Prominent Exit From Ad Industry Sets Off Questions About Future

It came as a shock to Madison Avenue in the late 1980s when a British financial whiz named Martin Sorrell came for two pre-eminent American advertising agencies, embarking on hostile takeovers of J. Walter Thompson and the Ogilvy Group on his way to forging a global empire.

Almost three decades later, Mr. Sorrell was again at the center of another earthshaking moment for the industry. A little over a week ago, WPP announced that Mr. Sorrell had abruptly resigned as chief executive, a position that, he told Ken Auletta of The New Yorker last year, he intended to keep “until they shoot me.”

Mr. Sorrell’s exit would be a big deal in the ad and media worlds at any point — the bombastic 73-year-old known as Sir Martin was one of England’s highest-paid executives and was seen by many in the industry as a sort of oracle. But the circumstances of his departure have amplified the attention. Early this month, in announcing an investigation of Mr. Sorrell, WPP’s board said it was looking into “an allegation of personal misconduct,” and Mr. Sorrell, in denying it, said that it involved “financial impropriety.”

Then, less than two weeks later, the company announced his resignation. In its statement, WPP said that its investigation had ended and that “the allegation did not involve amounts that are material.” Mr. Sorrell has declined interview requests since then.

Whatever the details behind Mr. Sorrell’s departure, his removal from his powerful perch has set off an intense debate about the future of the advertising business. Mr. Sorrell had come to represent the era of conglomerate-building that followed the boozy, lavish days of “Mad Men,” but the industry now faces questions about the role of such huge holding companies in a rapidly changing marketing world. WPP’s shares have plunged in the past year amid questions about its growth, and the company recently reported its worst annual sales since the financial crisis and cut its forecast for the year.

“I don’t know the facts behind the investigation,” said Dave Morgan, the founder and chief executive of Simulmedia, which works with advertisers on targeted television ads. “But I suspect that if WPP was on the verge of rekindled growth, Martin would have had the wind at his back and might have fought much harder to stay, and the board probably would have taken much more time to force his hand.”