WPP Shows 'Strong Start' to Year as Mark Read Talks Choreograph Data Proposition

WPP's like-for-like organic growth rose 3.1% year-on-year to $3.24 billion in the first quarter, while like-for-like revenue jumped 6.3% to $4.02 billion as the company began its recovery from the effects of the year-long Covid-19 pandemic. After a 6.5% drop in organic revenue during the fourth quarter of last year, the holding company that owns Ogilvy, GroupM, VMLY&R and Wunderman Thomson is off to a "strong start" to the year on the strength of eCommerce, digital media and technology, said WPP Chief Executive Mark Read. “The roll-out of vaccines is improving visibility in many markets, although there is inevitably uncertainty over the pace of recovery," Read said in an investors call to discuss the quarterly results. "We are making good progress on our transformation program, which will deliver significant efficiencies to reinvest in growth, and are confident of delivering our growth and profitability guidance for 2021." Sometimes in business, there is an obsession with the measurable and what is measurable is not always what is most importantMark Read, chief executive of WPP Instrumental to WPP’s organic growth recovery has been recent new business contracts with companies such as Absolute, providing global creative duties to Ogilvy; JP Morgan Chase, which consolidated its $400 million media planning and buying account into GroupM; Sam Club, which appointed VMLY&R to handle its U.S. creative account; and Salesforce which it is offering technology operational support. The U.S. Navy also retained VMLY&R to its five-year $455 million-plus contract. Organic growth insights Regionally, China led organic growth in the three-month period, with an 18.4% gain, followed by a 12.4% rise in Italy. Growth in Brazil was 8.5%, while the U.K. registered a 3.9% increase, followed by a 2.5% gain in Germany and a 0.7% rise in the U.S. India declined by 0.5%, while France was down 1% and Spain fell 4.7%. Within the U.S. market, the company saw encouraging signs and is especially confident of “turning around” the performance of Ogilvy, said chief financial officer John Rodgers on the call. Organic growth for media network GroupM was singled out with an increase of 5.8%, while combined global integrated agencies grew by a combined 2.8%, public relations by 2% and specialist agencies by 7.5%, which included SuperUnion and Landor. Ogilvy and AKQA were negative, but "were demonstrating an improving trend," said Rodgers. Read spoke about the organic revenue growth by sector, with tech and digital services growing by 8.1% and consumer package goods by 8.7% He also underlined the current situations in India and Canada that showed that the Covid-19 pandemic was far from over and that there was still a level of "genuine uncertainty" as a result and highlighted last week’s pledge that the company would become carbon zero by 2030. Choreograph Outlined Read was asked several questions about the launch of data company Choreograph, which has taken six months to develop. On its data proposition of 128 million [mostly U.S. based] households and 20,000 data attributes led by GroupM North America CEO Kirk McDonald, Read said the operation had no intention to rebuild the cookie but was more about "rebuilding our own data assets." He added that it would be built around consumer privacy while supporting clients to build their own first-party data offer and integrating data from the network's media offer with the rest of WPP. "We take a broad approach to data overall," he said. "First-party is important, but there are many other forms of data that are available to our clients. What’s critical is how we integrate that with our partners," he added, citing WPP's existing relationships with Facebook and Google and integrating that data "seamlessly" with those walled gardens as well. On data held by the newly announced business and how it would help predict user behavior, Read said WPP held postal and email addresses from "the vast majority of households," adding that it "enables us to target media inside the walled gardens (which makes up 80% of digital media spend) and allows access into media sites and the client’s own media. We do see strong and very competitive match-rates and we are able to activate that in a future-privacy environment.” While he felt the business was "a complete set" in terms of the data it held, Read did not rule out future acquisitions to supplement the new offer. "It's an interesting foundation, I think." He also added his skepticism around a single replacement of the cookie as a tracking tool. 'Sometimes there is an obsession' "The cookie was not designed to provide ad tracking in the way it developed," he said. "In the long run, we are going to have to provide more privacy-compliant ways of managing data. If consumers want to opt into third-party ad tracking then it's fine for them to do and there are a number of scenarios where consumers way want to do that." Asked about improved match rates for cookies, Read responded: "Sometimes in business, there is an obsession with the measurable and what is measurable is not always what is most important. We spend all our time obsessing about programmatic media, which is about 10-or-15% of media spend, but we spend much less time thinking about creative optimization and the idea. We have to have a balance whether a match rate is 80% is probably neither-here-nor-there. We never statistically know the effectiveness of our work so we have to see these things in perspective and we have to spend as much time on the idea and the creative work and reaching consumers see as we do on the data that underpins it." WPP is also exploring "alternative models" for revenue generation, aiming to attract smaller business digital revenues going towards influencers and addressable TV. "It’s on our minds as there probably is an opportunity for WPP to capture growth between smaller and larger scale clients," Read said. WPP Introduces Global Data Company Choreograph