WPP’s Mark Read on client demand for AI and fewer agency partners


The impact of artificial intelligence will be “much more fundamental than the metaverse”.

Read: 'New-business environment is pretty active.'

The impact of artificial intelligence will be “much more fundamental than the metaverse” on WPP’s business and the wider ad industry, according to Mark Read.

“I can’t tell you the number of client presentations that we’ve done on this topic over the last two months,” the WPP chief executive told Campaign after Q1 results that showed 2.9% revenue growth.

Read said WPP, the world’s biggest agency employer with about 115,000 staff, will need to bring its creative and media agencies closer to “deliver on the promise of AI” but he reiterated there was no need to merge the two disciplines because they are already “in one unit called WPP."

He said WPP’s creative agencies had “a slightly softer start” to the year than expected, with Wunderman Thompson suffering lower spend from technology clients, but the group is sticking to its annual forecast of 3% to 5% growth despite ongoing economic uncertainty and inflation.

Read said the new business market is “pretty active” and clients are looking to consolidate the number of their agency partners. 

WPP's PR firms include BCW and Hill+Knowlton Strategies, as well as the Ogilvy network. 

You could argue that your Q1 revenue growth of 2.9% is a shade disappointing (given Publicis Groupe and Omnicom Group grew faster, although Interpublic Group subsequently reported a slight decline).
"We expected the first quarter to be a little bit tougher given the comparatives with last year (when WPP grew 9.5% in Q1 2022). It is very much what we expected and we remain confident in our guidance of 3% to 5% for the year overall. It's interesting that our results are very much in line with Google and Meta and matches their growth of 3% in the quarter."

How do you explain the strong growth at media arm Group M versus the low growth at the creative agencies and is this a challenge with creative agencies per se or individual agencies?

"Group M's growth is very much in line with global media advertising at around 6% and our creative agencies had perhaps a slightly softer start (with just 0.7% growth), though we should call out a strong performance from Ogilvy."

What does the new business market look like? You were quite positive about the pitch market in recent quarters.

"The new business environment is pretty active. I wouldn't want to be quoted about individual pitches and reviews but if you look here in the U.K. and in the U.S., clients are still looking at the best way to structure their marketing and I think we'll continue to see some consolidation."

Is this consolidation about clients wanting more integration of different disciplines? You’ve not mentioned clients but, for example, Pfizer is carrying out a major review across creative, media, production and public relations.

"Clients are looking to simplify and streamline their relationships with their agency partners. They realise that a simpler set of partnerships can deliver greater speed and transformation in a world being reshaped by technology.

"If we're going to deliver on the promise of AI, we're going to have to bring creative and media much more closely together and data and technology that underpin it. Clients realise to move more quickly, they need to have a simpler set of partners.

"Now they also need world-class creative – hence we're hiring people like Andrew Keller (who joined from Meta as chief creative officer for WPP’s global, integrated Coca-Cola agency) and we’re investing in new creative areas like influencer marketing – but they also need a simpler set of partners."

Does this mean you need to carry out more internal agency restructuring like EssenceMediacom? It's something that you've always rejected, but what about creative and media disciplines coming together in one place, in one unit?

"They are in one unit called WPP."

But you do split out Group M’s performance from the creative agencies in your financial reporting for the Global Integrated Agencies division?

"If people and analysts want to know how businesses are doing, that’s a different issue. If you look at our work for Coke, we’re working extremely effectively together across our creative and media companies, and I think that's the right way to go."

What is the secret to getting different parts of the business working together? Is it one client P&L? What are the kinds of incentives that mean you actually get collaboration?

"It’s all about people and culture, and that starts at the top of the company. And then it’s about many of our people enjoy working in multi-disciplinary teams and working with different parts of the organisation and seeing how that can produce better work for clients. It’s about culture, more than anything else."

Going back to simplification, for most of your leadership since 2018, there there have been very few M&A deals but you have made several influencer marketing agency acquisitons recently. What are you doing to integrate acquisitions and are you doing them in a different ways to how you did in the past to avoid what might be described as a patchwork quilt of businesses?

"I don’t want to draw comparisons with the past. We are trying to buy businesses that are complementary to what we do, that accelerate our entry in newer areas of marketing to improve our offer to clients, and in the main we're integrating them with our core agency networks, so that they are well integrated into our client offer."

In your investor presentation, there's a slide about “how we see the opportunity in AI” with examples of work from Ogilvy, AKQA and WudnermanThompson. What are clients asking for and what are you actually able to deliver today?

"We have long used AI in our media businesses to optimise media, generate new audiences and measure the effectiveness of campaigns and we have long used AI in our production businesses to automate how we produce work for clients.

"What's changed in the last six months is really the application of AI to language, through large language models, and to pictures and video, which gives us the potential to apply it much broader creative canvas.

"The latest developments in AI really enable it to be applied in our creative businesses, as well as in our media and production businesses, and offer the opportunity to bring all of that together, so that we can create work that's much more relevant for consumers and improve the impact of our campaigns."

There's a lot of hype of AI. You’ve worked in the industry for more than 30 years. Is this a seismic change? Is this going to drastically change in the industry and how quickly in the next 12 to 18 months?

"This is not the metaverse. It’s going be much more fundamental to our business than the metaverse because it changes not just how consumers can engage with media, it changes how we produce our work.

"The metaverse is an extension of what we do into new channels. This [emergence of AI] is a total reinvention of the way we work and our opportunity to deliver results to clients.

"It's really much more fundamental. It’s going to require over time a rewiring of the way that we work and the underpinnings that we have.

"I can’t tell you the number of client presentations that we’ve done on this topic over the last two months. Clients can really see the potential for this and they want to get ahead because they can see how they can use this to make their marketing more competitive and deliver higher ROI."

What is WPP doing to tackle its gender pay gap, which is still significant and widened in the U.K. in the last year on most measures?

"We know we need to improve our gender pay gap and the numbers that we released this year reflect historic performance [based on 2022 salaries and 2021 bonuses] and we’re expecting to improve. If you look at Hampton Alexander [rankings], we were ranked number six in the FTSE-100 on female gender balance [at board level]."

Other holding group financial results & analysis:

Group M powers 2.9% organic growth at WPP

Havas organic revenue growth slows to 1.1%

Omnicom grows 5.2% organically in Q1 but caution abounds

Publicis surpasses Omnicom as second-largest holding company by revenue

Publicis Groupe CEO Arthur Sadoun: ‘Our transformation is complete’

This story first appeared on Campaign UK.

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