Burson’s potential sale isn’t about the future of PR — it’s about WPP’s

Welcome to the PRmoment podcast and on the show today we’re chatting to Jim Donaldson about the news that WPP might sell Burson.

Previously, Jim was CEO UK and Middle East at Fleishman and held senior roles at both Weber Shandwick and Hill & Knowlton. He is now a non-exec to a raft of independent PR firms including Woodrow, Schon&Co and Matlin PR.

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At PRmoment we usually let these industry navel gazing moments go, as most of the time, the news has been widely covered elsewhere but I’ve found the level of paranoid PR commentary linking PR's future to the Burson deal pretty nauseating.

I get the need for self appointed PR thought leaders to feed the algorithms, but much of the analysis of this potential deal seems ill-informed.

PRmoment founder Ben Smith put this alternative scenario to ex WPP and Omnicom executive Jim Donaldson about the reasons behind WPP’s plans to sell Burson:

1. WPP needs to grow.
2. It still has quite a bit of debt (total net debt £2.17 billion) and its revenue has decreased in recent years. Sources: https://www.spglobal.com/ratings/en/regulatory/article/-/view/type/HTML/id/3530066 and https://www.fidelity.co.uk/factsheet-data/factsheet/JE00B8KF9B49-wpp-plc/financials
3. Circa 84% of WWP's revenue comes from ad agencies, which it now calls its Global Integrated Agencies. PR is 9%. (including Ogilvy PR and Burson.) https://markets.ft.com/data/announce/detail?dockey=1323-17477290-1Q8TEVR2NNFQVT91FOUCPOQ2BF
4. Ad agencies' market has been decimated by the social media owners and they are petrified about what AI is likely to do to their business models.
5. None of the WPP board have any PR experience, and frankly, they've got bigger problems right now. https://www.wpp.com/en/about/our-leadership/the-wpp-board
6. Burson is a potentially salable asset and WPP can then use those funds to invest in the renewal of its main source of revenue - advertsing agencies.

Here’s a summary of what Jim Donaldson and PRmoment founder Ben Smith discussed:

• Does Jim agree with our alternative hypothesis to the reasons WPP might sell Burson?
• Jim identifies the "huge market shifts" impacting the marketing holding groups currently.
• Was WPP always a reluctant PR firm owner? Many of the deals where Sorrell acquired a PR firm, included a larger ad agency and the PR firm was a much smaller part of the deal.
• How salable is Burson as an asset? Does it have growing or declining revenues?
• Jim describes the holding groups as “a side show” to the most important, mainly positive trends happening in PR at the moment.