Interesting interview with WPP CEO Mark Read in yesterday’s Sunday Times (subscription required to get behind its hefty paywall) with Read, as he does, bigging up the benefits of AI to his business and the wider ad community.
It seems that in Read’s presence you get a live demonstration of its Open’s AI capabilities, not something you necessarily expect from a CEO. WPP is investing heavily in AI, it’s just bought infoSum to add to its repertoire. InfoSum, it seems, also brings a first party data element, something WPP’s been lacking against the Epsilon-fuelled Publicis Groupe and, possibly, a merged Omnicom/IPG.
So far so good but is it a strategy of just a version of what everyone is doing or trying to do? After all, there seems to be something new in AI on a daily basis so it’s not very likely that one ad holding company can gain an enduring lead.
In practical terms Read will be hoping that there are some discernible benefits from its Open system when he reports first quarter earnings at the end of April. He’s been careful to play down expectations with a forecast of little or no growth in the first part of 2025 but the market will be expecting some light at the end of what’s turning out to be a pretty long tunnel.
AI will undoubtedly save agencies of all sizes a ton of money (not least via redundancies) and WPP’s headcount is steadily reducing. But clients too will be well aware of these possibilities and, ungrateful so-and-so’s as they are, expecting fee reductions in return.
My AI is better than yours doesn’t seem a very credible strategy – more the cost of staying in the game.
PS In the interview with William Turville Read expressed surprise that it was a profile as well as a piece about the company. Hope a WPP PR Person didn’t cop one accordingly. In the personal box that goes with such pieces, Read says his favourite music is Dire Straits, which for a person of his vintage may well be the case. These choices can be hilarious (representing what the PR department thinks is the most acceptable-to-everyone choice.) It can backfire disastrously too: back in the day PM David Cameron told BBC Radio’s Desert Island Discs that one of his choices was Benny Hill’s ‘Ernie, the fastest milkman in the west.’ Some Bullingdon Club muppet obviously told posh Dave this would demonstrate his common touch.
PPS
Seems that there still aren’t enough desks at WPP HQ for all those staff returning to the office under orders from April. Maybe AI can help?
Spot on as ever Stephen.
The AI hype is uncannily reminiscent of the fallacy identified by Nicholas Carr’s seminal HBR article “IT Doesn’t Matter” (from over 2 decades ago!)
“Behind the change in thinking lies a simple assumption: that as IT’s potency and ubiquity have increased, so too has its strategic value. It’s a reasonable assumption, even an intuitive one. But it’s mistaken. What makes a resource truly strategic—what gives it the capacity to be the basis for a sustained competitive advantage—is not ubiquity but scarcity. You only gain an edge over rivals by having or doing something that they can’t have or do. By now, the core functions of IT—data storage, data processing, and data transport—have become available and affordable to all. Their very power and presence have begun to transform them from potentially strategic resources into commodity factors of production. They are becoming costs of doing business that must be paid by all but provide distinction to none.”
Interested MAA readers can read the whole piece online – doesn’t seem to be paywalled these days.
Dire Straits indeed.