WPP’s Chairman Known for Shaking Up Ad World

He admits he doesn’t know much about advertising, but that hasn’t stopped Martin S. Sorrell from trying to build the world’s largest ad agency. Twice.

The 44-year-old Briton went after his goal the first time as principal architect of the acquisition drive of British ad agency Saatchi & Saatchi PLC. Now, as chairman of Britain’s WPP Group, he’s chasing it a second time with a $725-million takeover bid for Ogilvy Group, which could make WPP even larger than Saatchi.

Quiet and diminutive, Sorrell has shaken up the ad world in other ways. Two years ago, he completed the industry’s first hostile takeover, against JWT Group, parent of the J. Walter Thompson Co.

Unlike Colleagues

Since then, defying some predictions, he has succeeding in hanging on to most of the agency’s talent and has begun turning around an organization that had been considered one of the worst run in the business. WPP Group’s earnings grew to $38.1 million last year, in large part because of improved earnings at Thompson and its Hill & Knowlton public relations subsidiary.

All this from a financial man who has admitted that his knowledge of the business is “limited.”

Sorrell is unlike many of his ad world colleagues in other ways. In an industry of flamboyant personalities, this son of a north London retailer is famously subdued. He doesn’t smoke, drinks mineral water instead of alcohol and has become one of the business’s most celebrated homebodies.

His successes have won him a certain respect in England, a country that holds its growing corps of successful ad executives in high regard.

“What he knows is numbers, and values,” says Eugene Beard, executive vice president of the Interpublic advertising conglomerate, and a personal friend of Sorrell. “And he knows he wants to expand his empire.”

‘The Third Saatchi’

Sorrell, who couldn’t be reached for comment, has said that he may have picked up his desire to grow from the entrepreneurs who have been his bosses. After graduating from Cambridge and Harvard Business School, he worked for Mark H. McCormack, the founder of a sports promotion empire, and James Gulliver, head of the Argyll Group retailing conglomerate.

In 1977, he took a top post with Maurice and Charles Saatchi, where he was sometimes referred to as “the third Saatchi.” Indeed, some in the industry have wondered whether Saatchi would have seen earnings fall off as they have had Sorrell not left in October, 1986.

“It hasn’t been the same company without him,” said a Wall Street analyst who asked to remain unidentified.

After leaving the Saatchis, Sorrell and a partner gained control of a small Kent manufacturer of supermarket carts called Wire & Plastic Products. They began moving toward their goal of forging a global marketing empire by acquiring 15 small non-advertising companies in its first 18 months.

But the hostile bid for JWT was Sorrell’s big move. Common industry wisdom held that hostile takeovers wouldn’t work in the ad world, because the agency’s talent could quit, leaving the agency with little value.

Wants Burger King Back

The industry was thus stunned by Sorrell’s $566-million deal for Thompson, which was the sixth-largest agency. After the takeover, Sorrell quickly put in tough financial controls to restrain the agency’s runaway costs.

He brought back Burton J. Manning, a former head of the U.S. agency, to run JWT. While Thompson lost a long list of important clients right after the takeover--including Burger King and Ford Europe--it gained others.

The agency will soon compete to try to win back the Burger King account.

If the situation at Thompson was manageable, there was a different story at JWT’s Lord, Geller, Federico, Einstein Inc. subsidiary.

In March, 1988, six top Lord Geller executives, disaffected with the WPP management, walked out to form their own agency. Sorrell created a cause celebre on Madison Avenue by suing them for trying to take clients with them and destroy the agency as they left.

Some in the industry believe this yet-unresolved suit was a major blunder by Sorrell that has continued to hurt the agency’s image. “He could have sat down and talked with us, but he took us for granted,” said Richard Lord, the leader of the group. “It was all totally unnecessary.”