CEO Mark Read on building a leaner WPP: 'We don't need 500 brands'
Mark Read is tired of the narrative that the advertising holding company model is broken. Of course, he would be: the CEO and executive director of WPP, the world’s largest advertising holding company, has been with the group for more than two-and-a-half decades. Only for the past 16 months has he been running the whole shebang.
“If I have one frustration, it’s still somehow that we’re seen as an old-fashioned advertising agency that’s being disrupted by Google and Facebook,” says Read. “The reality is we’re a modern marketing partner that can help clients answer many of the questions they have as they’re being disrupted.”
Read is the latest guest on the “Ad Lib” podcast, recorded last week during the waning hours of CES. Ad Age caught up with Read at the WPP “terrace” at the Aria hotel, overlooking the Las Vegas Strip. Soft spoken and mild mannered (especially in comparison to his prickly predecessor), he is reserved but casual—his blue Oxford shirt open at the collar, a sweater draped over his shoulders.
“WPP starts 2020 in a really good place,” Read says in a wide-ranging interview that covers both WPP and broader marketing landscape. “We have a clear strategy for the company. We have the structure we need, the balance sheets are in a much stronger place.”
If 2019 was all about retrenchment at the holding company—shedding more than 40 assets over the past 18 months and merging agency brands VML with Y&R and Wunderman with JWT—2020 will be bringing that internal reorganization to life, he says. For starters, WPP has rebranded itself as a “creative transformation company,” which may sound like word salad to an outsider, but represents real internal evolution for the group, he says.
“When I started, I asked how many brands we had and no one could actually tell me the answer. We sort of lost count at four, five hundred. We don’t need 500 brands at WPP. We need 12 to 15 really strong brands and maybe we need some smaller boutique brands,” he says. “To me the model of WPP is Disney or LVMH: We have the strong parent brand; we have strong brands that work together.”
Of course, when Mark Read “started” as chief executive, he had some famous shoes to fill: In April of 2018, 33 years after founding WPP and ultimately growing it into an advertising behemoth, Martin Sorrell left the group in a haze of controversy around allegations of personal misconduct and misuse of company assets—allegations he denies—and started a new company called S4 Capital.
Five months later, on September 3, Mark Read was appointed CEO. Almost a WPP lifer, Read spent nine years as an executive director of WPP plc. For 12 years he was head of strategy and then CEO of WPP Digital. In 2015, he was appointed global CEO of Wunderman; in April 2018 he was named joint chief operating officer of WPP. Earlier in his career he had been both an entrepreneur and a consultant.
“In the old days, what we called ‘advertising agencies’ were set up largely around analog media channels: around television, around radio, around press,” he says. “We have to reinvent that business, which is what we’re doing bringing VML, Y&R and Wunderman, JWT together. We’re not going to organize around media channels. We’re going to organize around clients. We’re going to organize around ideas.”
About those ideas: Creativity has not been WPP’s strong suit in recent years, a fact Read acknowledges and hopes to rectify. WPP has not grown in North America since the fourth quarter of 2016—another fact Read acknowledges and aims to rectify. And the steps Read has taken so far seem to have pleased Wall Street. WPP’s stock is still below the peaks reached back in 2017, and even when he took over as CEO in September 2018. But this month, though, it scored a 52-week high. Ranked by Ad Age Datacenter as the world’s biggest agency company, WPP had worldwide revenue of $20.8 billion in 2018 (2019's numbers are still being finalized and are likely to be down from that).
“Ever since I’ve taken this job, people have been waiting for a recession that’s three to six months away. It’s still three to six months away,” he jokes. In the meantime, WPP will be focusing on strengthening its balance sheet, simplifying its business (but don’t expect any more mergers, he says) and even making a few acquisitions.
“We’re investing in marketing technology in all of its various guises,” he says. “It’s about differentiating WPP and our offer, not making us bigger.”
On the podcast, Read also opens up about WPP’s sale of 60 percent of Kantar, its market research unit, to Bain—and its data play going forward. He discusses what to expect from WPP’s media leviathan, GroupM, “one of the engines of growth.” And he almost responds to his feisty predecessor’s potshots from the sidelines, only going so far as to acknowledging that he is deliberately building a kinder, gentler WPP.
For all that, and more, be sure to listen to the podcast.