WPP Might Not Get 24/7; Consolation Prize Is Digital Street Cred

Ad agency holding company WPP is Google’s largest single customer, spending roughly $200 million last year on the internet company’s search advertising. That, as Adweek points out in a lengthy piece, means if Google completes its bid for DoubleClick, WPP will have a major competitor instead. Either way, WPP’s chief executive Martin Sorrell has been comparing his advertising business model to Google’s automated system and he seems to have found it lacking efficiency. To rectify that, Sorrell has cast his eye towards digital ad shop 24/7 Real Media and talks between the two have been going on for the past year. Aside from gaining efficiencies by adding 24/7 to its stable of creative agencies, WPP potentially could obtain access to the interactive company’s consumer data. (As we’ve noted in the case of Google and DoubleClick, the latter said it would not share such data with Google, though some privacy advocates want regulatory assurances to that.)

But an obstacle in the form of Microsoft may be complicating Sorrell’s plans. After losing out on DoubleClick, Microsoft reportedly has set its sights on 24/7. Adweek replays Sorrell’s past criticisms of News Corp.’s $580 million purchase of MySpace in 2005, — remember the “willy-nilly” strategy born of a “considerable degree of panic” — hinting he would avoid overpaying. For Microsoft’s part, Adweek cites unnamed industry sources who say WPP and its industry rivals have looked at 24/7’s $600 million price tag and blanched, while Microsoft would possibly be willing to go considerably higher than that. And so while the doubts have been cast on WPP’s emerging as the winning bidder in a contest with Microsoft over 24/7, there is a silver lining for Sorrell: he gets to communicate to industry observers that he has a serious digital strategy, even if it’s not entirely successful.

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