The world's largest communications services group, WPP plc WPPGY, recently announced that it has entered into a strategic collaboration with a leading Chinese provider of Internet value added services, Tencent, to create a social innovation and ideation lab. The two companies have inked a memorandum of understanding (MOU) relating to this alliance.
About Tencent
Headquartered in Nanshan District, Shenzhen, Tencent is one of the largest Internet companies in the world. Its subsidiaries provide media, entertainment, Internet and mobile phone value-added services and operate online advertising services in China. Tencent strives to evolve with the Internet by investing in new projects.
The Strategic Alliance
The “China Social Marketing Lab” will merge Tencent’s strengths in the local online space and WPP’s global marketing expertise to develop enhanced solutions to cater to clients and target audiences. The aim is to conceptualize social ideas and campaigns for Tencent’s QQ and Weixin/WeChat platforms through mutual knowledge sharing involving technology, analytics and creative skills.
This collaboration will strengthen WPP’s footprint in China and create innovative products for better engaging of end users.
The alliance will be fruitful for both companies as both are proven experts in their fields. This is also likely to drive profitability at both WPP and Tencent.
WPP’s Strategic Focus
Based in Ireland, WPP, together with its subsidiaries, provides advertising and communication services worldwide. The company operates through a number of established global, multinational and national advertising and marketing services companies.
Acquisitions and mergers have been the company’s primary tool to strengthen its foothold in new and emerging markets. WPP completed 52 acquisitions worldwide, across the entire spectrum of its business in 2015. Of these, 18 acquisitions and investments were in new markets, 37 in quantitative and digital and 8 were driven by individual client or agency needs. The acquisitions were in accordance with the company’s strategic focus on new markets, new media and data investment management. These acquisitions and collaborations will help WPP in leveraging its substantial technology assets and stay ahead of the curve in this dynamic industry.
WPP carries a Zacks Rank #3 (Hold). Some better-ranked stocks worth a look include US Ecology, Inc. ECOL, ExamWorks Group, Inc. EXAM and ABM Industries Incorporated ABM. All three stocks carry a Zacks Rank #2 (Buy).
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