WPP boss Mark Read: agencies must avoid ‘kneejerk reaction’ to economic uncertainty
WPP boss Mark Read talks to The Drum about the company’s exit from Russia and its support of Ukraine, as well as economic uncertainty and its response to Greenpeace provocations in Cannes.
For Mark Read, the last few months must rank as one of the most testing periods in his leadership of WPP. In February, as the British holding company looked to consolidate its recovery from Covid-19, he withdrew WPP’s business from Russia. Throughout the spring, China’s strict pandemic rules held back its established agency businesses in the country. It then launched e-commerce business Everymile and merged GroupM flagships Essence and Mediacom, and now there’s a global economic downturn looming on the horizon. In short, it has been a busy quarter.
Last week’s Cannes Lions presented a chance for a breather – to focus on the work itself as well as take in some of the evening festivities. WPP parceled up a stretch of the Riviera coastline to serve as its beachside headquarters.
WPP chief executive officer Mark Read on the economy, Ukraine and Greenpeace / WPP/The Drum
”I saw Post Malone last night,” Read tells The Drum, ”and it struck me that people have been yearning to get back together. It reminds us why we work in this business, in a way.”
WPP had a successful week in France, heading home with a treasure chest of Lions; Ogilvy was named Network of the Year. Read’s most high-profile moment, however, was with a new client – the Ukrainian government.
Ukraine and Russia
On stage with Oleksandr Tkachenko, Ukraine’s minister of culture, the chief executive announced a pro bono partnership designed to bring in new business to the embattled country.
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”We offered to work with them and do a campaign, for which we’ve been doing some creative development,” he explains. It has been six weeks in the works.
”I went to Warsaw and did a town hall with the people who are still there and some who had fled, and three things struck me about Ukraine. Number one is the depth and breadth and strength of the economy. We’ve got to know Ukraine a lot more in the last few weeks and months, so we understand better how it’s important in agriculture and the strength of its technology.
”The second thing is that people there want to work. They don’t want charity and handouts, they want dignity in work. The third thing is that Ukraine is open to business. [Tkachenko] talked about museums and theaters and restaurants opening, people trying to get on with their normal life while this terrible thing was happening in other parts of the country. That’s what were working with them to strive to communicate.”
The decision to leave Russia was made ”within 24 hours” of the start of the invasion. ”Once we understood the impact of our work, that we were funding Russian government propaganda, we pretty quickly decided that we couldn’t operate in that environment,” he says.
”We regret having to do it, but I think we’re really faced with a situation where continuing to operate there was not consistent with what we believe as a company.”
Though the call itself came fast – WPP was the first of the major agency groups to withdraw from Russia – the work of handing over its Russian agencies to local management took ”a couple of months”. There were opportunities to act earlier, however – back in 2014, when the Crimea was annexed. The Russian Duma’s anti-LGBTQ+ laws, for example, don’t exactly sit with WPP’s professed values.
Read says: ”Russia became an increasingly difficult country in which to operate. The world probably didn’t react sufficiently to the 2014 invasion... I think businesses should be proud of the way they reacted. We can look back and regret what we didn’t do before, but that doesn’t mean we haven’t done the right thing before.”
Sustainability – and resilience
After Greenpeace activists managed to storm WPP’s private Cannes beach, local police responded by putting in place increased security measures for guests.
”I think those campaigning organizations do a very good job of raising awareness of the issue,” says Read. ”We’re not naive about the challenges of climate change. While it may be inconvenient from time to time, it’s a good thing they draw attention to the climate crisis.”
Greenpeace and Clean Creatives (another group that gatecrashed a Cannes panel last week) have advocated for agencies to drop their energy clients. But Read says agencies shouldn’t be shamed for working with fossil fuel companies.
”In my view, there’s no one solution to this. Yes, energy companies are selling oil. But as consumers, we’re all driving cars and flying places. It requires a collective solution. Our industry should play a role in doing that – not to misrepresent what they are doing, but if we can talk about what they’re doing in a fair and accurate way, why wouldn’t we want to do that? If you’re an energy company and nobody knows which [energy companies] are doing more than others, how will consumers choose where to get their energy?
”There’s a role for what we do and a role for campaign organizations.”
The climate crisis wasn’t the only existential threat intruding on Riviera celebrations, however. Rising inflation, a worsening cost of living crisis and a possible global recession all risked the party atmosphere.
Though Read says WPP is working to protect its staff from higher costs of living, he’s still optimistic about the resilience of advertising in the face of a downturn.
”Clients learned during the pandemic that the best course of action is to invest in marketing when they can and to try and sustain that investment. I certainly don’t think we’re back in the situation we were at in 2020, where clients pulled spending in significant amounts as the pandemic unfolded. There’s a role for us to help our clients, just like we did with the pandemic, to navigate the way consumer behavior is going to pivot again.
”We demonstrated during Covid that we have a flexible business model, we were able to manage our cost base pretty quickly and the important thing is to take things in perspective.”
The company will be wary of cutting job roles, he says, based on the example of competitors that cut too deeply during the pandemic and missed out on the consequent bounce back. ”Look at the challenges businesses have had in recruiting people after they’ve laid off too many staff. I want to make sure we don’t make a kneejerk reaction in the opposite direction.”
WPP is still bullish on hiring new talent, he notes. ”Great people are always in demand. We want to have a disproportionate share of those people.” Though it is competing both with rival holding companies and tech giants for those great people, Read argues: ”Our focus on our purpose, and why we exist as a company and the impact we have on society, has made us more attractive destination for talent.”
Even if its clients don’t cut back spending, WPP’s staff remain exposed to rising food, energy and housing costs. Read says it is attempting to help them deal with that pressure.
”We have to understand the impact of what’s happening on our people, in terms of pressures on their budgets and on the consumer more generally,” he says, noting that the company is trying to balance hiring with what it can give people in terms of salary increases.
Despite his enthusiasm for ”people coming together again” at WPP’s vaunted Campus properties, Read may promote more caution among WPP agencies bringing staff back to the office, even for three days a week. ”I’m conscious of bringing people back in five days a week – of the impact on people’s budget from travel and other things. It’s a question of getting the balance right.”
Comms and commerce
Like many other agency groups, WPP has paid special attention to growing client demand for e-commerce expertise and support. In April, it launched Everymile, a DTC consultancy that when matched up with the holding company’s other capabilities, promised to provide clients with support across the entire consumer journey.
Read says those ambitions won’t come at the expense of WPP’s traditional agency businesses. ”Our communications business is a good business, particularly the digital part of that business, and we want our communications business to grow.
”Our experience and commerce businesses will grow faster, but we haven’t set specific targets. It’s a more than a billion-dollar revenue business and we expect that to grow more than the rest of the country.”
It’s not the only niche WPP is focused on expanding. Its health agencies Wunderman Thompson Health and VMLY&R Health have emerged as formidable businesses during the pandemic – a success Read credits to earlier decisions to merge them back into their parent networks.
”Four years ago we really restructured our health business back into our agencies. It had been a separate vertical and I think that was not the right strategy. Bringing out healthcare expertise closer to our main creative agencies improved the quality of the work. They didn’t want to be in a silo, they wanted access to great creative talent, great technology. It’s proven – VMLY&R Health, for example, has got stronger by being integrated into the main agency. The results are fantastic... healthcare is a big push for us.”
Additional reporting by Cameron Clarke
This article was last updated 1 July 2022; previously, it stated extra security was put in place by WPP, rather than local authorities.