A renewed focus on clients, agility, creative and attracting talent are at the top of WPP new CEO’s agenda as the business looks to become a “much more modern and contemporary company” that can compete more “aggressively” with consultancies, Google and Facebook.
During an investor call this morning (4 September), Mark Read said WPP has not been moving quickly enough and needs to become a simpler business that is easier for “frustrated” clients to access. This despite the fact WPP returned to growth for the first time in a year, with like-for-like revenues up 2.4% in the three months to June.
“Where clients are taking work in-house, they’re frustrated with what we’re doing,” Read said. “They’re not in-sourcing because it’s cheaper, they think they can do it better. We need to do things better, faster, cheaper and quicker.”
Read blamed much of this structural change in the industry on consulting businesses like Accenture, which are “pushing an agenda”; however, he said he is confident WPP can “punch above its weight” in competing with the consultancies.
“Their agenda is to get their staff in there at three-and-a-half times the salary and they never leave; it’s called in-housing by stealth,” he said.
“We need to have constructive conversations with clients. If we need to put people in their offices we need to be prepared to do that.”
Read is also looking to have more of a constructive relationship with the likes of Google, Facebook and Alibaba – both in terms of helping clients get the most value from them, as well as competing for talent which Read says should be going to WPP.
Strength and streamlining
WPP’s creative agencies are another key focus for Read, which he said have been under pressure as clients shift budgets away from traditional forms of media towards “the new”.
“We need to have stronger creative agencies – I don’t want to blame clients – with stronger reputations that do better work,” he said. “We need to return them to growth as we do the rest of the business.”
Read is also looking to streamline WPP’s portfolio and have more consistency in its brands, and said in future he would like WPP to be seen as more of a company than a group.
“We need to have enough brands to manage client conflict but not so many it makes the business impenetrable to understand…clients don’t care,” he said.
“That’s not to say brands don’t matter but if you have so many they start to lose relevance. We need to have fewer, stronger brands in the business.”
However, Read said he doesn’t think it would make sense to combine two creative or media agencies together at this stage – if anything, they need to get closer together.
As such, Read will be looking to bring operations together in countries, with Sea Containers, its offices in London, cited as an ideal destination for its UK arm so it can be closer to clients in an open-plan office and to companies and people that work in the business.
“We can’t underestimate the power of co-location and we want to accelerate the pace at which we’re doing this,” he said.
WPP is also looking to make sure data and technology is embedded in everything it does, as well as working more closely with big software companies to help clients use technology.
“All clients care about is work being data-driven…we need to be the best people at combining data around the world,” he said, adding that he’d like to get rid of the word ‘digital’ and instead think about technology, which powers everything clients do now.
“We can’t realistically compete with Google in building ad tech so we need to think about how we can be the best people to integrate that technology.”