At a macro level, the world is in a pretty strange place at the moment. Populism is at the centre of uncertainty across many countries in terms of political direction, macro economics, technology and consumer uncertainty.
Populism and nationalism is on the march: Duterte in the Philippines. Trump in the US. The German right wing populism leaning political party AfD is shifting the Overton window in Germany. The yellow vests in France and the UK is channeling anger into political activism along fringe party lines providing an opportunity for populism. The UK has seen a rise in far right grassroots media mirroring the rise of The Canary and similar publications on the left both of which fuel different forms of populism. The Russians don’t need to do it as the populism and divisive politics is homegrown. The Queen’s speech called for unity in the country and the UK government’s Prevent anti-radicalisation programme has more far right cases than Islamic extremists. Even China has been gradually moving to a Han nationalism as part of its more forceful foreign policy. India and Pakistan have both seen a rise in sectarian politics. This has impacts in terms of foreign trade and economic growth. We are already seeing domestic brands rising in China and India; we may see a decline in brands and product SKUs in the likes of the UK – all of which will impact advertising budgets. At an agency office level; the chilling effect of nationalism is going to affect the movement of talent on both client and agency side. It’s hard to articulate the atmosphere of an agency that I was working in the day after the Brexit vote without using the word bereavement. I know people in my family and peers who are moving away. Over time this will impact culture and creativity. It is hard to remember but back in the 1970s the UK was much more parochial and less multi-cultural than it is now. Everyday things we take for granted like good food were much poorer experiences.
There are so many variables in play we don’t know where populism and divisive politics is going, but there are dark possibilities to the government ‘by the seat of their pants’ which seems to be prevalent.
Cryptocurrency and block chain: We’ve seen a wide range of crypto currencies decline in values this year. What are the factors might drive a recovery? Why would there be a spike in demand? I don’t know what that ‘X factor’ would be. I suspect that experiments in block chain such as verifying online media spend to prevent online fraud will start bumping up against the limitations of the technology. Blockchain has a relatively low transaction rate compared to legacy payment systems. Decentralisation still isn’t as good as an Oracle database or a mainframe a la the traditional banking system. Some applications just make no sense.
From Farm to Blockchain: Walmart Tracks Its Lettuce – The New York Times – is a classic example of technology for technology’s sake. How much lettuce would Walmart be selling day in, day out? That data has to be collected across a complex supply chain. Secondly, its a privatised centralised blockchain which negates the technical benefits of Blockchain and makes me wonder why IBM weren’t selling in Db2 or Oracle high transaction speed relational database on a z-series mainframe. It’s announcements like this that makes one wonder if blockchain has jumped the shark.
Virtual reality hasn’t seen the level of adoption that was predicted. The problem is no longer one of technology hardware (lets ignore battery life for a little while) but content. VR changes the way stories are told and experienced, it makes it hard to build brand experiences and compelling content. Microsoft has managed to build a community of early adopters in Altspace – a Second Life type environment. Augmented reality (AR) has been sporadically adopted and Apple has been putting a lot of work into building creator tools, but the decline of Blippar. Magic Leap’s demo film for its partnership with Cheddar doesn’t currently look like a compelling AR application to me. It does mirror, anecdotal evidence that suggests the most common use of VR is to replicate a big TV experience in a small space through the Netflix application.
https://youtu.be/xjYE-joYjQs
If 2017 and 2018 were the years when ad fraud became the bête noire of marketers, 2019 might see harder questions asked of influencer marketing practices. The move from influencers to micro-influencers was down to cost per reach and engagement. The move to nano-influencers implies a similar kind of shift again. Yet it seems to be largely taken on blind faith by marketers at the moment that influencers are good thing. I think many of the challenges that influence marketing faces when I wrote about them earlier are still valid. One question that I haven’t seen seriously considered by marketers is when you’re in a culture where ‘selling out’ has moved from being shameful to gen-x; to a badge of validation in the space of a decade that has to change the value proposition that influence brings? As a marketer the possible answer to that question worries me.
The focus on ad fraud might be partly responsible for a slight resurgence in the realisation brand advertising is valuable. Performance advertising is about the now, brand advertising is all about sowing acorns that are reaped for decades to come. As a concept it’s easy to grasp at an empirical and research driven level. But when marketers typically stay in a role for a short time, the now becomes of outsized importance. They have to make an impact and then plan their exit strategy in what’s typically a three year cycle. Brand is hard for FMCG (fast moving consumer goods) brands to take on board as they see channel and shelf disruption from the likes of Amazon and Ocado. They have experimented with the direct sales model a la Birch Box and Dollar Shave Club, but that will only work with certain products. Consultants selling disruption are selling chaos; clients hedging against black swans often miss where change isn’t happening – consumer behaviour doesn’t change at the speed of PowerPoint. I’ll leave the last word on digital disruption to Mark Ritson.
It’s hard to get emotional or feel any of the romance of news media from a home page, but the paper edition carries with it the great cultural power of journalism. Print editions will become the ‘couture’ offering of the news brands – loss-making but important assets for building and retaining authority and influence over the market
Validation of traditional media can be seen all around us. Amazon printing catalogues, online brands having flagship stores. Underground and out of home adverts for e-commerce businesses surround me as I go about my daily life in London.
Stories with everything – I don’t know whether the recent trend of every social platform having a short form video function that disappears a la ‘stories’ is a wider socio-cultural trend or the constant carousel of changing formats as part of a ploy to keep users engagement rate up. For established platforms there is little to be lost by throwing new features agains the wall and seeing what sticks.
I’ve omitted talking about 5G as it will take more than a year to get up and running. It won’t be clear what its application is until we start to see how effective the network is in practice. Gadgets like fold out phones won’t fundamentally change the pictures under glass interface used in smartphones for the past decade or so. Their impact may be exaggerated due to their high cost that consumers will bear one way or another.
I realise that these are a series of random thoughts but would be interested to know what you think. Feel free to comment below.
What now for the working class? Following president Trump’s election and the British plebiscite on European Union membership there has been lots of hand wringing about workers who traditionally participated in legacy industries being outside society. Here is what we have to deal with:
The ‘traditional’ jobs aren’t coming back
Middle-class roles are already being disrupted
There is a declining return on investment in further education, yet lifelong learning is a compulsory requirement
Globalisation is working at an aggregate level, but isn’t working at a local level
Western society has fractured. It will become more fractious once the realisation takes hold that:
It can’t be resolved by simple measures, populists might listen – but can’t solve anything. Jobs are governed by a multiple factors that affect both cost and demand considerations
It can’t be solved in a relatively short time frame. You can’t build the necessary eco-system and supporting industries to bring the jobs back; even if the economics made sense
Governments don’t have their hands on the levers of control, the best governments can do is actively manage decline. Technological disruption puts the levers of control with a smaller group of people
There is a lack of willingness by those with the money and the power to solve it – primarily due to the pressures that drive their behaviour
Existing social welfare safety nets aren’t sustainable
The realisation that populism doesn’t deliver is likely to cause a further visible outburst of anger. Which should be good news for the private security industry. This could result in civil or international conflict. It has already happened. Factors that contributed to the Arab spring and the Syrian civil war included a large under-employed population living in stagnant economic conditions with no hope in sight. This probably sounds familiar.
I am ruling out some sort of positive ‘black swan’ event which changes the game completely and provides meaningful work with great wages across societal boundaries. If I could reliably predict these, I would be writing this from my private Airbus A380.
Instead I can see four broad categories of outcomes, all of which are ugly:
Carry on – carrying on isn’t likely to be sustainable as societal pressures go to breaking point
Managed decline – from a rational point-of-view the most ‘possible’ solution. Unpalatable from a voter perspective. It begs the question at what point would the UK economy bottom out? Managed decline makes the most sense as an interim measure whilst a country works out what its new place in the world is and charts a path towards it based on careful strategic investments with limited capital
Massive investment – presents a number of challenges that make it nearly impossible for western countries. It would require a long term view – unlikely without consensus driven politics with a high level of comity, huge access to credit – again unlikely with highly indebted economy and a slowly declining credit rating like the UK. Would take too long to satisfy angry voters
Massive disruption – the dice is thrown in the air as society tears itself apart and the strong gain control – think China’s Cultural Revolution. Wages and worker rights may drop to make them more cost competitive for low skilled manufacturing allowing for an employed but disgruntled workforce. Power is unlikely to shift too much, the corresponding upheaval in population numbers may provide some supply side pressure on wages when its all over. In all likelihood, it would just reduce pressure for change, increased willingness to work together on a longer term solution, but not provide much medium term economic benefit
Disruption
Here is a chart of numerous successful business, some of them are over a century old. AT&T and Verizon can trace their history back to 1877 and the Bell Telephone Company set up by Alexander Graham Bell’s father-in-law. General Electric goes back to work by Thomas Edison in 1880. These companies took from 117 – 137 years to become $200 billion businesses. Facebook took ten years requiring only 3% of the people AT&T needed.
It would be reasonable to assume that the future is going to create less jobs with given investments rather than more.
Company
#Employees
Year its market capitalisation became US$200 billion
Facebook
9,199
2014
Microsoft
27,000
1998
Apple
46,600
2010
Alphabet (Google)
46,600
2012
Amazon
165,000
2015
Verizon
176,800
2014
General Electric
239,000
1997
AT&T
302,000
2007
So large private enterprises will:
Employ less people which means less ancillary demand for services in the locale. Less restaurants, shops, artisanal coffee shops, micro breweries, nail bars, car valets, hotels and hair salons
Employ even less unskilled people – what unskilled labour is required will be employed on a flexible basis. Their roles will be competing on ‘total price’ with a global workforce and robotics
This hypothesis is supported by data from the MIT Technology review which showed that modern US manufacturing managed to increase productivity by 250% whilst reducing staff numbers by over 40%.
Win-Win to Winner Takes All
Technological progress and globalisation has resulted in a decline in the middle class in western countries. Pew Research claims that the US middle class declined from 61 per cent of the population in 1970 to 50 per cent by 2015.
Corresponding average ‘real wages’ for US ‘good producing’ workers peaked by the mid-1970s and have been broadly stagnant since. A pattern mirrored in other developed economies. Hong Kong saw a similar peak from 1967 riots through to the early 1990s until factories moved across the border.
Manufacturing productivity had grown steadily over that time. You can argue over the data points but the overall trend seems to hold true.
Owners of capital have enjoyed increased returns versus the providers of labour. Knowledge work, a key part of middle class roles could be easier to export than production lines. A classic example is the bank back office roles that have been exported to India.
Supply chain
At the moment UK manufacturing jobs operate as part of a complex supply chain that primarily addresses the European Union as a market. The supply chain is built around a number of factors:
The value of the product
The weight of the product
The volume of the product
The cost of shipping versus the cost of production
How well the product travels
Distribution of product demand
Proximity to suppliers
Proximity to talent
This is why companies may package a product in one country and manufacturer in others. Washing powder is a classic example of this. Chocolate travels well, so Cadbury could move production lines of internationally popular products to Poland. There is a greater incentive to move low skilled work out of areas that aren’t geographically central to a given supply chain. European freedom of movement may have kept jobs in the UK by allowing low and semi-skilled workers to move rather than the factories. This would be of little consolation to UK workers, but would benefit UK tax coffers.
This complex formula is the reason why jobs move in and out of the UK.
Cutting the UK out of this supply chain with a hard Brexit ensures that suppliers have to make complex choices. BMW will probably be wondering what UK presence it needs to maintain in order to keep the Mini brand values. It may decide its easier to evolve the quirky Britishness out of the brand over time and just keep it quirky. The Audi TT hasn’t been harmed by actually being assembled in Hungary.
The majority of components in the supply chain for the Mini production line is based in Germany.
A post-Brexit UK could be in the position of importing more rather than less products once companies take into account the bigger picture of the supply chains and the EU single market. This will lead to a net loss of working class livelihoods.
Role of eco-systems
Richard Florida is a Canadian professor who has spent much of his time looking at urban studies from the perspective of prosperity. He is known for is work around the creative class and urban regeneration (or gentrification). His work is controversial. One key concept he has of relevance to working-class communities is one of ‘clusters’ where eco-systems exist. When you apply it to traditional working class industries one can see how the jobs aren’t just going to come back. The UK has a series of traditional clusters that are in overall decline, this is best illustrated by the state of chemical, oil refinery and coal sectors which underpin a wide range of manufacturing industries.
Where new clusters spring up (Silicon Roundabout and the FinTech businesses within the Square Mile) they create employment that much of the UK population is ill-equipped to fulfil.
Let’s look in greater depth at traditional manufacturing industries that have provided the working class with good playing jobs.
Factories build on suppliers, who build on raw materials processors, who build on utilities and extractive industries. Take for example industrial revolution era Stoke-on-Trent which was close to high quality clay pits and coal that could be cheaply shipped in from mines in Lancashire or South Yorkshire. All of which required semi-skilled and unskilled jobs that gave the working class their livelihoods.
Unfortunately for Stoke-on-Trent; clay is readily available around the world, opening up the possibility of production in areas with cheap labour. Automation raised the quality of production and fashion can quickly dictate whether an ‘area’ brand is in demand.
If we look at the industrial landscape of the United Kingdom, the manufacturing industry has been hollowed away during the 1980s and 1990s. The UK lost 18% of its manufacturing capacity in the space of 18 months during the conservative government of Margaret Thatcher.
There has been a corresponding (likely terminal) decline in the necessary facilities to support an industrial economy. Now let’s look in-depth at three essential types of facilities that underpin manufacturing:
Oil refineries
Coal mines
Chemical plants
This base of the UK industrial eco-system is running on ‘life support’ in critical areas.
I was fortunate to have a great science teacher at school, he once said to me that you could measure the size and health of an industrial economy by the amount of sulphuric and hydrochloric acid it manufactured and consumed. In order to manufacture hydrochloric acid you need a chlorine gas plant – neither chemical is something you want to transport over long distances. The side effects of a leak would be catastrophic.
The UK currently has one plant to make chlorine gas that is government subsidised because there isn’t a sufficiently large industrial base to support continued profitable production. What industrial capacity is in the UK is perilously close to being snuffed out.
What is left of the UK chemical industry has consolidated in the North East of England Process Industry Cluster (NEEPIC). Some of the products created are intermediary chemicals for use elsewhere in the European Union. Brexit is likely to have a disruptive effect on some of these manufacturers. The cluster is a key reason why Nissan decided to build a manufacturing plant in Sunderland. NEEPIC is dependent on oil refining capacity for key chemical building blocks (feedstock).
Oil refineries
Oil refineries are considered by the public as providers of petrol (gasoline), diesel and jet fuel. The reality is that they provide feedstock (chemical building blocks) for most things in everyday life:
Foods
Medicines (or we can go back to leeches and blood letting)
Paints (containers, large manufactured goods, civil engineering)
Dyes to colour fabrics, plastics and other materials
Plastics (the modern world as we know it) – structural plastics, coatings, fibres including clothing textiles
As I write this is, it is easier to look around my desk and count the products that don’t have an oil-derived input – one item, the desk itself which is unpainted. Though I would put good money on it that the trees it was made from were felled with petrol chain saw and transported on a diesel-powered lorry to the saw mill.
Yet the UK has lost a huge amount of oil refining capacity. From 1974 – 2012 refining capacity almost halved from 148 million tonnes to 77 million tonnes (Energy Institute). This decline happened despite start of UK North sea oil production in 1975.
Peak production on North Sea oil occurring in 1985 and 1999 (two peaks due to technological innovation). There were 22 active oil refineries in 1974, at the time of writing there are now seven.
Part of this was driven by changing energy consumption such as the decline of home heating oil and more fuel efficient cars. But a good deal would be due to reduced ability to compete against foreign petro-chemical feedstocks and reduced industrial capacity.
Oil refining capacity has moved to closer to where the industry is.
Belgium and the Netherlands have oil refining capacity beyond their internal needs because of their ease of access to continental European markets. Germany as Europe’s industrial powerhouse has the largest refining capacity in the European Union – which matches its industrial economy.
Much of the capacity to provide chemical feedstocks for industrial use has moved to the Far East; notably Singapore, Japan, Korea, Jamnagar in India and China. Overall industrial production has moved to East and Southeast Asia.
Coal production
The working class found coal production as a source of working class jobs. Even coal production in the UK is roughly 10 percent of what it was in 1980. There are no deep coal mines active in the UK, only a handful of open cast mines. Coal is not only useful as a fuel but also a alternative supplier of feedstock for a diverse range of products including fertilisers, plastics and medicines. Even if coal comes back to prominence as oil reserves run out it would take a lot of effort to get UK production going again – perhaps too much effort.
Managed decline of traditional working class areas
The purpose of managed decline would be to concentrate efforts where they can make the most impact. London would draw in more people from the hinterlands. Cities like Liverpool would continue to decline in population. Low quality housing (think trailer parks or shanty towns) would cater for the internally displaced workers and there would be a likely increase in casual or gig economy roles in place of many working class roles.
So what would managed decline of working class areas look like? We have a clue from government discussions after the 1981 Toxteth riots. Lord Geoffrey Howe wrote a letter which was considered too controversial at the time
“I fear that Merseyside is going to be much the hardest nut to crack,”
“We do not want to find ourselves concentrating all the limited cash that may have to be made available into Liverpool and having nothing left for possibly more promising areas such as the West Midlands or, even, the North East.
“It would be even more regrettable if some of the brighter ideas for renewing economic activity were to be sown only on relatively stony ground on the banks of the Mersey.”
“I cannot help feeling that the option of managed decline is one which we should not forget altogether. We must not expend all our limited resources in trying to make water flow uphill.”
Howe realised that even discussing the concept at the time would be explosive.
Retrenchment to focus economically
In practical terms, it would mean:
Re-centralising government departments
Not spending on infrastructure beyond critical maintenance
Rationalising government support infrastructure: police, hospitals, social services
Re-zoning areas from a planning perspective to encourage development only in future clusters
Allowing local government to go into bankruptcy protection and under go US-style emergency management
Once population decline hits a critical mass, turning off the last services, rather like the city of Detroit has done
Focus infrastructure investment on ‘clusters’
Connecting benefits to re-location
This process would then give time for western countries; in particular the UK, to re-invent themselves and think about their economic purpose in the world beyond consumption.
The Chinese government have already started on this process whilst their economy is still in a high state of growth – looking to move up the manufacturing value chain, moving into the professional and financial services sectors that the west currently occupy. On the flip side they have not flinched from closing down excess capacity in the steel industry and low value industries. This is causing economic hardship amongst unskilled workers in Guongzhou and the steel towns of Hubei province.
Former clothing factories are being bulldozed to make way for corporate campuses. Small electronics factories in Shenzhen are making way for a financial services centre including a stock exchange.
If one thinks about the Chinese experience and their migration to higher value work, where would the UK go next and what does mean for the future of the British working class?
Disclosure: a long time ago I worked for a forerunner of Burson and WPP’s dedicated agency for Colgate; Red Fuse. During that time I was based out of Hong Kong.
Later on, I won the Huawei consumer devices AOR business from my old colleagues in Hong Kong.
I know Burson’s current CEO Corey duBrowa from even further back in my agency life, we share a love of the Wu Tang clan.
What’s news?
Ok, now that’s out of the way, let’s get into what you’re really here to read. The Times ‘news‘ that Burson is a possible candidate for sale isn’t really news. It had been eluded to previously in coverage. Coming in as a new CEO to WPP, it was inevitable would take an all-up strategic review.
Executives in the group have also discussed potential disposals as part of the new strategy, with some suggesting that Burson, its PR agency, would be the easiest to consider for sale given it sits separately from the three other divisions. – WPP to overhaul creative agency structure in strategic rethink | Financial Times (February 9, 2026)
The real news was that WPP appointed Goldman Sachs to do the work and that Burson reported a 6% decline in revenue in 2025.
The shape of the new WPP has been becoming clear for a number of months.
WPP Production was basically the same direction of travel as Hogarth with a new brand. Hogarth was a new brand in itself, and didn’t have the depth of brand equity that Young & Rubican (Y&R Brands) or J Walter Thompson (JWT) had.
WPP Open – AI stuff. Some of which is ‘self-service’ to tap into smaller clients and some of which seems to sit in WPP Production.
WPP Media – which seems to be a rebrand of GroupM, like WPP Production it makes complete sense.
WPP Creative – puts the creative brands under one line item where it used to be under Y&R Brands, JWT, Ogilvy etc. The past structure was as much down to WPP’s history of acquisition as it was to strategy. Much of this work had been done under Mark Read, this seemed to be as much about cleaning up the accounting processes as anything else. PR agencies would nominally fit underneath.
Why would WPP sell Burson?
A successful sale of Burson would provide WPP with funds to use elsewhere. This could fulfil two purposes; reducing debt or reinvesting in WPP’s business and technology transformation. Burson is a business that could be packaged up, sold to the right buyer or floated in a public offering.
The downsides would be a loss of integrated pitch power, and a smaller global footprint for back-office resources.
Obviously a few questions come up about who would be a buyer and would WPP want to spend the time listing Burson as a separate business?
It also makes strategic sense
When I worked at WPP, the PR agencies outside of Ogilvy weren’t integrated very tightly to their creative agency counterparts. You had a similar distance between the likes of Golin and McCann Erickson at IPG too. So the loss of integrated pitch power less than it would at first appear.
PR is an umbrella term for two broad functions, marketing communications and management functions. Management functions would include:
Internal communications including around change management.
Legal and compliance, for instance around financial communications for a public company.
Stakeholder engagement including the investor community, local communities and government.
That isn’t an exhaustive list but it covers the major areas. There is more synergy between these areas and management consultancies than there are with WPP’s offerings. WPP has already sold FGS last year. FGS is a financial communications specialist.
The ‘management functions’ is more of a boutique offering and can come with risks as Bell Pottinger found out to their cost.
It’s arguably even more risky in a volatile political environment that yo-yos between different forms of political populism.
The other side of PR: marketing communications is earned media. That side of PR has been shaken up by several factors:
Decline in the mainstream media.
Search, generative AI and social algorithms as tastemakers.
The creator economy.
Brand media: led by the technology industry who published their news directly via blog posts.
In the past creative agencies thought about talkability, which was earned impact from advertising creative. Now creative agencies think about campaigns even more in terms of earned impact, including earned first approaches and WPP agency Ogilvy has managed to integrate its PR function into this process.
Specialist agencies tap into the creator economy and it’s been well documented by senior leaders in PR like Stephen Waddington how the PR industry missed the SEO opportunity.
PR agencies have looked to redefine themselves. The world’s largest PR firm, Edelman calls themselves a ‘global communications firm’ to help it position itself against management consultancies and advertising agencies.
The question WPP would have been asking themselves would have been: do they really need Burson when a lot of its function is now being done by media and creative agencies?
What does Burson gain or lose from leaving WPP, one way or the other?
Burson and its previous constituent agencies have been part of a conglomerate for the past quarter of a century that wasn’t focused on their business. WPP’s former CEO Sir Martin Sorrell used to talk about WPP primarily being a ‘media investment’ business for its clients. Helping them make the most effective, efficient investments in advertising for its clients.
Burson could be allowed to chart its own course, with less constraints put upon the business.
Burson would lose access to shared services over time, having to reorganise:
IT support
Offices
Time-tracking
Finance
Employee and at least some client contracts
New business prospecting
Client contracts where the work is shared with WPP agencies
Over time Burson could rebuild partnerships and capabilities that it would have previously had through WPP.
There is a bigger question about whether the natural consequence of the structural bifurcation of modern PR into ‘management’ and ‘marketing communications’ specialists leaves room for a large full service generalist agency like Burson.
The industry itself is splitting rapidly between highly specialised management consultancy style operations handling the C-suite, and earned-first creative shops driving marketing communications. The traditional, full-service generalist model that Burson and its ancestors helped invent is finding it harder to operate in the middle ground. For example, Edelman, the PR industry’s bellwether fell below the $1 billion fee income mark in 2024, a 5% global decline.
If the world’s largest PR firm is struggling to make the integrated generalist model work, it may be that the model itself might be broken?
Who may want to buy Burson?
Private equity (including supporting a management team buyout)
I think that Burson would be a tough sell for an informed private equity (PE) firm. PE firms tend to look for business with a compound annual growth rate (CAGR) over 10%.
Here are some estimates that are why I came to this conclusion and I may be wrong.
Global Industry CAGR (2024–2030) is projected at 6.1% to 6.4%, although some aggressively optimistic estimates suggest up to 10.5%. That is based around assumptions on digital transformation and AI-driven services being fully integrated.
Looking at historic data from PRovoke Media’s global top 250 PR firms (2015 – 2023), CAGR was typically between 3.5% and 5%. These numbers maybe a bit optimistic due to currency fluctuations. (During CoVID, 2020 was flat and there was a sharp rebound in 2021.)
Burson’s constituent agencies BCW and H+K were running somewhere around 3.5 – 4% CAGR.
The outliers are AxiCom and ASDA’A who are Burson’s tech specialist brand and its Middle East agency presence – both operating in high growth sectors. They had CAGR somewhere between 12 – 14%.
This is the reason why PE has focused on specialists in the healthcare area or financial communications like FGS Global where the growth rate and margins are higher than normal.
Given the length of time that Burson has been within WPP, the consolidation that the business has been through merging:
Burson-Marsteller
Cohn & Wolfe
Hill and Knowlton (H+K)
JeffreyGroup
WPP likely trimmed out any organisational ‘fat’ which leaves little if any efficiency gains to be made by an acquiring PE firm.
When these firms were all separate it’s not like WPP were generous at the best of times. I heard allegations of bonuses either cancelled , or like pay rises constantly pushed out as aggressive cash management and cost reduction with junior and mid-level staff taking the brunt of this process.
Another PR agency network
Another PR agency network purchasing Burson may gain some operational efficiencies by de-duplicating the back office business processes from finance to HR departments.
But given that Burson is the world’s number two agency by fee income according to Provoke Media and PR Week; it is unlikely to be acquired by another PR network.
If the current number one Edelman bought them, they would run into antitrust issues and this would put them on the radar of the Trump administration in the US. Given the progressive leaning content of their Trust Barometer research, Edelman may end up creating its own business crisis.
Omnicom are likely too wrapped up in consolidating their purchase of Interpublic to attempt it. Even if they did make an offer, WPP may not be inclined to sell to a direct rival.
Publicis and Havas both have their focus on larger growth opportunities elsewhere and PR are much smaller parts of their business.
Most of the rest of the largest global agencies in the PR industry are either industry specialists like Real Chemistry and Invizio Evoke (health), FGS Global, APCO and Brunswick (financial communications) or national champions like Germany’s mc Group.
Conducting a leveraged buyout (LBO)of Burson would be unattractive due to the cost of debt servicing versus Burson’s CAGR. So this would make financing for a management buyout (MBO) challenging too.
Spin out or spin-in
From a PR agency perspective Burson has a good quality management team at the top. Someone like Corey duBrowa, who has previously worked at major corporates like Google and Starbucks. If the business was spun off or floated like Next15 Group, it could make sense on the London Stock Exchange.
Retail investors would be likely to give the best return for WPP. However, an IPO would take a major effort and a good deal of time to make happen that doesn’t feel like the kind of cadence that the WPP Elevate28 plan / platform wants to move at.
A spin-in might make some sense. Merge Burson with a publicly listed company (for instance Next15 or Stagwell) and then WPP sell down their shares over time. WPP maybe able to securitise its shares in such a way that it gets its (diminished) return upfront and a financial partner gradually sells down the shares with a view to making a profit on the money it paid WPP versus the price it gets on the stock market.
Clients get a vote too
Clients get a vote too. If the future of Burson affects client team morale, capacity or make-up they are likely to head for the door. The agency intellectual capital is their practitioners.
We saw a client exodus happen during the protracted acquisition of IPG by Omnicom with 3.5 percent drops in year-on-year revenue and peaked as high as 10% on a quarterly basis in markets like Australia.
Maintaining the client base will require a swift disposal process that doesn’t have Burson people keeping one eye on LinkedIn and the jobs section of PR Week or Ragan PR Daily.
Omnicom is desperate to rejuvenate its business and stealing unhappy Burson clients would be an easy win. Publicis is a high-performing group of agencies already and boutique shops live for ‘giant-killing’ new business pitches. Havas had a healthy PR business that would provide an alternative for any unhappy Burson clients.
The Human Cost of Structural Change
The current speculation surrounding Burson reflects a broader structural shift across the industry. For the professionals within the agency, many of whom have spent years managing complex briefs for major clients, this period of uncertainty will be unsettling.
Burson’s current position is not a reflection on the capability of its staff. It is the logical outcome of the continuing bifurcation of modern PR.
The sector is dividing between specialist management consultancies advising the C-suite and agile creative shops leading marketing communications.
The traditional generalist model, is finding the middle ground smaller and tougher than it used to be.
WPP’s wider strategy is now firmly anchored in technology and integrated creative solutions.
Operating independently or with private equity backing, Burson would have the operational freedom to determine its exact shape in this new market. Stepping away from a holding company structure is sometimes the clearest route to finding the necessary focus. The talent remain in place; the immediate requirement is a business model aligned with current market realities.
Along with immigration, and economic measures (like inflation, interest rates and possible growth); crime is likely to decide the next general election in the UK. The issue and the supporting data around it are complex and sometimes contradictory in nature.
It sits right on the fault line between social democrat and populist narratives to voters.
Crime is a hardy perennial of policy subjects
Labour’s political golden age of the late 20th century harked back to the transformation of the party that claimed to be ‘Touch on crime, tough on the causes of crime‘. While the phrase was popularised by Tony Blair at the 1993 Labour Party conference – it owes its roots to the opposition team assembled under former Labour leader John Smith.
The phrase captured Labour’s attempt to steal the Conservative position on law and order, combining it with a preventative approach to the social ills that drive the issue including homelessness and poverty.
Two decades later and David Cameron’s ‘Broken Britain’ depicted a country awash in social decay and by implication criminal behaviour.
So it’s natural, that during a time of social disruption and stubbornly stagnant economic growth that crime will be used as a political differentiator.
It fits into a wider perception of the UK being a country in decline. This perception was found by Ipsos to be one of the key drivers of political populism.
Ipsos also found that the perception of crime and violence being the number one issue rose from 18% of respondents to 23% from 2023 to 2024.
Crime is falling?
The statistical picture on crime is complicated. To summarise:
Overall reported crime numbers are down. However, trying to get police to log a reported crime is much harder in previous times.
The ‘decline’ in reported crimes across different types of offences is very uneven. Data from the UN Office of Crime and Drugs found that the UK had seen an unprecedented increase in the rate of serious assaults from 2012 – 2022.
As the FT put it:
“street crime” has risen rapidly. Over the past decade, reported shoplifting has risen by over 50 per cent, robberies (including phone and car theft) by over 60 per cent and knife crime by almost 90 per cent. Public order offences have almost trebled
The police have become less effective crime fighters. Although police have less reported crimes to solve, less than six percent of crimes in committed in the UK resulted in a charge or summons in 2023. That compares to just under 16 percent in 2015. The UK government’s focus on increasing mass surveillance powers won’t solve the crisis in crime fighting. An example of the problems that the police face and failed to solve presented itself at the time of writing. There was a spate of phone thefts at the Creamfields festival. All the phones ended up at the same address in Barking. Cheshire police told those affected that:
“We have undertaken an assessment of your crime and unfortunately based on the information currently available, it is unlikely we’ll be able to solve your crime”.
Cheshire Police said that they couldn’t recover their devices despite knowing where they are.
Cheshire Police do not believe the thefts are connected to organised crime. Yet dozens of phones showed up at the same address after they were stolen…
Trust in the public for the police to solve crime is declining. Policing by consent was no longer happening in many areas of the UK. Issues like ‘Asian grooming gangs’ in The Independent Inquiry into Child Sexual Abuse indicated poliicing issues in recommendations to pay attention to vulnerable working-class children and their families when they come forward. Two-tier policing is more likely to run along class lines than political lines.
While crime still lags behind the economy and health as concerns for voters. The percentage of respondents who felt that stopping or preventing crime should be the number one priority for politicians went from 14% in 2023 to 23% in 2024.
While Britain needs foreign direct investment, crime is adversely affecting efforts to attract investors. Foreign business people are complaining to senior politicians they meet about British street crime they’ve experienced on visits. The UK now has a global reputation for violent robberies. 40 percent of all phone thefts in Europe happen in the UK. London alone accounts for 16 percent of all phone thefts across Europe.
Crime across generations
According to both Ipsos and the National Centre for Social Research, the current cohort of young adults stick out with regards their beliefs and attitudes towards crime:
An increased belief that crime is caused by a lack of education
An increased openness to committing crime, particularly fraud.
Opposition to current frameworks for punishment.
All of which is at odds with the fact that much crime is organised, trans-national and violent in nature.
The rise of luxury wellness comes down to a convergence of different factors that have reshaped both the luxury and wellness industries.
Products ain’t what they used to be
Existing high-end health and luxury wellness
Luxury wellness and consumer behaviours
Wellness has become blended with health, providing opportunities for luxury brands.
GLP-1 changed everything
Products ain’t what they used to be
Before we dive into luxury wellness, it’s helpful to understand where the luxury industry stands at the moment. The strategies that have worked since the early 1980s now seem to have come unstuck. To make sense of this shift, it’s worth reviewing the past and current landscape.
The new luxury
There’s a perception (which I believe is largely false) that the traditional attributes of luxury have fallen by the wayside. Scarcity, quality, craftsmanship, design, and heritage are thought to no longer matter.
A classic example of this viewpoint is Jaguar’s attempt to discard its heritage and reinvent itself as something new. I would argue that while Jaguar may have been prestigious in automotive terms, it was never truly a luxury brand. Jaguars suffered from quality issues that should not have occurred, and they struggled in the premium segment of the market, remaining loss-making for years. Whether or not Jaguar will succeed in transforming into an electric competitor to Rolls-Royce remains to be seen.
Another aspect to consider is how global supply chains can now deliver products of comparable quality to those made by artisans. I have a bit more sympathy for this viewpoint. However, these global supply chains were originally trained to act as subcontractors for luxury brands that pursued massification, cutting quality standards along the way.
Consumers seem to undergo a ‘luxury maturity journey’. This journey is accelerating in certain markets. What Japan experienced over 30 years, China went through in just 10. Countries like Thailand are even moving through this journey faster. Over time, consumers in these markets have begun to move away from obvious logos and status symbols to place greater value on quality and experiences. This shift partly explains why quiet luxury is gained traction around the world.
In countries like China and India, local artisans and ateliers are highly appreciated. This shift means that historic luxury brands are likely to face disruption, just as other sectors have been transformed by Chinese firms. And this is happening at a time when many luxury brands are becoming less ‘luxurious’ by opting for a global mass-market approach.
The pioneer in this approach was fashion designer Pierre Cardin.
Pioneer Pierre Cardin
Luxury went downmarket through licensing, a strategy pioneered by fashion designer Pierre Cardin. In the early 1970s, he saw the potential of licensing, recognising that the demand for goods bearing a fashionable name presented a lucrative opportunity. Cardin’s insight was that luxury goods, in the post-war economic boom, were no longer only for the ultra-wealthy but also for the middle class. His brand signed over 850 agreements in 140+ countries, covering everything from clothing and accessories to furniture, household products, cars, and fragrances.
The ubiquity of Pierre Cardin products diluted scarcity, quality, and blurred the brand story. He later repeated this process with French restaurant Maxim’s, demonstrating that luxury was as much about experience as it was about the product.
When you could buy a Pierre Cardin wallet or suitcase from Argos, what did it say about you? It certainly wasn’t a great status symbol. Other brands, like Ralph Lauren, did a better job of choosing their licensees.
LVMH leads the way
Bernard Arnault supercharged a formula for Louis Vuitton that Henry Racamier had pioneered when he built out an international network of Louis Vuitton-owned boutiques, including Tokyo and Osaka, Japan by 1978.
Racamier’s formula consisted of two parts:
Louis Vuitton sold to the middle class as well as the very wealthy.
Louis Vuitton controlled its products route to market offering control over the experience, premium pricing and perceived aspects of scarcity.
For the next four decades, LVMH went on a remarkable growth trajectory, acquiring luxury and beauty brands, duty-free retail, and even hotels. LVMH rode the rise of Japan, up to the end of the bubble economy, then moved on to Korea, Singapore, and Hong Kong. China’s luxury market skyrocketed when the country joined the WTO, solidifying its place in the global economy.
The United States continued to be a steady consumer of luxury products.
During the 1990s, French retailer Pinault-Printemps-Redoute (PPR), now known as Kering, began replicating LVMH’s success, starting its own luxury conglomerate with the acquisition of Gucci in 1999. Meanwhile, Richemont acquired a number of legacy luxury brands as an adjunct to its predecessor’s tobacco business in the early 1990s and then continued to build.
The internet expanded access to luxury products through multi-brand retailers like Net-A-Porter and Farfetch, driving significant growth. These online retailers competed with top-tier department stores like Bon Marché, Lane Crawford, and Harrods, who slowly built up their e-commerce capabilities.
Eventually, brands embraced direct-to-consumer online stores to complement their global networks of boutiques. This shift is why newer mass-market multi-brand online boutiques have struggled:
Matchesfashion went into administration and took Browns with it.
Farfetch was sold in a firesale to Korean e-tailer Coupang.
YOOX was merged with Net-A-Porter and eventually bought out by MyTheresa from Richemont.
Even luxury brands themselves have encountered a few hurdles along the way:
The end of Japan’s asset bubble in 1992
2008 financial crisis
Xi Jinping’s move towards common prosperity which peaked in campaigns during 2013 & 2021
COVID-19 and post-COVID economy
Luxury sector fallout
By mid-2023, the luxury industry started to show signs of stagnation, with low or no growth. Multi-brand luxury e-commerce sites either went bankrupt or were bought out. A few notable beneficiaries included:
Mytheresa – a German e-tailer that focused on the wealthiest clients in this sector rather than broader middle class appeal.
Hermès – who are focused on the high end of the luxury market.
Brunello Cucinelli – a focused ‘quiet luxury’ brand known for their high-end cashmere garments
The key issue with many luxury brands (Burberry being a prime example) is that they lost the essence of what made them truly luxurious. As they shifted from style to fashion, and from artisan craftsmanship to mass production in China, they lost their uniqueness or incomparability as Jean-Noël Kapferer put it.
While champagne can only come from the region around Reims, most Burberry products are made in China, with only two remaining factories in the UK, including a textile mill.
The key issue with many luxury brands (Burberry being a prime example) is that they lost the essence of what made them truly luxurious. As they moved from style to fashion, and, artisan to Made In China – they lost uniqueness or incomparability as Jean-Noël Kapferer would describe it.
While champagne can only come from the region around the city of Reims, most Burberry products are made in China as well as a couple of remaining factories in the UK – one of which is a textile mill.
A second aspect of the change was blurring the line between streetwear and luxury brands. Luxury looked cheap and streetwear looked exceptionally premium. The nadir was Balenciaga’s collaboration with sports apparel brand Under Armour.
Ways forward
Given that the mass growth of luxury products has hit a ceiling, what options do luxury companies have?
The focus has been a slow pivot to services and experiences. For instance, Panerai has the Panerai Xperience Programme where purchasing a limited edition watch gives you access to unique experiences, such as training with US or Italian special forces operators.
LVMH owns three luxury hotel chains: Cheval Blanc, Bulgari Hotels & Resorts, and Belmond. Dior has spas in Cheval Blanc Paris and other non-LVMH hotels like The Dorchester in London. The increasing focus on wellness makes sense for luxury conglomerates.
Given the challenging circumstances in the luxury sector, Infosys’ outlook for luxury wellness presents a tempting opportunity. The global premium and luxury wellness segments have been performing well. The global market for luxury items was valued at approximately $366.2 billion in 2023 and is projected to expand at a CAGR of 6.8% from 2024. By comparison the Swiss watch industry is projected to grow by less than three percent.
Existing high-end health and luxury wellness
Luxury wellness has already been well established, there high end spas and resorts are in numerous countries, in particular Switzerland and Germany. Some of these are within large hotel groups like Mandarin Oriental.
There is also a range of multi-generation family owned businesses with low-key brands and expertise that would be hard to replicate. Some of these businesses may go back as far as the middle ages. For instance, Grand Resort Bad Ragaz can trace its history as a source of ‘health and vitality’ since 1242.
German doctor Alexander Spengler was responsible for attracting rich medical tourists to Switzerland in 1853, convinced of the benefits of clean mountain air.
Switzerland, in particular, started to benefit from an agglomeration of medical expertise; for instance Davos was known for specialising in pulmonary health with dedicated spas.
Switzerland’s continued lead in private healthcare has had a positive knock-on effect in wellness related products and services. This is particularly apropos given Swiss offerings focusing on longevity.
In marketing terms ‘Swiss formula’ is used to sell St Ive’s beauty products and a range of multi-vitamin products by various brands. St Ives has an American origin, being part of Alberto Culver, which was then bought by Unilever.
While Spengler was enamoured with Switzerland, Germany has a long history of health resorts especially thermal spas. It also has a network of world-leading private medical clinics similar to Switzerland.
German high-end health resort company Lanserhof is a relative newcomer. Over four decades they have progressively built their offering with a strong focus on longevity.
Luxury conglomerates have an opportunity, and are used to accumulating small family brands. But it it is a long term project for them to go into the market place. Blurring the line between its beauty products and wellness is an easier ask, hence, Dior’s spa offering.
Gulf countries are looking to provide services in this area and have made big strides in building capability to attract medical tourism, which is the backbone from which a country brand in luxury wellness can be built.
The current luxury wellness space is diverse fragmented and caters for a wide range of health needs from medical to relaxation.
Luxury wellness and consumer behaviours
More people are prioritising their health, taking a holistic view to wellness encompassing both physical, emotional and mental health, what Statista described as ‘omni-wellness’. They are driving demand for products and experiences that support this lifestyle. This includes everything from exercise, self-care, and sobriety to getting private tests run to double-check, or instead of seeing their doctor.
Coming out of COVID-19, there was an increased consumer focus on a number of different aspects of health and wellness:
Sleep quality
Mental health
‘Immune’ health
This intersects with the luxury market as consumers are willing to invest in premium products and services that enhance their well-being.
On the high-end what does luxury wellness look like?
Personalised wellness experiences. Consumers look for customised solutions based on their individual wants and needs. Technology and data enabled brands like L’Oreal and Unilever to offer individual recommendations and drive consumer engagement. Technology integration has been a key enabler.
Health and beauty interconnection. Consumers spend more in products and experiences that enhance their well-being, these are opportunities for the premium and luxury industries. Consumers see well-being products and experiences as an investment in themselves, with the concepts health and beauty as inseparable in their minds, particularly for younger cohorts.
Scientifically-backed products rather than more ‘new age’ or alternative therapies. Consumers have increased interest in beauty innovations that leverage technology and scientific evidence to address their needs. There is a latent demand for evidence around the world, Mintel cited 85% of Indian consumers agreed that beauty brands should provide more scientific evidence to validate their claims. This is notable given the rise over the past decade of guru Baba Ramdev and his brand Patanjali Ayurved that sells traditional products in the personal care category.
Longevity. Silicon Valley has been obsessed with longevity, the go-to example being Bryan Johnson. Kantar claims that a desire for longevity has moved beyond Silicon Valley. Consumers are prioritising longevity; looking for preventative solutions that support wellness at every life stage. This presents opportunities to offer products and services that for specific age-related concerns.
But medicince itself has thrown up a wildcard for the luxury sector including luxury wellness.
GLP-1 changed everything for luxury
I worked on the global launch of a weight management drug that went on to become used more by the rich and famous than the people it was intended for. If I had one a-ha moment, it occurred during an episode of South Park.
“Rich people get Ozempic, poor people get body positivity”
The rate of growth in these drugs is slowing down but not before GLP-1s had affected consumption habits. Size inclusivity that had been making progress in fashion was thrown into reverse.
There is anecdotal evidence that GLP-1 drugs don’t only change the patient’s relationship with food, but also affects enjoyment in general. This has hit premium alcohol sales and high-end restaurants. The idea of ‘lack of desire’ has implications for the concept of luxury in general.
Every trend has a counter-indicator
Trends are never a clean absolute truth. There is almost a Newtonian push in the opposite direction. Political and socially progressive movements begat a corresponding reactionary movement based around online personalities and political populism.
It would be remiss of me if I only showed you one side of the coin on luxury wellness. Haines McGregor have a perspective that claims that self-care has been replaced by indulgence, which feels at odds with the direction of travel for luxury wellness. Examples of indulgent brands include:
Where to start with multisensory marketing | WARC – 61% of consumers looking for brands that can “ignite intense emotions”. Immersive experiences that are holistic tap into people’s emotions and linger in the memory. It’s also an opportunity for using powerful storytelling to communicate a brand story.
How Ozempic is reshaping the resale market | Vogue Business – Poshmark’s data reveals a significant surge in plus-size women’s apparel listings on the platform over the past two years, including a 103 per cent increase in size 3XL listings, 80 per cent in size 4XL, and a 73 per cent rise in size 5XL. The company also reported a 78 per cent increase in new listings mentioning “weight loss” in the title or description as sellers look to get rid of items that no longer fit.
The consequences of the psychoboom are both logical and contradictory. As the Chinese economy has expanded and citizens have grown wealthier, the demands of everyday life have grown in number and kind, expanding from physiological and safety concerns to a desire for love, esteem, and self-actualization. At the same time, such desires run counter to traditional Chinese values like the age-old concept of Confucian filial piety and the relatively new ideology imposed by the Chinese Communist Party (CCP), both of which place the well-being of the collective above the happiness of the individual.
