“India is our best performing market globally for last 10 years. It has been our fifth or sixth biggest market in WPP. If you say one day we will overtake the UK, it wouldn’t surprise me,” Mark Read told Storyboard18 in an exclusive interview. Read is the chief executive officer of the world’s largest ad holding company – WPP, which owns ad agencies and media investments firms such as Ogilvy, Wunderman Thompson, VMLY&R, Mindshare, Essence, Grey Group, Wavemaker. In a exclusive conversation with Storyboard18, Read shares his views on the impact of global political and economic events on business and the state of advertising. He also gives us an insight into what clients are thinking and what they want in addition to his views on the future of work and jobs, and his outlook for 2023.
Edited excerpts.
From wars to government changes, recessionary concerns, and a lot more – how are all of these factors affecting 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 job for our clients. Delivering fantastic creative work. Helping them grow their businesses, do well on e-commerce, building relationships with their customers, manage their reputation, communicate what they are doing and leading their people through difficult time. So there are no particular concerns by the agency leaders.
What are the clients’ concerns? How are they reacting to these uncertain times?
I think the key word is ‘uncertainty’. We had our results a couple of weeks ago and I said on our earnings call, there are very few clients that are catastrophizing the situation for the next year. I think most clients are looking to support their brands and a lot of clients dealing in the inflationary environment are trying to sort price increases. So marketing becomes more important as they are trying 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 agile as an organization and help our clients react to things as they unfold. Opinions on US recession differ. Goldman Sachs have it at 35 percent, most of the people in the US have it at like 75 percent. So, I have slightly sort of given up on predicting the future, my efforts are on how do we respond more quickly to be honest.
Pitches are going back in-person. I am a little bit disappointed by that. I like the fact that we were working and pitching remotely. It saves a lot of money in airfares and it is good for the planet as well. I like to make sure that we continue to use the hybrid model of pitching as well. That is the way forward for our industry.
We do have a predictive question. But first, are clients behaving differently, in terms of media spends or hiring?
The interesting thing is that there has been sort of analog digital split. There is no doubt that Covid accelerated the transition to more digital marketing. But, actually if you see the growth this year it has been a little bit slow in digital media. WPP and our agency players actually grew more quickly in the first six months of the year than Google or Meta, Snap and Twitter. Now, if you said to me 5 years ago that we would grow on top of these companies, I wouldn’t have believed you. This demonstrates the value of what we do, the resilience of our business model, the fact that we tend to work with larger companies, yes they work with large companies but they tend to have a lot of small and medium size businesses- micro entrepreneurs, a lot of VC funded start-up money going into marketing., crypto, etc. I wouldn’t say that there is money being pushed to traditional media but I certainly feel that like everything in life, it’s a balance.
When it comes to hiring I don’t think a lot of clients want to add to the fixed cost.
All four big advertising agency holding groups have raised forecasts for the year, are you suggesting that the conglomerates have so far emerged unscathed by the digital ad market troubles?
I wouldn’t say we are unscathed. I would say WPP isn’t just an advertising company anymore. We are helping clients do public relations, manage their reputation. We are helping clients build mobile applications, help them develop websites, etc. There are a lot of things not just related to advertising on its own. It reflects the breadth and the resilience of our business models.
What’s the scenario on the new business front? Do we expect more pitches in 2023?
We took part in the Coke pitch, I think the biggest review in our industry’s history. We did close to 150 meetings, all of them remotely, on video. What is my view is that the new business line is as strong as it was a year ago, maybe marginally stronger. Pitches are going back in-person. I am a little bit disappointed by that. I like the fact that we were working and pitching remotely. It saves a lot of money in airfares and it is good for the planet as well. I like to make sure that we continue to use the hybrid model of pitching as well. That is the way forward for our industry. Pitching is busy. The Coke pitch – they started with 6000 agencies. There are big pitches underway. They may not all be public but I think it is a busy end to the year. And I think a busy 2023.
Inflation is a tough beast to wrestle with. I think we are cautious about the trajectory of interest rates and I think that is going to be the thing that we will have to watch over the next year.
As interest rates keep rising faster than expected how worried are you now about the outlook for the coming weeks?
Yes, that is my concern. I was old enough to remember the 1970s. Inflation is a tough beast to wrestle with. Typically, interest rates need to further up that people expect to get it under control. So I think that is the challenge that we will face is how high do interest rates have to go up. In the US, you saw inflation coming just under expectation all of a sudden the stock market is up 5% and everyone thinks that the problem is solved and then you get more pressure on inflation. It is a tough thing on the policy maker. We are cautious about the trajectory of interest rates and that is going to be the thing that we will have to watch over the next year.
India is one of your top 5 markets globally. What excites you about the India market?
Firstly, I love India. I am looking forward to coming back next year. We have 11,500 people in the India market. We are at a great position in the market. In Srini (CVL Srinivas) we have a very strong leader for our business. But, we have strong people across our businesses 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 that we do for our clients. The work we did for Mondelez in India won us a Titanium Award at Cannes. That’s one of the most prestigious awards in our industry. It was a collaboration between Ogilvy and Wavemaker and it really shows how combination of creativity, data and tech can produce fantastic results and can win on a world stage. We are serving multinational companies in India and many domestic companies in India. I have learnt a lot from business leaders in India. I have been lucky to meet Sanjiv Mehta. He has been a fantastic client to us. I think the economic outlook for India is strong, it is our best performing market globally for last 10 years. It has been our fifth or sixth biggest market in WPP. If you say one day we will overtake the UK, it wouldn’t surprise me.
You are opening campuses all around the world? What is the strategy behind this and how is it helping WPP?
Look, some people might think we are mad opening offices at a time when people seem more reluctant to come into offices than most CEOs would like. But I think what we are 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 are really bringing 3000-4000 people in a building and sometimes we call it a ‘temple to creativity’. It is a place where people can come, be inspired and collaborate and do their best work. That’s what we have to do if we want more people to spend more time in the office. That is what we want in terms of collaboration, quality of work and quite frankly for people’s mental health as well.
We are cautious on hiring and many companies are cautious on hiring. But I hope we can navigate the next 12 months without having to take massive layoffs across the organization.
How do you see ‘big tech troubles’ impact the advertising business?
The tech troubles are really because of slowdown in revenue growth which is inevitable because when they grow so big they can’t outgrow the market. This is matched with probably over enthusiastic hiring over last one to two years and it is not good for people who have been impacted. But, I think the platforms remain increasingly powerful. What we are pursuing is a result of more innovation or more competition in the market. The impact of TikTok has been to take share away from other platforms. The growth of Amazon, which has also done the same thing. So, I think it is good for our clients 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 sectors. Do you think other companies and sectors will also follow suit in large-scale employee layoffs? Is it an opportunity for the advertising sector to get back its lost talent?
We have got great talent inside our agencies particularly in India. But, I am sure there is great people to work for tech companies if they want to comeback or come to work at WPP then just drop us your CV or resume, we will have a conversation. As an industry we can provide great careers to people to work with some of the world’s largest and biggest brands to really have an impact but also to do something positive for the society.
But, we are cautious on hiring and many companies are cautious on hiring. I hope we can navigate the next 12 months without having to take massive layoffs across the organization.
Cautious on hiring or is there a freeze on hiring?
I would say we are strongly cautious on hiring. We have clients to serve and there are many talented people out there. But I want to be in a situation where when we take somebody on, we are confident that we can keep, train and develop them. I don’t want to see ups and down in that sense when we are hiring.
Finally, what are your expectations from 2023?
It is going to be a challenging start to the year and it will get better as the year goes on.