WPP, the world's biggest advertising agency, was the biggest net gainer from the spate of contract reviews that shook the industry last year, winning business from Sony, General Mills and L'Oreal.
For all that success, it's had little love from shareholders.
Net sales grew 3.3 percent for the year, a decent pace when compared with WPP's peers; margins are improving; and more money is being returned to shareholders through dividends.
But WPP's valuation remain stuck in the same range as rivals Omnicom and Interpublic -- although all have a higher price-to-earnings ratio than Publicis, which has been beset by contract losses and concerns over its strategy. Omnicom's stock has actually outperformed WPP so far this year.
So what's going on?
Part of the story is that the ad agencies' performance tends to track global growth. WPP CEO Martin Sorrell warned on Friday the industry faces a challenging year as the slowing global economy forces companies to slash costs.
WPP has also been punished for its exposure to slowing growth in China, its third-biggest market, and emerging markets. Those account more than 30 percent of sales, a far bigger proportion than Publicis at 22 percent and Omincom at 15 percent.
But there is a deeper concern that's affecting all the agencies: investors are worried about how technology and new competition from everyone from Google to Accenture will hurt the traditional advertising holding companies.
Big brands are squeezing their advertising agencies like never before -- the $30 billion in media buying reviews last year were all about getting more for less and pressuring the agencies to justify their value as more marketing dollars move online from print and TV.
The rise of automatic ad buying through online trading, known as programmatic in the industry's ugly jargon, is likely to squeeze fees in the most lucrative business for agencies: placing ads on the web, TV and radio and on behalf of customers. Challengers like Google and Facebook can go straight to brands to sell them ad space on social networks and next to searches, cutting the agencies out.
That business is also the source of growing mistrust between advertisers and their agencies because the technology is making the business more opaque. In the U.S., a trade association of marketers is investigating allegations that agencies pay kickbacks in the form of volume rebates to media properties, and is expected to report findings in April. (No specific agencies have been named, and Sorrell has said he's happy to help the inquiry.)
Sorrell has already responded to many of these challenges head-on. WPP has built its own programmatic trading operation, Xaxis, which competes with Google's Double Click. There, revenue grew 16 percent last year and is projected to hit $1.1 billion this year.
WPP is also making a bet that data will become more valuable to customers, and aims to profit from that from its market research unit Kantar Group. That's something its competitors don't have.
Plus it owns GroupM, the world's biggest media buyer. And Sorrell has at least been transparent in saying GroupM needs to earn its margin, so won't pass all of the discounts it receives on to clients.
None of this is to say that WPP is insulated from technology and macro pressures that could hurt profit. Publicis and Omnicom have both made their own moves into technology-led businesses, so WPP isn't alone.
But it looks increasingly possible ad agencies aren't going to get gored like other disrupted businesses like music or hotels. The business model may, however, become more boring -- there will be less room for dramatic margin growth and cyclical factors such as GDP will weigh more heavily on the business.
Sorrell at least deserves some credit for making WPP a little duller.
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
(Corrects period for sales growth to full-year in third paragraph)
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