What would you do if you were running WPP today?

I’d break it up. It’s served its purpose; it’s gone. The senior management of WPP have no financial interest in the company; virtually nothing. There is a separation of ownership and control. It’s a job, so they want to retain their jobs. It’s rather like what’s happened in Australia. They bring in a guy from Germany, who loses the confidence of people inside the business. WPP have come along and bailed them out. He doesn’t care. He got a large payment for coming into the business and he’ll probably get a large payment on his exit from the business.

Omnicom is different. John Wren has been at it for many, many years. I’ve said this before, he doesn’t have a strategic bone in his body, but he does execute well. I was talking to an investment banker yesterday and he knows them well. I think John has been very shrewd during the Covid crisis. He put in massive provisions, which nobody has really raised a question about and I think Omnicom is probably likely to emerge from this recession.

The other thing that shocks me is that Omnicom is the only agency group that doesn’t report, supposedly, net revenues. Actually, they do. If you go to their presentations, all you have to do is subtract pass-through costs and their top-line is actually down, at the end of the third quarter, by about 8%, which is roughly the same as WPP. People are focused on the top-line because of the pass-through costs and because Omnicom tends to be much more of a black box, from an analytical point of view. They have done better than people think and they’ve taken very heavy provisions. They took provisions for a million square feet of office space; IPG took 500,000 square feet of office space. These are non-cash provisions – there must be some cash provisions there, as well – that will buttress their profitability as they go into 2021, so you should see a sharp snapback.

The big question about the holding companies is whether it’s a dead cat bounce in Q2. It was the worst in Q2, this year. It will be the easiest to cycle but, this morning, WPP said they’re not going to get back to 2019 until 2022. You would have expected the rebound next year, when you look at the GDP, minus four to five this year, plus five to six next year. Just as we’re talking, I’m seeing headlines from Goldman’s saying that the consensus underestimates the rebound. We’ll see what happens. I’m very bullish on 2021 because of the GDP rebound driven by vaccines, the tailwinds from Euro 2021 and Tokyo 2021, however those tournaments are implemented and however full on they are and, last but not least, the micro tailwinds around us that will make life really interesting next year, around BMW and Mondelez and everything else.