Ours is an optimistic industry: Mark Read
As part of the first edition of our new series - Get Set Grow! - Mark Read, CEO, WPP, speaks with Naziya Alvi Rahman, editor, exchange4media
After three months of complete lockdown, June has come as a respite for our economy. Markets have started to open up, production is getting back on track and we are hopeful that AdEx will follow soon. Hoping to leave the worst behind us, we at exchange4media are launching our new series - Get Set Grow!
And a good start is half done, hence the series that aims at mapping the recovery and growth post lockdown starts with one of the tallest global leaders of our times - Mark Read, CEO, WPP.
Considering that most markets have started to ease restrictions, where do you see growth opportunities in the current business scenario?
We have to understand what is happening in the last 12-14 weeks is the acceleration of the trends that were taking place already in the economy. The rapid digitization of industries, the growth of the world outside of the United States, and even some of the social movements. I think that COVID has brought them a stark relief, particularly the digitization of the economy. We see statistics, I think in India the e-commerce sales have grown 4x in some parts and so I have to think about it as an acceleration of trends. The growth opportunities come from shifting your briefs online, growing your e-commerce capability, communicating, and using social media. We have seen the growth of some of the platforms in India and it is a really interesting market. I have seen the growth of online payments in India, where Paytm is doing extremely well. That is where you look for growth, you look for it in the future.
What according to you is a good recovery plan for a client at this moment?
At one level you say that the growth is in digital but you have to think about what is happening in the economy in the way we shop, communicate, the way we educate our kids, and pay. It is hard to think of something in the economy that has not in some way moved much more rapidly online. That is going to have an impact on jobs, the retail sector, office spaces, universities and education, and many different sectors of the economy. I think there are two things clients are trying to think about when they think of their recovery plans and also how they renew their business. We set up three phases: ‘React’ what you do in a short term; ‘Recover’ but how do you get back to growth, and ‘Renewing’ your business to be ready for the environment in the future. The recovery plans are really more about being in the market. I think those are good reasons for clients to be in the market. When there appears a great change you have to understand what is going on with consumers and how is the behaviour changing. I think the fundamental question is how do they renew their businesses and how do we help them do that.
Some of the changes we have made in WPP — in terms of bringing together agencies like Wunderman and J Walter Thompson to form Wunderman Thompson and VMLY&R — are actually the historic strength. Ogilvy is a brand with a very integrated offering and enables us to give clients a range of integrated solutions. That is not siloed in analog and digital but actually labels them to think holistically about how to transform their business and connect with consumers in new ways.
Many markets that GroupM operates in started to open much before India. From your understanding and observations from the markets that have opened before us, what suggestions and predictions can you give for the Indian market?
The recovery is gradual and I think you have to get very specific about how things recover. Ultimately, the recovery is based on people's emotions and confidence. Are people comfortable going to the restaurant or walking down the street, are they comfortable leaving their house, many people are not. While the pandemic is under control in some parts of the world in other parts of the world it is having a very serious impact on people’s lives. We really need to think about people’s emotional state. What we have seen in some markets is some automotive sales have grown strongly — in China as soon as they came out of it and they are up 20% in the first two months in April. That is actually driven by a desire not to get back on public transport but to get into their own car. We are seeing the same thing in the US, we were speaking to an automotive manufacturer earlier this week who said they are seeing sales up 5% in May year on year, and some of that is pent-up demand.
There are other parts of the economy where you are not going to have that level of pent-up demand. I think it is going to take time for industries like tourism, travel and hospitality to recover and for people in those sectors to go back to work. I think inevitably the recovery is going to be gradual and whilst we might feel that the second quarter of this year has been the toughest quarter I think the questions remain on how quickly we will come out in the third and fourth quarters. I’m in the Nike Swoosh category — it is going to be a gradual recovery, confidence will build up, people will gradually get back to work and it is co-ordinated in the global passion.
That said, there might be a recurrence in the second half of the year in some form of the second wave. Evidence suggests that it may happen if we do not get a vaccine. People are watching nervously and as we think about getting people from WPP back in the office it is a struggle. We have said to people in London and New York and the same will be true in Mumbai and New Delhi. It is probably going to be September and October before we have a meaningful number of people back in the office. It may be delayed. At the end of the day, we can do our job remotely and to some extent, it is our responsibility not to put more people back on public transport. Not to put people back in densely populated offices, to do what we can to fight the spread of the virus.
I think it is a gradual recovery but those clients that stayed in the market and looked at the changing consumer behaviour will be the ones that will do the best.
COVID-19 has changed the scenario by 360 degrees. How have conversations with clients changed post-pandemic?
We are working in a more agile way. The work has gotten quicker, decisions are being made faster, and the creative work is just as good if not better. Clients have said let’s not go back to the old way of doing things, let’s finish it now. They say if this carries on longer we will have forgotten how to do things in the old way when we do go back. To some extent that is going to be the progression. People are going to go back to work. So gradually many of the ways of working that we have experienced over the last 4 months will just be the way in which we do things. I can’t imagine flying overnight to have a client meeting or to go to a review meeting. We have all learned that things can be done very differently. At the same time, much of that has been enabled because we have been in offices for the last 100 years. I think there still is a role for the office - it will just change. I do think that people will work from home more in the future.
I think the conversations with clients are more strategic because they are asking more fundamental questions like how should I communicate with customers at the moment, should I communicate with them, what do consumers want to hear and I think what we have said to companies is that actions speak louder than words. Many companies have gone out of the way to do something. We did work for Colgate in India to give the people remote dental consultations. I think that is really relevant communication. We have done a lot of work promoting the use of masks. The mask campaign from Ogilvy and Wunderman Thomson shows the role our industry can play. Secondly, those clients that can sell typically sell through digital channels, and therefore they are looking for digital campaigns. So there is a big shift in that direction to take communications closer to the purchase point. There is a lot of innovation taking place.
We all are cutting costs. In such a scenario, how much will the agency business suffer, or do you think the role of the pandemic makes the agency business even more important for clients?
Clearly, in the short term, our business is going to be impacted and you can see that impact in our results in the first quarter of what happened in March. I think that is an unfortunate reality of the situation. To some extent, it is beyond our control or anyone’s control. We are in a fortunate position as WPP and in our industry that we can continue to work. But clearly budgets are impacted in a number of sectors much more in hospitality, travel and tourism, and luxury than they are in technology or healthcare that is about 50 per cent of WPP’s business globally. I think there is going to be an economic impact and that is going to be a temporary impact in Q2 and Q3. Then the question is how quickly do we get back to 2019 levels in our industry and I think that is going to take a bit more time.
How should the Cannes festival change ahead of its return in 2021?
We supported the decision by the organizers to cancel the festival this year and not to try and have it in October. We are great believers in award shows and recognition for the award. It is important to celebrate the creative community and the impact that our industry brings about. When Cannes comes back in 2021, it is going to come back in a different form. Everyone understands that there will be more relevance online. I don’t think many people will travel to the South of France and we’ll probably see another degree of scaling back of the festival from what we saw in the past. We also have the CES - the consumer awards show - coming up in January. We will start to plan for that. I think it is going to be difficult to see whether that is going to take place in a major way in January. These are the two key events in our industry: CES, which is a celebration of technology and its impact on marketing, and Cannes Lions which is a celebration of creativity. I think we’ll miss Cannes next week, we have a special edition of WPP TV planned.
Would you want to share some insights on the recently started WPP TV?
We have a special edition of WPP TV going out soon. We launched WPP TV as a way of bringing people together. It runs about 45 minutes a day, four days a week. We feature creative people, some of our work, some leaders from around the world. On Monday, it will be timed for Asia, Tuesday for Europe, Wednesday for the United States, and Thursday Latin America. And it has been a great way of bringing people together. Although we are physically separated in many ways we feel digitally more connected than ever before.
What were the operational challenges that most of your agencies faced during the lockdown period?
The irony is that the operational challenges were much less than what we would have imagined. I think historically if you did an office move you would take six months to plan it and suddenly we did an office move over the weekend. We started Work from Home on March 16 and I think it has gone smoothly. Many of our people want to come back to the office to see their friends, to see their colleagues, and to be together for that sense of community. While some people never want to go back to work, many people want to. We are going to have to start thinking about how we are going to bring people gradually back to the offices, ensuring that they can come to the office in a safe way and it is voluntary.
If you could share your concluding thoughts?
Ours is an optimistic industry. It is an industry that is connected to people, ideas, and to the art of the possible. I think we have to look into the current situation that we find ourselves in and look for growth opportunities, look for the things we want to change and look for the good in the world. Really try to help our clients get through this. We are not in the front line of the response but I think as an industry there are many things that we should be proud of helping companies, authorities, and organizations communicate during the pandemic. I think we need to look at that in the future. It has certainly brought WPP together as a company in ways we wouldn’t have imagined before and that will be a good thing. From the collaboration, we will get better results for our clients. Ultimately, we exist to help our clients, help the people who work for us, and to help them communicate in the world we live using the power of creativity. So, I look to our creative leaders like Piyush and others to come up with their ideas and innovations that can help companies succeed and prosper. I really appreciate all the work our people in India are doing.For more updates, be socially connected with us on
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