LONDON (ShareCast) - (Sharecast News) - WPP has lost its long-held and largest contract, as Ford Motor Company's lead creative agency, which has gone to its fierce rival Omnicom's BBDO agency.
Ford, which said back in November that it was conducting a review of its ad agencies, confirmed the FTSE 100 company would continue to be in charge of its media planning, media buying, shopper and performance marketing, website development and customer relationship marketing.

WPP's dedicated Ford agency GTB will still produce 'tier two' advertising work in the US plus advertising in China and public relations business.

Last year Ford spent more than $1.2bn on measured marketing in the US alone, according to Kantar Media, and around $4.1bn globally. The US automotive giant said it was aiming to cut its ad spend by roughly $150m a year.

Historically, the contract had accounted for about 4% of WPP's revenues, with analysts calculating that creative fees made up roughly a quarter of that.

"We gave this review everything we had: it was an extraordinary effort by the entire global team over many, many months," said GTB chief executive Satish Korde in an internal agency memo, reported by Forbes, which said that redundancies were expected among GTB's 3,000 staff on the Ford account.

WPP shares fell more than 2% to 1,084.65p, approaching lows from earlier in the year.

As well as making a major restructuring of the creative business possible, UBS said losing Ford might dent WPP's sales growth next year, with around a 2-4% hit to earnings.

"While this is a blow to prestige, the actual financial impact from the loss is limited and, in some ways, may provide a relief that the overhang is gone," wrote Liberum analyst Ian Whittaker.

Email this article to a friend

or share it with one of these popular networks:

• DIGG
• FACEBOOK
• STUMBLEUPON
• MIXX
• YAHOO BUZZ
• DELICIOUS
• REDDIT
• NEWSVINE