Mark Read’s second day on the job as WPP CEO started with a results presentation, where he introduced himself as an “insider outsider,” a phrase he said he had heard “ad nauseum” over the last four months while he auditioned for the role.
He seemed pretty relaxed (he didn’t wear a tie, unlike predecessor Martin Sorrell) and exhibited the forensic knowledge of WPP that must have been a big factor in helping him nail the job. It would have taken years for an outsider to be able to rattle off the names of so many minor WPP companies and clients from around the globe.
WPP had some growth to report (0.7 per cent int he second quarter and 0.3 per cent for the year so far), but not enough to prevent shares falling, and Read did not shy away from the challenges he faces:
North America’s difficulties
North America is an acknowledged problem – in 2017 it was down 3.2 per cent and it’s down 0.7 per cent in the first half of 2018 – and the senior leadership there will be on high alert after Read said: “The USA remains tough and we’re working through it. Part of it is specific client losses, but it’s about management, leadership, creative resource, reputation and repositioning. It’s not something that’s going to get solved overnight.”
He was realistic about WPP’s creative performance and said it remains a priority. He talked about marketers moving to digital, but added, “I don’t want to just blame the clients. We need to have stronger creative agencies with stronger reputations that do better work. We need to return our creative agencies to growth as we do the rest of the business.”
Too many companies and brands
“In the future, WPP may be more a company than a group, but it will be a company made up of vibrant brands,” Read said. Merging the big agency groups doesn’t look like it’s on the cards, but closer collaboration and combining capabilities – as Ogilvy and JWT are doing with Unilever’s Sunlight in Africa – is the way forward.
Consolidation of smaller agency brands, however, is very much on the cards. “We have too many companies and brands… People use brands to operate their own fiefdom or opt out of the system,” Read said. “I think there’s a little bit too much of that, so we have to have more consistency in our brands and not let them sprawl. We want enough brands to manage client conflict, but not so many that it makes the business impenetrable to understand.”
WPP has been growing through acquisition and piling up associated debt for years. Read said that acquisitions remain part of the growth strategy, but that he’s “cut the pipeline of things we’re working on quite substantially” and is “laser focused” on companies at the intersections of marketing and technology, to ensure acquisitions can be embedded within the networks to avoid sprawl.
Wieden+Kennedy may have won a brief for a campaign in North America, but Read is not accepting defeat. “By the way,” he said, “We are adapting it, producing it, creating assets around it, implementing it in the dealer channels. So we are heavily involved in a very constructive way.” He added that, as he understands it, the main review is ongoing and no decision has been made.
Kantar sell off
As an under-performer, Kantar has been considered for disposal, but the focus is now on how to “maximise its value.” Read suggested that this could be done through partnerships, which could involve a part sale. He said: “Some of the strategic benefit can be realized without us owning 100 per cent of the company. It’s something that we will be looking at. It’s a process. No decision has been made.”
Read is a big fan of bringing agencies together under one roof, run by country managers. It saves on backroom costs, of course, but he also sees is as a draw for clients and talent. Of WPP’s 131,000 employees, 40,000 will be in co-locations over the next two years. “We want to accelerate the pace of doing that,” Read said. “People internally and externally understand the logic of it.”
Read isn’t satisfied with how WPP uses technology in the day-to-day operations of its business. Sending emails and instant messaging isn’t looking very effective, so he’s planning to invest in a better IT platform. Sounds similar to Publicis Groupe’s Marcel platform, named after its founder, Marcel Bleustein-Blanchet. Not much danger of Read’s version being called Martin.