WPP Scangroup, once a leading name in Kenya’s advertising and communications sector, is now grappling with one of its most challenging phases.
- •Following two profit warnings, a plummeting share price and a significant loss of clients, the company finds itself at a critical juncture.
- •Insights from multiple interviews with insiders and industry executives shed light on the root causes of the company’s troubles, including allegations of mismanagement, loss of key talent, and a failur to adapt to industry shifts.
- •This week, the company CEO exited the company, and COO Miriam Kaggwa is set to take over as interim leader as the advertising giant hunts for a new CEO to help recover its fortunes. Read More.
Talent Exodus & Leadership Missteps
An insider who requested anonymity to speak freely attributes the company’s woes to a series of missteps that began with the departure of key talent. “The problem with Scangroup started when they fired their key people and talent,” said the insider.
The insiders also pointed out that the appointment of Patricia Ithau as CEO was misaligned with the company’s operational needs. “Patricia didn’t understand how the industry works. Scangroup is about creatives, and she didn’t know how to manage this creative talent.”
The situation worsened when Ithau decided to merge two of the company’s revenue-driving divisions—Scangroup and Squad Digital—without adequately considering their distinct operations. This restructuring led to the exit of crucial tech talent from Squad Digital, leaving clients unsupported and triggering an exodus of major accounts.
Further compounding the issue, Ithau’s decision to provide severance packages to laid-off executives inadvertently fueled competition.
“At least seven new PR and advertising agencies in the market are run by former WPP Scangroup executives,” another senior insider explained. These agencies, staffed by top talent and armed with insider knowledge, have since captured significant market share and taken over key accounts.
In one quarter, WPP Scangroup has lost several major clients—institutions that had been with the company for over two decades—further exacerbating the financial strain and highlighting the ongoing fallout from its leadership challenges. It then publicly lost Airtel Africa as a client after 15 years. Read More.
Abandonment of Tech Ambitions
WPP Scangroup’s failure to embrace the digital shift has also been a critical misstep. The company had invested in tech-driven products such as Goby, an e-commerce platform for SMEs, and Optimus, an automated marketing service. These initiatives showed some promise, with Optimus alone contributing KSh 300 million to the revenue line.
However, Ithau reportedly shelved these projects, abandoning the company’s tech-first ambitions. “Once Patricia fired the key tech talent, there was no one left to continue working on these products or servicing their clients,” said an executive who has since left the institution. This decision not only alienated clients but also eroded the company’s competitive edge in a rapidly evolving digital landscape.
WPP’s Governance Challenges
Another senior executive also highlighted systemic issues stemming from WPP’s global governance model. The parent company, which owns a majority stake in Scangroup, has been accused of interference and mismanagement.
“WPP has a history of problematic leadership changes,” the insider noted. For example, in 2018, WPP’s founder Martin Sorrell was ousted under controversial circumstances, causing a leadership vacuum. Similarly, in Kenya, former Scangroup CEO Bharat Thakrar’s dismissal led to prolonged legal battles and reputational harm. The fallout from these disputes has eroded stakeholder confidence.
Thakrar, who has since taken legal action against WPP, alleges neo-colonialist practices and discrimination in court documents seen by The Kenyan Wall Street. His lawsuit seeks KSh 4.3 billion in damages and has further tarnished the company’s reputation. The handling of Thakrar’s exit, coupled with the dismissal of other executives, has drawn scrutiny from Kenya’s Office of the Data Protection Commissioner, resulting in financial penalties and ongoing legal battles.
Calls and text to Thakrar went answered.
Controversial Exit of Kenya MD in 2024
According to an email to staff seen by The Kenyan Wall Street, CEO Patricia Ithau wrote, “I would like to inform you that Grace Waweru, Managing Director, is leaving Scanad Kenya Limited to pursue other opportunities. The company wishes Grace well in her future endeavors. We will ensure a smooth transition and keep you informed of any other developments regarding the leadership structure in the coming days.”
However, insiders claim her departure was less amicable than portrayed, with allegations of her being hounded out and her equipment confiscated unceremoniously, further damaging employee morale and the company’s reputation.
Bleak Financial Outlook
With the loss of major clients and continued operational disruptions, WPP Scangroup has been forced to dip into its reserves to stay afloat. According to another insider, this is not sustainable: “It’s only a matter of time before they deplete the retained earnings and shut shop.”
The company’s board is now seeking a new CEO to replace Ithau, whose term ended in March 2025. Whether this leadership change will restore stability and refocus the company’s strategy remains uncertain. The next CEO will be faced with reviewing the firm’s strategy as it battles declining ad spending, competition for digital work from consultants and the threat of its former executives who formed competing businesses.
The company’s share price recently hit an all-time low of KSh 1.80, a dramatic fall from its 2013 peak of over KSh 70, reflecting investors’ dwindling confidence in the business. Data from the Financial Times paints a stark picture of this decline.
