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00:00In 1971, wire and plastic products PLC made shopping baskets. In 2022. WPP, as it's now known, as the biggest advertising firm on the planet. Sometime between then and now, specifically 1989, Mark Reed walked through the doors and played a starring role in that transformation. In 2018, Reed became chief executive of a firm in crisis. The man who had made the giant. Martin Sorrell had stepped down. Today we speak to Mark Reed about a new age of advertising and how to run a business fit for the 21st century. Mark, thank you so much for joining us on leaders would like. Well, what does it mean being an ad man? AD leader in 2022? Well, I mean, our industries it's such a interesting phase, isn't it? We've just been through the pandemic. We've come out, I think, in many ways ever, ever more relevant. But we face a whole period of continued innovation in industry with new advertising formats, new digital companies being launched, e-commerce taking off overseas, changing changes over time is changing now. I think more than ever. But if you look at the pace of change over the last 10 years, I mean, it's been incredible. Can you go through the same pace of change in the next 10 years? I think so. I mean, look, we're the company of a hundred thousand people around the world. We try to also have the heart, if you like, the small company to be very responsive. How people day to day working on individual clients, working on client, please. So I think that is that trick. Is it how we get the scale of it big company, but also how we operate quickly and nimbly. Other rivals are very focused on spending and tech. What's the future for WPP? Well, I think what makes WPP special is creativity. It's ideas without ideas. There's nothing on these tech platforms. What would that be on Facebook or Instagram or YouTube without creative work and creative ideas and all the things that creative people flourish? I think that creativity is what makes WPP distinctive and kind of where we want to invest. Now, of course, with technology, how we bring those ideas to life, where they live, where they exist, that's changing very quickly. So it's really about sort of building up what we could call the traditional skills, if you like, to the past, but blended in with a real understanding of data and technology that you need in the future. So your role is changing, I guess. Is it still just pure advertising or is it more advising clients and kind of navigating these uncertain times? WPP is much more of an advertising company today than we used to be. Clearly, advertising is important to what we do. And you start with I think when I go to customs, the customer said, what do you do? I say, look, in advertising. But actually WB is much, much more than an advertising company today, which is likely to be asked by a client. How do I succeed on Amazon as we are? What do you think of this television ad? So we've had to learn a tremendous number of new skills over the last 10 years, as you say. What happens the next five years in what are is it going to be Amazon? Is it going to be Twitter's or something else? That will be the hot new thing? There's one good thing that we don't need to make. We don't need to make those decisions. Consumers will decide and we need to be where consumers are. So it's our job, I think, to understand all of those platforms and help our clients understand what's most relevant. Where can they reach their consumers most effectively? What's going to deliver the higher return on investment? You have a data and technology, in fact, driven today. So it's both the creative idea, but also the financial returns are important. How did you end up in advertising? Well, I sort of by mistake, like many great things, a bad mistake. When I left university, I didn't veto what I wanted to do. I wrote to a few sort of business leaders and companies and I ended up working at WPP in the very early days. And I think when I started, I never thought I'd end up sort of sitting in this seat. If you like to know, what would you like most about your job? I think that the people I mean, ultimately were a people business. We have clients who are people. We have creatives who are people. We have technologists who are people. And a lot of what my job is as a CEO of the company is to give those people sort of motivation to tell them where we're going to encourage them to come up and do their best work, to encourage them to collaborate. But ultimately, you know, the job is as much sort of sometimes you think you're almost a psychologist is you are a business leader. I think sometimes. And so what's your best piece of advice? I don't know if it's psychological terms, but if there's a deal that you need to get an account that you need to get that you're worried will go to to a rival. What's your pep talk like? Pep talk? Well, I love pitches. I love being sort of leading from the front, if you like, and spending time with teams that have to see the work that we're doing when we pitch the piece of your business often when we come together. So I guess I try to put myself in the seat of the client. And what's the client going to think when they see this work? Are they going to be excited? Is it going to turn their brand around? How is it's going to resonate with their consumers as much as possible? Poppy, I try and play that role. So how have clients changed, actually, over the years that you've been in advertising? Do they ask for different services now because the challenges are so much bigger? I think clients have a have a tough time today. We never lived through a period of so many crises. They're trying to manage it. Enormous budgets, fast global enterprises, they need trusted advisers. And I think that's kind of, in a sense, what they're looking to WPP, into our agencies and to our people to bring a real sense of if we do this. What would the impact be from packaging through to advertising through to public relations to design and then in many, many new skills to the days of old, if you like, you know, a lot of this was a matter of judgment. Now we're much more data driven than we used to be. We'll look at market research figures. What measure? The return on investment, we use digital media in that way as well, so they become much more analytically driven than perhaps they used to be. What's the biggest challenge going forward is that if you look at some of the technology companies, Twitter, Facebook, is that still where the future lies? Was interesting. In the first six months of this year, if you look at WPP, it's actually growing more quickly than the average of the force of tech ad companies. Google better SNAP and Twitter. So in a funny way, the challenges they face to somewhat different from the challenges that we face. We tend to have bigger, more global clients. We're not so reliant on venture capital funded startups. So I think we actually were in coming to the future really in quite a good position. And actually there could be a lot of opportunities for us. Who do you see as your biggest rival? You know, we compete with our traditional rivals. We compete with the consulting companies. We compete with some client to try to do some of this work in-house so that the great thing about our interests is always been competitive. You know, to people in a garage can start up an agency they have done over many years. But I think that for the major clients that we service today, we're in a really we're in a really good position. You know, we just came off the back, but a year ago winning the global mandate for the Coca-Cola Company, and they looked out and tested every element of what we do as a business from company to develop great creative work in China or India or South Africa to can we embrace the media revolution to come. We shouldn't have to partner with Facebook and Google and how to embrace ticktock and every part of our business and selected us as their partner. That talks to the sort of power we have on the scale that we have is. Is it more difficult now because the cost of living crisis, because of the economic downturn? Do you start feeling it already? I think as I speak to you today, I think clients spend is is amazingly resilient, actually. And, you know, we can look at next year and we can worry about next year. And it's you know, it's easy to learn not to work, but things I can't control and I can't control the economic environment. All I can do is put WPP and our clients in the best position to navigate it. When I look at it like that, I think, well, actually, what we do is super relevant. Clients have got to demonstrate to consumers what they're doing, that we're working with supermarkets to demonstrate how they can help customers save money. Clients have got to innovate. They've got to, in many cases, put price increases to it. So I think the need for marketing isn't going to go away. There's no doubt the next 12 months will be challenging, but I think we'll come out of it as we've done before and are in a stronger position. Up next, clients and consumer the ad men must speak to, both with people asking ever more from brands. We look at the balance between profit and values. Leadership is key for any firm success, particularly in a creative industry with more than one thousand employees globally. How do you run a small city as a coherent business? We continue the conversation with WPP chief executive Margaret. So as we look forward to 2023, what declines ask you the most? You know, we will wait to find out how much we can spend next year, what is the economic outlook going to be? And I think that's really the period of great uncertainty. I think what we say to clients is those that have done well should continue to support their brands because that's ultimately what they need to do. As we saw even during the pandemic, those companies that sort of cut their marketing quickly found it hard to reinstate. I think we say to clients, you don't then be fiscally irresponsible if you like, but do continue to invest behind your business, invest behind your brands. And that's really what they're coming to us. Ask us how to do that, but how to do that. In 2023 means different things like what I do on tick tock. How do I see it on Amazon and how do I manage my reputation? How important are these influencers that we're talking about? They're very different questions from five or 10 years. So let's say I had a 10 million budget year. Right. And I wanted to touch the U.S. consumer, not alienate China and kind of keep my reputation intact. Where? How do I deploy that money? Well, you start. What products you own fancy. What should I do? Let's say a energy drink. Look, we're working with a number of soft drinks companies that I think could have a great idea. You got to start with what does the products stand for? What's it mean to consumers? I still think you got to look across the medium mix. I mean, it's interesting people talk about the death of television, but in some ways, television is being reinvented, isn't it? You know, Netflix are taking TV ads. Disney Plus is going to accept advertising. So those channels, I think the main super relevant I think you got to understand, know creativity today in a very different way before. I mean, we're trying to embrace different creative disciplines from partnering with people from Hollywood, which is in a partnership with the Coca-Cola Company and Marshmallow on a YouTube link once they see what's going on in the roads of fashion or sport. Those are also very interesting to do that. You would answer. How are you going to reach the consumer? You're going to go through Wal-Mart or Amazon, Google and build your own distribution channels. I think these will questions in a way, you know, that WPP can help you answer. Do I have to have a chief executive, a political point of view. So do I need to know CAC? Do I have to call out things that are morally wrong in my eyes? No, I don't think that brands say they have to have a political point of view, but I think brands have to understand what's going on in society. What consumers care about and how what they do is relevant to them. We did a study, Mindshare Media Agency did a study that said 82 percent of consumers care about how brands treat people, treat social issues, take a position on those. So you have to think about, you know, energy consumption. What's your policy on sustainability? What's your packaging policy? How do you treat your people? Where are you going to sell your product? Who's going to sell it through? So I think that those issues are important. I rather think of them about purpose than about them being political. Are those real changes? Absolutely. They will change. I mean, if I look at NYSE net, I think she has do mean it. Certainly. I mean, when I think about WPP, we have 100000 people. I said they're passionate about these topics. They want to know where do we stand on many of these sort of social or political or societal issues? I think society will be a good definition of them rather than political Dani Burger. How will the Qatar World Cup actually change advertisers and the relationship with some of the big sporting events? Well, I think that our advice to clients is really to think about, you know, the World Cup as the World Cup as a football celebration and to get behind football and get behind fans. Now, clearly, the controversies around, you know, the host nation are problematic. But I think our advice would be to, you know, really is as far as they can't just focus on the football and the support for the football. It's difficult. I agree. How do you navigate China? You have a big business in China. You have a big business in Taiwan. Again, you know, as we assured by some of the moves in the Biden meeting recently, President Xi and in Bali, I think that that's positive. But again, it's difficult. There's something that struck me that you said, which, of course, you would advise clients not not to spend less than ISE because it's been difficult to ramp it up. Are you talking? Is it like slots? They you know, when you go to Heathrow, if you lose a slot, then you don't get it back. Was it just if you rein in too much, then it's difficult to get the eyeballs needed to sell more? I did think there was an old adage, you know, I know half my advertising works. I don't know which half. I think increasingly we know much more about what works and what doesn't work for clients. And so I think, you know, we can look at, you know, certainly in much of digital media what the impact is to clients buy things, that consumers buy things, whether they not buy things. So I think that a lot of the sort of uncertainty, you know, industry has has been taken away by, you know, the use of data to measure. Results. And this is online. Online, but also offline. I mean, offline media, we know we haven't met any rules of thumb to understand how to use of media. I mean, I know I get pop ups for stuff when I when I talk. I mean, is my friend spying on me, Marc? Because I talk about something. I have no advertising. Is that the way that technology is gonna go? Not necessarily the spying bit, but actually, do I think, too? Well, tell me what I want to buy. I think we've been very clear. I think that consumers expect a right to privacy. And I think that's sort of a non-negotiable. And I think certainly something that we, you know, tried to push through all our work and everything we do with clients. I think at the same time, you know, advertising needs to be relevant. And if it's more relevant, it's more useful to you. And so we can use data in a way to make advertising more relevant. But we have to do it in a way that's transparent to consumers, that doesn't misuse that data. I think all of those things are possible. And what we're doing. Really? So what's the model for the future? I know there is also and we did a piece on this on Bloomberg. When you go into a shop and I think that the mannequin is basically scanning your eyes, if you're looking at the shoes for an extra three seconds, then that's what pops up in the iPad that you're going around with. I wouldn't advise that. Look, I think that, you know, the cookie was invented for many reasons before it became this kind of universal way of in a way, as you say, tracking or spy on consumers. And I think that the, you know, moving away from the cookie is a good thing in terms of online privacy. You know, there's only so much targeting you can do. You know, most of the world by products from the Coca-Cola Company is only so much targeting they need to do to be effective. And so I think sort of ultra targeting, it's become sort of spooky is not helpful, frankly. It's not helpful to our clients who wouldn't advise them to do it. But if it's Coca-Cola, everybody knows it. What about a smaller brand? My energy drink that I wanted to sell that nobody knows about. There's many ways you can build a relationship with consumers. Has to be evaluated, shamed, doesn't it? Do they follow you on Instagram to they follow you on Twitter? You know, what's what's the value exchange? And I think it has a value exchange that consumers will give you and let you use that data. Up next, with recession universally forecast, how does the ad industry weather the storm? Mark Read on selling. In the age of inflation. It's been the age of the black swan, a global pandemic, war in Europe, rampant inflation. How is the world's biggest ad firm positioning for a slowdown? Is there I don't know whether there is an interesting clients that you'd like to do more of. Or even a client, is there someone that you would love to have in the books that you don't have yet? Oh, I'm sure there is. I mean, that we do fantastic work. I mean, I love I love all of clients. Of course, it's like your children know favorite. You know, an interesting Tesla's an interesting company, you know. So far, they haven't spent money on advertising, I'm sure. Well, I'm sure one day they will. I mean, I think Jeff Bezos said back in in 2009, you know, advertising is what companies do when they have nothing to differentiate themselves. And Amazon today is one of the world's top five advertisers. So I think that, you know, companies develop and I come to a point of view where they need to talk to consumers about what they do, why they're relevant, what they have to sell. I think all of those things make what we do valuable. I mean, it's interesting when you look at the lifecycle of a business, you and I guess the ability for that business to be disrupted. When's peak advertising moment? When's the right time to really go for it? Well, you look at the technology companies, new Google, Amazon, Apple. Some of the world's biggest advertisers. And they certainly didn't start that way. So I think that we've learned that in the modern world differentiations increasingly difficult is increasingly difficult to do. It's based on technology or product feature alone. Actually, brands, what people think of the company, what they stand for, what they do, that that really matters. And I think that's what we're trying to do through advertising. What was the most difficult day in your job? Do you remember that day? Probably the first day. Nothing prepares you to be CEO of a public company. You know, I'd work for WPP for a long time. As I said, it wasn't a position I expected to come into. And if we face it, the company had a few challenges. When I started, we had grown. That was probably too high. We were quite complicated as an organization. And so if I look back now on that time know just over four years ago, I'm pretty proud of what we've all done collectively as a team. And it really has been a collective effort. Quite an interesting thing, I think you and your predecessor as Sir Martin Sorrell. So that was also, I guess, a challenge. He'd been in the company a long time. But I think when you take on a role, you do it in a different way than you do in a way that's right for you. And I look to where we were, and I think that one of the challenges was how do we integrate analog and digital. Right. Because that's sort of something that we've become quite complex. So we brought one demanded today Walter Thompson together to create one. Thompson Revere man and wine all together to bring great female wine are two big integrated agencies that have help clients across the full range of marketing to integrate analog and digital. So that was that was the first thing that was important. I think secondly, really wants to expand what we did beyond advertising. We just in the advertising box to the Negroes. We expanded off into e-commerce, into commerce, into beauty experiences for clients and much more deeply into technology. And we've been on that journey really of sort of reinvention of our traditional businesses, but also expansion into new areas to the company can grow its top line. Is it better being bigger because you service your clients in more industries and you have more of that data, or does it not make that much of a difference? I think what's interesting is the definition of scale and the competitive launch scale has changed. It used to be sort of buying power, buying muscle. You know, we buy 60 billion dollars of media around the world that would give us leverage with media owners we'd use on behalf of our clients to get better prices. Now, today, scale comes from data and technology and leveraging that technology investment and that data and that insight over multiple clients. So I think scale helps. But come back to the point I made earlier. We've also got to be nimble and smart and quick because our business is day to day interactions with individual clients. So that's the challenge, is how we sort of create that scale without becoming, you know, a big, dare I say, bureaucratic organization, which is the last thing I want to run. Mark, how does advertising spending look like next year or so in the US? And again, is there anything really to rival the U.S. in terms of consumer spending or advertising spending, advertising? Well, the U.S. is the biggest, biggest market getting the U.S. and China about 50 plus percent of the global advertising market heading in different directions. You know, the US expected to be relatively resilient next year. China not sure, maybe another tough year in a global outspend. The shooting will be up 6 or 7 percent expectations next year, up 5 to 6 percent. So slightly slower. We don't forget inflation is now 6 percent. So, you know, we're used to looking at things in nominal terms, but we forget to take off inflation, which sadly is a little bit higher than it used to be. So I think sort of a relatively relatively challenging year next year. But I think that things have proven a lot more resilient than people expect. So we'll have to see, I think is how the year how the year unfold using 2023 is the hardest year, 2024. It could be even harder if there is a lag effect in some of these. Inflation to 2020 was a pretty difficult year. So we go through difficult years. There's many reasons to be optimistic. I think about the future for industry comes back to the types of questions clients are asking us. They're much more significant. They're much more important. The secret success of any company is to grow. And I think that we, WPP and industry more broadly can be really at the heart of a client's growth. How do they succeed with consumers? How do they reach in the new areas? How do they innovate? How do they create new brands? Those those questions can be just as relevant next year. Now, this whole digital transformation is going to continue. So these things these things aren't going to go. So what's the secret sauce of being a great chief executive? Do you empowered you micromanage? Like what are you like as a chief? I like to empower. I mean, kinda all on my own. They say, you know, I need to get the best out of the people I work for. So I'd like to sort of lead a little bit from the front. Spending time with clients, spending time in pitches. You know, we are a competitive industry. We know we're in pitchers day to day. We win or lose business. So I think that we have to do that. But I also have to create a company which is collaborative. I think there's a tension between people that want to win, people they want to collaborate. But that's what we're trying to do, you know, desire to do great work to really push the boundaries from clients, but also desire to work together, because sometimes, you know, no one person has a monopoly. The ideas will really be in five years. I think that in five years we might look different and the same things will be the same. I think it's our belief in creativity. Know investments in data and technology will probably be a slightly bigger business. You know, today where 11000 people in India, 6000 people in Brazil, 7000 people in China. I think those numbers will increase. That probably increased faster in the number of people that we have here in the U.K. or in the US mean we're a U.K. company in a sense, but really a global company that's headquartered in the U.K., the U.K. Today's only 12 percent of our business. No, I don't know. That will be wildly different, but I think we'll be bigger in other parts of the world. Mark, thank you so much for your time today. Thanks once again. Thank you.

Leaders With Lacqua: WPP CEO Mark Read

In 1971 Wire and Plastic Products PLC made shopping baskets. In 2022, now known as WPP, they are the biggest advertising firm on the planet. In 2018, Mark Read became CEO of a firm in crisis. On the latest episode of Leaders with Lacqua, Mark Read joins Bloomberg's Francine Lacqua to discuss a new age of advertising and how to run a business fit for the 21st century. (Source: Bloomberg)

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