As has been strongly rumoured, it’s been confirmed this week that WPP is buying a majority stake in Essence Digital, described by the company themselves as a leading global digital agency and the world’s biggest independent buyer of digital media. Essence will continue to operate as a separate entity as part of WPP’s GroupM, gaining access to that agency’s vast reach and infrastructure as a result. No figure has been put on the deal just yet, though presumably it’s substantial. This is WPP we’re talking about here after all.
Rob Norman (Group M chief digital officer)
Essence was founded in London in 2005 and employs over 500 people around the world. It buys more than $700m of digital media annually and deploys campaigns in more than 70 markets. The agency blends data science, objective media, and captivating experiences to build valuable connections between brands and consumers. Current clients in Essence's rapidly diversifying client base include Financial Times, Google, HP, Viber and Tesco Mobile. While continuing to compete for business independently, Essence will also collaborate with GroupM's agencies (such as Mindshare, MEC, MediaCom, and Maxus) on specific assignments. Essence's Global CEO Christian Juhl will join the executive committee within GroupM reporting into Chief Digital Officer Rob Norman.
WPP is buying a majority stake in Essence Digital, described by the company themselves as the world’s biggest independent buyer of digital media
This acquisition continues WPP's recent trend of investing in fast growth markets, new media and digital, including data and the application of technology. WPP digital revenues were a rather hefty $6.9 billion in 2014, representing 36% of a total revenue of $19 billion. The company wants 40-45% of revenue to be derived from digital in the next five years, which the stake in Essence should help along significantly.
Christian Juhl (Essence CEO)
Juhl said: “Essence has a proud history of using technology, data and transparent media buying to advance the digital advertising industry. We're proud to work with some of the world's most advanced clients, running global campaigns across more than 70 markets. In GroupM, we have found a partner who shares our vision and augments our capabilities with global scale, access to media that isn't yet digital and the global partnerships and platforms to further advance our agenda.” Norman added: “The addition of Essence to GroupM represents significant expansion of our digital expertise, particularly with the Google technology stack. This is consistent with GroupM's overall policy of a technology agnostic approach. We're delighted to welcome and begin collaborating with the talented colleagues that come with WPP's strategic investment in Essence.”
There is speculation that this deal could dramatically strengthen WPP’s relationship with Google, given that the company is Essence’s largest client
There is speculation that this deal could dramatically strengthen WPP’s relationship with Google, given that the company is Essence’s largest client. The shop also brings a transparent buying model into GroupM (Essence is built on such a model, and touts a custom planning and campaign management system called Olive that supports most of the global digital media buying for Google), which is perhaps best known for a very different model. For Essence, meanwhile, the deal means an extension of its global network and a push toward a more diverse client base. So a classic win-win situation then? That remains to be seen.