The world’s biggest media buyer says TV is “as important as it’s ever been” for advertisers, despite the continued growth of the internet and social media during the coronavirus pandemic.
TV is “still the best place to reach people at scale and there’s nothing like it” because of its high levels of trust and brand safety.
That’s according to Christian Juhl, the global chief executive of GroupM, the media-buying arm of WPP, which controls about $63 billion in adspend for brands such as Google, Nike, Procter & Gamble and Unilever and has close to 35,000 staff.
Juhl, who stepped up from chief executive of Essence to his current role in October 2019, said in an interview with Campaign that “GroupM wasn’t a great place to work a year and a half ago” and claimed his efforts to modernise the organisation and turn it into “more like a software company” are making progress.
The GroupM chief, who was speaking from his home on the West Coast of America, added he is “optimistic” about a recovery in 2021 and defended his decision to sack Nick Emery, the global chief executive of Mindshare, in October for going to the lavatory as a prank during a video call with his leadership team.
'GroupM will look more like a software company'
Juhl has a digital background and used to run Essence, which was bought by WPP in 2015 and is now one of four networks in GroupM, along with bigger siblings MediaCom, Mindshare and Wavemaker, plus programmatic arm Xaxis.
His ambition is to “build a more insightful, creative, technologically-driven media organisation at the GroupM level that the agencies can access”, Juhl said.
“Essence was really formative for me in their use of technology and software as an OS [operating system] for the agency and I think GroupM can do the same.
“Five years from now, if I am successful, GroupM will look more like a software company than it will a media agency. It will automate, it will have really hard technology connections with the major media providers in the world.
“We will have more people doing programmatic and AI and algorithmic optimisations than we will have sending IOs [traditional insertion orders for ads].”
He added that he likes to think of GroupM as becoming more of “a big box of technology and wires and automation” than it is today.
GroupM, like other media buyers, suffered during the worst of the coronavirus lockdowns.
Revenues plunged about “17-18% or so” but there was “a strong recovery” with a decline of only 4% in Q3, according to John Rogers, chief financial officer of WPP, speaking at the parent company’s last quarterly results.
Xaxis had a “pretty remarkable turnaround” as it swung from a 30% decline in Q2 to a 12% increase in Q3.
“A lot of that is driven by the fact that programmatic campaigns are easier, quicker, to turn on, as the economies have started to recover,” Rogers said, noting that there was “particularly strong growth” in “omni-channel video” and “influencer”.
As Juhl looks across his client portfolio, there are a number of categories such as consumer packaged goods, ecommerce and technology that have done well during Covid-19.
“Altogether, we have been able to withstand this probably better than the most,” he maintained.
But Juhl admitted changes, including remote working, have shown that agencies can work more efficiently and don’t need such a large geographical footprint.
GroupM currently has 120 locations in more than 80 countries but that “doesn’t seem really efficient”.
Juhl said it makes sense for GroupM to operate all of its agency brands in key markets such as the US, UK and Germany but when it comes to some smaller markets, he wonders: “Do we need five agencies?”
WPP recently merged AKQA and Grey globally and Juhl said GroupM faces similar questions.
“Essence is amazing but it’s not scaled. It’s definitely sub-scale. We have got three major, global networks [MediaCom, Mindshare and Wavemaker] that are super-scaled. So, at some point, you have to think about things like that.”
'TV is still the best place to reach people at scale'
Media habits have been changing during the pandemic—with video consumption “going through the roof” and more consumers shopping online while cinema and out of home have been “obvious losers” in the short term.
The overall picture is positive because “general media consumption continues to go up”, Juhl said. “You’re seeing TV continue to be increasingly important—it’s really the rise of OTT [over the top, internet-delivered TV] and paywalls and subscribers.”
There are challenges because of the rise of non-commercial video but TV is still essential for advertisers.
“The reality is it’s still the best place to reach people at scale and there’s just nothing like it,” Juhl said. “The trust that exists in the networks—the amount of brand safety you can ensure—is something that is only becoming more important right now. We will continue to pay premiums for the scale it provides.
“GroupM is doing a good job of managing the increases that the networks are trying to put through. And the networks are doing a better job—not a good job—of trying to put a full package in front of brands so that they can include their streaming services, their bundled services, a little bit more fluidity in how we buy upfronts and things like that.”
'We have a responsibility with our size'
Essence has a mantra about making advertising better and Juhl has brought that thinking to GroupM as the biggest buyer.
“I want us to use that scale not just to drive discounts for our clients but actually—and I know this sounds lofty—I would like to make advertising better,” he said.
“We have a responsibility with our size to support good journalism, to support good reporting. It is hard to weigh in on exactly what good is. But we all agree that it can be better than where it is today.
“When we’re just measuring reach or frequency or cost per conversion and we’re not adding in some of these other things—whether it’s sustainability, whether it’s ethics, whether it responsible journalism—then I don’t think we’re doing as good as we could do.
“We should tell our clients—the places [where] you’re buying, this is how they [these media owners and platforms] think about these things and if you want to add those in to your relative scores of how effective they are, we think you should and we think you should be able to do that. And we think your consumers should know you are doing that.”
Improving the media supply chain “matters” to a growing number of clients, he added. “They really want to buy media from companies that subscribe to their code of behaviours.”
What about the role of Google and Facebook, the world’s two biggest media owners, which continue to face questions about brand safety and fake news and are both GroupM clients?
Google and Facebook “want to do better” and their own marketing teams are “very critical of themselves”, Juhl said. “I do believe Facebook wants to clean the platform up and make it a safer environment. I do believe Google wants to do more with YouTube and make the algorithm smarter and wants to remove these things.”
A realignment, not a clear-out, of talent
Juhl appears to have presided over something of a clear-out at GroupM with a string of senior departures before and during Covid.
“I wouldn’t call it a clear-out—I would call it a realignment,” he said, but there has been a lot of upheaval.
All of the four network agency CEOs and all of GroupM’s regional leadership have changed since he took over.
Juhl has 22 direct reports and 18 of them are either new or have moved into different positions.
One pitch consultant, who declined to be named, said it “hasn't seen an enormous difference” in the offer from GroupM's agencies since Juhl took charge.
However, changing the people is just the start of Juhl's plan to modernise the group and make it more of a software company.
The GroupM CEO said he has spent the first year or so in charge “understanding all the different operating systems around the world and picking a common operating system and getting people aligned behind that.
“And people who didn’t want to align behind that, giving them the opportunity to do something else. That’s the fundamental realignment the company has gone through.”
Now, GroupM has “14 workstreams that we are developing globally,” he explained. “They are really all designed to create a common operating system for GroupM—one way to do search, one way to do programmatic, one way to do social, one way to do planning.
“We’re developing and deploying those tools globally. We’ll have hubs around the world to deliver them efficiently and keep iterating on them. I think of it as GroupM 1.0 [which] will be launched in the middle of 2021.”
Then, over time, the software and tools will be updated with “1.1, 1.2, 1.3”, he said, likening it to regular OS updates on a mobile phone.
“But you can’t do that if you’ve got 80 competing interests around the world which is kind of what GroupM had.”
The role of agency brands
A perennial question remains what happens to the agency brands but Juhl is adamant that they still have an important role.
“They are the front doors to our clients,” he said. “They have the responsibility to understand our clients’ growth plans, to help optimise strategies, to help understand where they need to be and in what type of markets.”
Juhl also uses a car metaphor to describe the agencies: “They are driving the machine but I don’t think they should be designing the chasis of the machine.
"They should be setting the direction and investing more heavily in strategy and client leaders that have worked in that vertical, that know their competitors inside and out, that really understand creative and how to work with the creative agencies more closely, that understand ecommerce and CRM.
“You start to blend all of these things together, especially how fast it’s all evolved during Covid. You’ve got companies like Unilever, P&G, Nike—they’re all in a rush to migrate to ecommerce and direct to consumer, they used to rely so much on retail.
“The agencies are the front door to that understanding and can really help drive those strategies and figure out where that next dollar should go and then GroupM can help deliver that in the most effective manner possible.”
Are the agencies all front doors into one building? “I’ll go with houses on the same street,” he said.
'Simple' decision to dismiss Emery
Juhl made headlines in October when he announced the sacking of Nick Emery from Mindshare for “inappropriate and offensive behaviour”, although GroupM and WPP have never confirmed any details about the video call incident.
He said he has no regrets about the decision to dismiss Emery, who spent 23 years building Mindshare since its launch.
“If we’re going to be a company that allows people to be who they want to be, that stands up for diversity and inclusion and a code of ethics and responsible leadership, then when that code is broken at any level, you have to take action—it’s just that simple,” Juhl said.
“For me, this was a very, very easy decision to make. It’s unfortunate. Nick has done a lot of really good things in his career and built an amazing company. But he had a lapse of judgement.
“At that level—he sat on the WPP executive committee, plus the GroupM executive committee—it’s even more important that you show good judgement at all times. I would hold myself to the same standards or any of our leaders.”
'2021 should be a good year'
Juhl is likely to have made a lot of money from the sale of Essence—the three Britons who founded the agency in 2005 have all stepped away—so why does he do the GroupM role?
“I like this job,” he said, albeit “not every day” and “I have certainly been isolated out on the West Coast” because of Covid.
“The chance to do something—when I talked about making advertising work better—is good. As much as the team has turned over in the last year, I love the people that I get to work with now.
“We have built a team across GroupM that is working really well and I like the transformation that we are seeing.”
He added: “GroupM wasn’t a great place to work a year and a half ago. It was competitive—the fight was inside. It’s been fun to turn that. If I can do this and change this company the way I want to do it, that’s a good achievement—it opens up a lot of other doors, whatever those might be.”
Juhl was speaking ahead of the release of GroupM’s end-of-year ad forecasts, which will be published in early December, and “2021 should be a good year” if coronavirus vaccines take effect, travel and hospitality return and there is “pent-up demand for social interaction”, he said. “You could see a really vibrant, exciting year.”