How the merger of PR's 'big guns' is a sign that size matters in marketing

There was big news as holding company WPP announced the merger of its two largest PR firms into one agency, with major implications for thousands of employees and the wider profession.

BCW (previously Burson Cohn & Wolfe) and Hill & Knowlton are being crunched into one entity – Burson – in honour of the late Harold Burson, a founding father of the modern public relations business.

It’s fitting that the name Burson, who founded Burson-Marsteller in 1953, lives on in what becomes the world’s biggest network, with combined global revenues of around $1.3bn (£1bn) each year, ahead of Edelman. But it also means the loss of the names Hill & Knowlton, set up in 1927 by John Hill, described in his New York Times obituary as “a confidant of corporate mighties”.

It, too, begs the question of why now for WPP, when these giant PR networks have been around for many decades? But this fits into the WPP’s behaviour in recent years. In October Mark Read, the chief executive since 2018, merged the advertising agencies Wunderman Thompson and VMLY&R under a new, uninspiring acronym – VML.

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Similarly, the ad industry bemoaned the final loss of such legendary names as Young & Rubicam and J Walter Thompson. Read explained: “Scale matters in today’s world as AI and technology transform marketing and global clients look to simplify their relationships.”

While true, listed company WPP is seeking urgent savings. In October, it issued its second profit warning of 2023 with a forecast for net revenue growth of just 0.5 to 1 per cent.

With flat revenues and rising costs – the result of salary inflation and high interest rates – margins are squeezed, so holding companies are looking to restore profitability. By crunching together agencies, WPP can save millions in back-end systems, costly office space and, probably, staff numbers.

Bosses would have been planning the Burson merger for years, and which executives take influential combined roles. In this case BCW’s global chief Corey duBrowa landed the global chief executive role at Burson, while Hill & Knowlton boss AnnaMaria DeSalva becomes chairman.

WPP said DuBrowa and DeSalva would jointly oversee agency strategy, client service, employee experience and culture, with other staff decisions to come. But make no mistake, it is DuBrowa and BCW who hold the whip hand here.