WPP isn't set for any more radical changes over the next five years, believes its chief executive Mark Read, who has driven a major restructuring of the world's biggest advertising company in his two-and-a-half years steering the ship.
The theme of Read's tenure leading WPP so far has been consolidation. Under his leadership the network has instituted the mergers of VML with Y&R, J Walter Thompson with Wunderman, Geometry with VMLY&R, and most recently, AKQA with Grey. Read also shelved off a major stake in Kantar as part of his broader strategy to cut debt and simplify the global ad agency network.
Then there's the instability caused by Covid-19, as WPP, like its agency peers, was forced to implement cost-cutting measures that included staff redundancies and reducing office space by between 10% and 20% as its revenues slumped by a significant 15.1% in Q2 and 7.6% in Q3 2020.
The tumultous few years has left many questioning where the agency might target consolidation next. Would WPP consider breaking out GroupM, as former WPP boss Sir Martin Sorrell has suggested they do? What's to become of Ogilvy, the only remaining creative shop that hasn't been merged, after it was recently revealed it suffered negative growth from 2014-19?
But in a wide-ranging interview at Campaign x Spikes Asia, Read promised that "we've done the major restructuring that we need to do" and that the shape and structure of the business "will be fairly similar" in five years' time to what it is now.
Instead, he is focusing on making the business "bigger and stronger in Asia", naming China and India as key markets.
"I think that WPP will [be a] more Chinese, Indian, technology and data-driven business," he said, asked how he sees the network in five years' time.
Watch Read's Spikes Asia X Campaign appearance:
When it comes to GroupM, he said he "can't imagine it being carved out" as this jars with his strategy of integration.
"If I look at our pitches today, about a third are creative-only, a third are media-only, and a third are integrated. And everything I hear from clients is that they want media and creative to come close together. So I don't see how it can make any sense to carve these things out, or split these things up," he said. "One of the challenges is how do we bring it even close together, recognising that we're probably not going to merge the organisation."
Holding up his mobile phone to the screen, he said: "What this device is doing is bringing media, creative, commerce, communications extremely closely together in one place, which means that things have to be much better coordinated. So I think that the industrial logic in our business is that things should become more rather than less integrated."
Ogilvy, meanwhile, has a "breadth of resource" from customer experience to commerce that means the future of the business "is particularly strong", especially in Asia, he noted.
Integration continues to be the flavour
While Read said that WPP has stabilised its structure—suggesting there may not be any further major mergers on the cards—integration continues to be a focus.
"Clients are reassessing the types of partners that they want to work with, and they're looking for partners, yes, that have strong creative or ideation capabilities, but they also need to have partners who can help guide them through what's going to be a very transformed by technology environment," he said.
Ecommerce in particular has risen to the top of the agenda, and is leading to a greater number of integrated pitches across WPP, he said.
"Every conversation I have with a CEO or CMO starts and ends with ecommerce. Many clients are congratulating themselves on doing a fantastic job of growing their ecommerce business at a time when you could only buy things online. But what's going to happen when we come out the other side and there are choices? I think that clients are going to be looking for partners that can help them navigate this world," he said. As a consequence, "integration is rising rapidly up the agenda", he said, naming a recent pitch for the $600 million Walgreens Boots Alliance account that had "data and technology at the heart of the review process".
Talent is the biggest challenge
While Read said the network will continue to grow its capabilities in key growth areas such as data and technology and ecommerce, he noted that talent is the biggest challenge to realising this ambition.
"The biggest challenge our industry faces is a talent challenge," he said. "I am obsessed with getting a disproportionate share of the best people in our industry inside WPP, keeping them inside WPP by letting them build their career and helping them to develop."
The war for talent has gotten stronger as the platforms have grown, he noted. "I see many people from WPP in Facebook and Google, and I see not as many people I like from Facebook and Google inside WPP," he said.
"This is the probably the biggest challenge we face, we need to have people who can have those conversations with CMOs about how to transform their business. We have many of them but we need more," he surmised.
Beyond hiring, WPP has been working to upskill its existing workforce with remote training programs, which Read remarks is "one of the positives to come out of the pandemic". WPP certified 20,000 people on three of the major platforms last year, while several hundred of its staff are about to take part in an eight-week Amazon bootcamp. "We should do the same with Alibaba as well," he suggested.
Platforms are not 'frenemies'
Earlier this month, WPP struck a global partnership with TikTok focused on developing new ad products on the video-sharing platform while bolstering its brand-safety measures. TikTok will also provide WPP advertisers with exclusive opportunities.
In response to an audience question, Read said he sees tech platforms as "partners" rather than "frenemies", a term used in time's past when platforms were more guarded and less collaborative.
"There are some analysts think that WPP is being disintermediated by these platforms, to my mind they are the biggest growth drivers of activity in our industry," Read remarked. "So the more that Google or Facebook or TikTok grow the better it is for WPP."
"Now it is also better for WPP and indeed for our clients that there are choices—we don't want to have a monopoly or duopoly. One of reasons we did deal with TikTok was to make sure that clients had a really good understanding of what's a massively rapidly growing platform and that we can work with them."
Finally to everyone's favourite gossipy topic...
Of course, it's relations between Read and predecessor and WPP founder Sorrell. Our readers may be disappointed to hear that Read isn't one to respond to or dish out critiques. Asked how irritated he gets with Sorrell's sniping and stirring in the media, Read said: "Not all at irritated, we have a good laugh about it."
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