Mark Read, Managing Director of WPP
“India has been our best performing market in the world for 10 years. It has been our fifth or sixth biggest market in WPP. If you say that one day we will overtake the UK, that would not surprise me”, Mark Read told Storyboard18 in an exclusive interview. Read is the managing director of the world’s largest advertising holding company – WPP, which owns advertising agencies and media investment companies such as Ogilvy, Wunderman Thompson , VMLY&R, Mindshare, Essence, Gray Group, Wavemaker. In an exclusive conversation with Storyboard18, Read shares his perspective on the impact of global political and economic events on business and the state of advertising. He also gives us insight into what customers think and want, plus his vision for the future of work and jobs, and his outlook for 2023.
From wars to government changes, recession concerns and more, how do all of these factors affect the business? What are some of the biggest concerns you’ve heard from agency leaders in the WPP ecosystem?
Our agency leaders are focused on doing great work for our clients. Deliver fantastic creative work. Helping them grow their business, succeed in e-commerce, build relationships with their customers, manage their reputation, communicate what they do, and guide their employees through difficult times. There is therefore no particular concern on the part of the leaders of the agency.
What are the customer concerns? How are they reacting in these uncertain times?
I think the key word is “uncertainty”. We had our results a few weeks ago and I said on our results call, there are very few customers catastrophizing for next year. I think most customers are looking to support their brands and many customers facing an inflationary environment are trying to manage price increases. Marketing therefore becomes more important as they try to innovate, to be on the side of the consumer. So they have to communicate with their customers. At the same time, they face headwinds around the world. Uncertainty is the name of the game. And we have to be nimble as an organization and help our customers react to things as they unfold. Opinions on the US recession diverge. Goldman Sachs has it at 35%, most people in the US have it at around 75%. So I’ve kind of given up on predicting the future, my focus is on how to react faster to be honest.
We have a predictive question. But first, are customers behaving differently, in terms of media spend or hiring?
What is interesting is that there has been a kind of digital analog separation. There is no doubt that Covid has accelerated the transition to more digital marketing. But, actually, if you see the growth this year, it’s been a bit slow in digital media. WPP and our agency players actually grew faster in the first six months of the year than Google or Meta, Snap and Twitter. Now, if you had told me 5 years ago that we would grow above these companies, I wouldn’t have believed you. It demonstrates the value of what we do, the resilience of our business model, the fact that we tend to work with bigger companies, yes they work with big companies but they tend to have a lot of small and medium sized companies – micro entrepreneurs, lots of VC funded start-up money goes into marketing, crypto etc. I wouldn’t say there’s money being pushed into mainstream media, but I certainly think like everything in life, it’s a balance.
When it comes to hiring, I don’t think many clients want to increase the fixed cost.
All four major ad agency holding groups have raised their forecasts for the year, are you suggesting the conglomerates have so far emerged unscathed from problems in the digital advertising market?
I wouldn’t say we are unscathed. I would say that WPP is no longer just an advertising agency. We help clients to do public relations, to manage their reputation. We help clients create mobile applications, help them develop websites, etc. There are many things that are not just related to advertising per se. It reflects the breadth and resilience of our business models.
Pitches are resuming in person. I’m a little disappointed with that. I like the fact that we work and pitch remotely. It saves a lot of money on plane tickets and it’s also good for the planet. I like to make sure we continue to use the hybrid pitching model as well. This is the way forward for our industry.
What is the scenario on the new business front? Are we expecting more land in 2023?
We participated in the Coke pitch, I think the biggest review in the history of our industry. We held nearly 150 meetings, all remotely, by video. In my view, the new line of business is as strong as it was a year ago, maybe slightly stronger. Pitches are resuming in person. I’m a little disappointed with that. I like the fact that we work and pitch remotely. It saves a lot of money on plane tickets and it’s also good for the planet. I like to make sure we continue to use the hybrid pitching model as well. This is the way forward for our industry. The pitching is busy. The Coke pitch – they started with 6000 agencies. There are great plots in progress. They may not all be public, but I think it’s a busy end of the year. And I’m thinking of a busy 2023.
As interest rates continue to rise faster than expected, how worried are you about the outlook for the coming weeks?
Yes, that’s my concern. I was old enough to remember the 1970s. Inflation is a tough beast to fight. Typically, interest rates need to rise further for people to expect them to be under control. So I think the challenge we will face is how high interest rates should go. In the United States you’ve seen inflation come in just below expectations, all of a sudden the stock market is up 5% and everyone thinks the problem is solved, then you get more pressure on inflation. This is a difficult thing for the policy maker. We are cautious about the path of interest rates and that is what we will have to watch over the next year.
India is one of your top 5 markets globally. What excites you about the Indian market?
First of all, I love India. Can’t wait to come back next year. We have 11,500 people in the Indian market. We are at an excellent position in the market. At Srini (CVL Srinivas), we have a very strong leader for our company. But, we have strong people in our companies who are fantastic. Creative leaders like Piyush Pandey. The work we do for our clients is so impactful. I can go on about the reasons to be proud. I am proud of the work we do for our clients. The work we did for Mondelez in India won us a Titanium Award at Cannes. It is one of the most prestigious awards in our industry. It was a collaboration between Ogilvy and Wavemaker and it really shows how the combination of creativity, data and technology can produce fantastic results and win on the world stage. We serve multinational companies in India and many national companies in India. I learned a lot from business leaders in India. I had the chance to meet Sanjiv Mehta. He has been a fantastic client for us. I think India’s economic outlook is strong, it’s been our best performing market in the world for 10 years. This has been our fifth or sixth largest market in WPP. If you say that one day we will overtake the UK, that would not surprise me.
Are you opening campuses all over the world? What is the strategy behind this and how does it help WPP?
Look, some people might think we’re crazy for opening offices at a time when people seem more reluctant to come into offices than most CEOs would like. But I think what we’re trying to do is create a place where we can attract the best talent, where our clients could see the best talent, that talent could work together and collaborate. We have fantastic campuses in Mumbai and Gurgaon, they really put 3,000 to 4,000 people in one building and sometimes we call it a ‘temple of creativity’. It’s a place where people can come, be inspired, collaborate and do their best. This is what we need to do if we want more people to spend more time in the office. That’s what we want in terms of collaboration, quality of work and quite frankly for people’s mental health as well.
How do you see the impact of “major technology issues” on the advertising industry?
Technology issues are actually caused by slowing revenue growth, which is inevitable because when they get so big, they can’t overtake the market. This goes hand in hand with probably over-enthusiastic hiring over the past two years and it’s not good for the people who have been affected. But, I think the platforms are still getting more and more powerful. What we pursue is the result of greater innovation or greater competition in the marketplace. The impact of TikTok has been to take shares from other platforms. The growth of Amazon, which also did the same. So I think it’s good for our customers to have more competition, to have more options, to have different ways to reach the consumer.
Layoffs at Twitter, Meta, Amazon and impact on other industries. Do you think other companies and sectors will also follow in massive layoffs? Is this an opportunity for the advertising sector to recover its lost talent?
We have great talents within our agencies, especially in India. But, I’m sure there are great people out there to work for tech companies if they want to come back or come to work at WPP, so just send us your resume or resume, we’ll have a conversation. As an industry, we can offer great careers to people who work with some of the biggest and biggest brands in the world to really make an impact, but also to do something positive for society.
But, we are hiring cautious and many companies are hiring cautious. Hopefully we can navigate the next 12 months without having to make mass layoffs across the organization.
Careful hiring or is there a hiring freeze?
I would say that we are very careful when it comes to hiring. We have customers to serve and there are a lot of talented people. But I want to be in a situation where when we hire someone, we are confident that we can keep them, train them and develop them. I don’t want to see ups and downs in that direction when we hire.
Finally, what are your expectations from 2023?
It’s going to be a tough start to the year and it’s going to get better as the year progresses.