but interestingly the topic cropped up in the earnings call for each. Here are a couple of extracts from those calls. Is it the fast-growing, scale-up cohort that both groups are eyeing up? It’s an interesting addition if that’s the case.
During its Q&A, WPP was asked whether its new Everymile service could bring in a smaller type of client. It replied that it viewed Everymile as an offer that would be “both attractive, on a selective basis to large scale FMCG companies in particular markets ……. but equally attractive to SMEs who do not currently have the infrastructure to be able to provide an end-to-end solution themselves.” It then continued: “ …… we tend to over index on the large corporates and under index on SMEs, so we do think there’s actually quite an interesting opportunity to start to get into that side of the market in a way that perhaps we haven’t been historically.”
The SME conversation also figured in IPG’s Q&A where an analyst mentioned sensing more talk about developing solutions to reach small and mid-sized businesses and asked whether IPG planned to therefore grow its client base.
The response was a clear yes: “It’s definitely a place I would like to see us go. I think it is factored into the planning and the thinking around here, because the client universe that has been able to work with us has been significant, but ultimately, you reach limits. If and as we build more services that have a technology layer or component, capabilities that you can, in essence, plug in off the shelf, whether that’s dashboards, whether that’s IP that you can licence from us so that you can then do a certain kind of analytic or segmentation work or put data to work in midsize businesses ……….. that’s definitely a place we want to go. I don’t know that I can tell you that we’ve sussed that out to the point where it’ll go from our current 5000 clients to two or three times that ……. it’s too early to put that out there. But the way these capabilities are delivered does mean that we can think about an addressable market and a middle market of clients with whom we can engage.”
And it’s not the only big ecommerce news of this kind in our sector in recent weeks. Stagwell made a significant investment on 21st April when it acquired Brand New Galaxy, a 600-person strong global business that describes itself as “a leading provider of scaled commerce and marketplace solutions for 150+ global brands and 500+ e-retailers worldwide,” which will sit within the Stagwell Media Network to “add deep, digital-first specialization in connected commerce solutions, scaling Stagwell’s broad e-commerce capabilities to service more complex global clients.