Sir Martin Sorrell, CEO of WPP, said on Friday that if Verizon-owned AOL swooped to buy Yahoo, the merged company could become the advertising holding group’s third-biggest internet advertising investment.
Yahoo’s board is currently exploring “strategic alternatives” to spinning off its core business, including a sale. Interested parties in acquiring Yahoo include Verizon, Comcast, AT&T and private equity buyers like Bain Capital, KKR and TPG, according to Bloomberg.
During WPP’s fourth-quarter earnings presentation, Sorrell explained that WPP spent (on behalf of its clients) $430 million on advertising with Yahoo in 2015.
Meanwhile, the company spent around $225 million on advertising with Microsoft. Mid-way through last year, AOL absorbed the direct sales of Microsoft display ads.
Sorrell didn’t touch on spend with AOL, but he told us earlier this year that spend with the company in 2015 was likely to reach between $100-125 million.
Combined, WPP’s spend on Verizon/AOL/Yahoo, therefore, would have reached ~$750 million. Sorrell said it would instantly transform into a strong “third force,” behind Facebook and Google.
Significantly, it means the company could at some point become WPP’s third-largest media investment.
Here’s how WPP’s $80 billion media spending played out last year:
Google: $4 billion (up 38%, from $2.9 billion in 2014 — Sorrell added it will hit more than $5 billion in 2016)
News Corp/Fox: $2.5 billion (N/A)
Facebook: $1 billion (up 56%, from $640 million in 2014)
“Most traditional media”: Between $750 million to $1.75 billion
Yahoo: $430 million (flat or slightly up on $400 million in 2014)
Twitter: $250 million (up on $150 million in 2014)
Microsoft: $225 million
AOL: $100 million to $125 million (flat or slightly up on $100 million in 2014)
Snapchat: “Much smaller”
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