The Guardian is giving us the news that Moody is downgrading WPP (at https://www.theguardian.com/business/2018/apr/17/moodys-downgrades-wpp-martin-sorrell-departure-ratings-agency-negative). It is a weird situation! You see, some do not like Sir Martin Sorrell (I personally never knew him), some like the man and some think he was a visionary. I think I would fall in the third category. There is no way that under normal situations the departure of a CEO, even a founder would have had such a massive impact when he left and let’s be clear when a departure sparks not just the downgrade of WPP, but we also see “WPP has hired a New York-based recruitment firm as it begins the global search to replace founder and chief executive“, his impact has been a hell of a lot larger than anyone is willing to admit. There are however other parts. When I see “In Moody’s view, the high-profile departure of Sir Martin Sorrell raises concerns over the future strategy and shape of the group, increases client-retention risk and could hence hinder WPP’s ability to meet its 2018 guidance“, I feel a strong desire to disagree. When we consider that within WPP is Millward Brown, TNS and IMRB, we need to acknowledge that WPP already had problems. You see, I was a partial witness to the laziness and stupidity, I saw how executives looked at presentations, were unwilling to listen and it was their right to do so, but in the end part of their market got screwed over. You see SPSS was the big analytic and as a program it is still the Bentley for analysing data. Yet beyond the program the corporation faltered. It fell to meetings, and presented concepts, yet no delivery. I still have the presentations, 1994 parallel processing, never came to be. Yet the biggest bungle was seen in 1997, when SPSS acquired Danish software company In2itive Technologies Corp. They had actual perfect software. The interface was intuitive and flawless. I was so looking forward to teaching people this software and for a while did. It was amazing to see dozens of people literally making a running start in their own designs in an hour, by the end of the day they did all kinds of things that most market researchers could not conceive. It was a jackpot acquisition. Yet SPSS had its own Data entry solution called Data Entry and apart from a few flaws it had regarding memory and larger data entry sheets, it worked really well, it was a work horse, so internally we were so happy to hear that it had become a Windows program. The backlash was Titanic in proportions. It was hard to work, the initial versions weren’t even stable, there was processing power issues, saving issues and a whole range of issues that were not solved, not even within the first year. It was all about the holy ‘Data Entry‘ and whilst the issue of the perfect In2itive was set to the sides and whilst the internal corporate marketing decided that Data entry was a ‘Form Design Program‘, the audience was left without quality Data Entry. So as I (and others) pleaded for In2Form and its suite to be evolved and set towards the users, we were told it was merely a 16 bit program, and SPSS is 32 bit and larger only (mainframes excluded). So there I was watching the mess evolve for well over 3 years whilst the redesign of a 32-bit In2itive suite would have been done in 160 days (rough estimate), no, at SPSS they really knew what they were doing. So they decided to up the ante, there was going to be a server edition of Data entry, the SPSS Data Entry Enterprise Server. I saw how the confidence of users went down further and further. Yet, the corporation did not sit still in all this and we got to see the Dimensions 2000 part, now that blew us away, we saw software on a whole new level and it was amazing. The 2 programs mrPaper, mrInterview, both truly steps forward, options to format webpages using XML so that the web interview could flawlessly fit in any corporate website. We saw the good days come back and with mrPaper we saw paper interviews with options to link to Readsoft’s scan software, so that data entry was almost a thing of the past, scan the returned interviews and reading the data with a scanner. It was not flawless, but it was really good to see a stage where government sites all over Europe could do quality interviews on many levels. Yet the program had issue as any large program had and there were more issues and they stacked up. Only then was I introduced to Surveycraft. It was an utter shock. Even as it was old, DOS based and looking like the old Data Entry, Surveycraft was miles ahead of mrDimensions. It had working quota’s it had all kinds of options that were ahead of the Quancept software in the UK, it was a shock to be a decade ahead and finding the old software visionary. SPSS had acquired it, and after that the developers managed to get less than 60% of the functionality transferred. Even later when I worked actively with it, I was finding issues that the new software never had, or it worked really badly. So when i tried to emphasize the need for new software to be made as i was no longer part of SPSS, the need for better software was essential, especially in Market Research. They decided not to listen and to believe the SPSS executives that better versions were coming soon, they never came! The entire market research industry was lucky, because other players like Tableau and Q Research software were just like me; they never trusted the SPSS executives and they now corner the market. In this the market research agencies that had the option to push forward decided to wait and basically cut themselves in the fingers and lost on two fronts. With the 2008 crash the markets changed and they lost loads of customers who had to massively trim down, it was a mere effect of events. Yet Tableau and Q-Software were still in a small stage, yet their software was for a much larger audience, so not only did the market research Industry lose customers, the two software programs allowed for mid and larger ranged corporations do it all themselves and that is what happened. Market research companies still get the larger projects, but they lost the smaller stuff, a group of revenue representing near 60% (a personal speculation) and as Tableau and Q-Software grows, the mr market is in more and more peril that is where WPP owning Millward Brown, TNS and IMRB finds itself. It takes a visionary to not merely grow the market, but to spread the options of a market. That ship has now sailed and beyond less than a dozen former SPSS people I worked with, I have merely seen a lack of vision. Some of these market research agencies are now all about ‘telling a story‘, setting the presentation that can in most cases be done with SAP Dashboards and a karaoke system. In this the only part that is still tacky is that when we want to buy the SAP solution (approximately $500) we get to see “Please contact your local SAP account executive for more information on how to buy and implement SAP BusinessObjects Dashboards“, was adding a price that much of a reach?
So as we see the pressures of one branch, we need to see that the overlap is large, even as some are in different territories we know that they are intertwined. Yet this market is also as incestuous as it gets. Lightspeed Research acquires part of Forrester (the Forrester’s Ultimate Consumer Panel business), Forrester is growing in different directions and they are all connected to some degree. There is every chance that the higher echelons will have worked in any combination of SPSS, Forrester, Lightspeed, SPSSmr and ConfirmIT. Likely they already worked in 3 of the five players. Yet the visionary growth has remained absent to a larger degree and digital media is all about evolution and implementing new technologies and new solutions to drive consumer engagement, because the future here is consumer engagement, that alone will get you the data to work with and to set the needs of the industry.
That is the part SPSS as a company ignored and now that we see the shifts, especially in WPP, we see that both Tableau and Q-software have a massive opportunity to grow their market segment even further. The moment they or a third player comes with consumer engagement software, at that point IBM will also feel the pinch, even as it hides behind Watson, options like IBM Statistics (formerly SPSS) and IBM Miner (formerly Clementine, SPSS Data Miner), they get to realise that these two programs also brought new business as the consultants were able to see the needs of the larger customers. When that diminishes, IBM will feel the loss of a lack of visionaries in a very real way. A loss only accelerated by the impacts on WPP and all its subsidiaries. This last part is speculative, but supported with data. As we saw ‘Paul Heath resigns was Ogilvy worldwide chief growth officer and non-executive director of AUNZ‘, we need to realise that the larger insightful players will be seeing more changes. Ogilvy & Mather might be merely the first one, but these people all realise that changes will be different and market shares will change, not all in favour of WPP. We can see “Heath is resigning all his titles at WPP worldwide to return to Brazil to start a new streaming tech venture“, we can read this as a positive: ‘he is going to try something new‘. Or negatively ‘he knows who is on his level at WPP‘ and he has decided that he can grow a nice personal global market share by setting his view on the new player with a promising option for mucho growth. I believe that he is setting his view to become the larger player himself. This is good news as it optionally invigorates the market research market which WPP desperately needs, yet WPP is a lot more than merely market research. It is digital advertising, a field that SPSS (read: IBM) ignored until it was too late, yet when we see some of the services: Branding & identity, Consumer insights, Design, Digital Marketing, Market research, Media planning and buying, Public relations, Relationship marketing’ all valid groups yet there is a lack of options for consumer engagement and several of the other groups are options that many offer, some in niches, some only to midrange players, but effective due to expertise. That should have been a massive red flag and reasons for alarms at WPP, yet not too much was seen there. In all a situation that does not merely warrants the downgrade by Moody’s, the fact that it was averted whilst Sir Martin Sorrell was there as CEO is an actual much larger issue then most identified.
So the problem is not merely who can replace him, but who can alter the course of failed objectives will soon become a much larger issue for WPP, which optionally pushes down the market value by a mere 5%, which considering the 2017 revenue of £15.265 billion becomes an interesting amount.