'Clients Have Learned From the Pandemic': WPP's Mark Read on Weathering Uncertainty

Economic ambiguity is looming across Europe and various parts of the world during the second half of the year and moving into 2023. But WPP chief executive Mark Read believes that with the pandemic still fresh in the minds of brand marketers, they will remember the benefits seen by those who continued to invest in advertising during that period of global uncertainty. On the impact on the advertising sector, he explained to investors that the company had yet to see any deviation from clients in terms of their spend and that he felt the industry remained “positive.” He also cited the mantra that those who continue to spend on backing their brands and products performed better against their competition who don’t in the long run. “Our clients' view of marketing has also transformed,” he claimed. Buy Now, Pay Later Industry In Flux Amid Inflation and Potential Recession Clients' continued investment Speaking to Adweek, Read said clients needed to treat marketing as “an investment” and continue to innovate, including in their product development and experience offerings, to meet evolving consumer expectations. “There’s no doubt that the cost-of-living squeeze is going to impact consumers, and clients need to understand how they can shape their products and experiences to help consumers,” he continued of brands who saw “the value of being close to customers.” He added that recent business performance results and statements of investment intent from consumer packaged good companies such as Unilever were an indication of lessons being learned. “Companies have realized that cost reduction only gets you so far," he said. "It's important to have marketing investment, which means strong creative work and strong media work run with a strong partner, to help you influence and take advantage of the new channels that emerge.” Growth in recruitment With the performance of the business, onboarding its major client win at the end of last year with Coca-Cola alongside new business with brands such as Audi, Audible, Danone and Nationwide in recent months, has seen the business recruit about 6,000 new employees while growing its freelance costs, in the U.K. and U.S. especially, by 16.7%. With the war for talent during what has been described as the Great Resignation, the costs of staff recruitment and retention has grown in the last two years as has the cost of personal expenses, up 85% year-on-year for the business with the return of travel. There’s no doubt that the cost-of-living squeeze is going to impact consumers, and clients need to understand how they can shape their products and experiences to help consumers.Mark Read, CEO, WPP Read said the headcount growth within WPP has been “pretty much across the board” with the hybrid working model still in effect with the main areas for support being in strategy, client service and digital media. Should the economy prove “challenging” for the business, however, he believes WPP would rely on turnover to help it cut costs where needed as it continues to drive toward its savings goal of delivering 600 million pounds against 2019 figures by 2025. Business simplification “A simpler WPP is a stronger WPP,” Read said about his continued “simplification” strategy that he embarked on since being made chief executive. That has continued this year with the creation of EssenceMediacom and Design Bridge and Partners while also producing new brands such as data business Choreograph last year and recent acquisitions Bowerhouse and Corebiz. “I do believe in the brand that we have,” he explained. “What we’re saying is that during a time of tremendous innovation as we are experiencing at the moment, we need to continue to shape and focus our business to deliver for our clients,” adding that while there are no further plans for internal consolidation, he didn’t rule out even more taking place in the future. And looking to the near future, Read stated confidently that he believes WPP is “much stronger” than it was five years ago and prepared for “whatever more challenging times lie ahead.” Ad Spend Forecasts Muted as Economic Cloud Looms Large Over Brands