Month: September 2018

It may seem obvious to sell to human beings rather than “consumers.” But marketers often ignore this basic tenet, one that Doner chief consumer connections officer Marcus Collins holds above all else. “When we walk into the office as a marketer, we take our human hat off and put on the marketer hat, strategist, creative,”…

Levi Strauss & Co. CEO Chip Bergh has called on business leaders in power to stand up in support of gun control laws in a letter posted today on Fortune. The brand has also released a three-tiered plan to help bring an end to gun violence in America. “As president and CEO of a values-driven…

Amid questions about her influence at the social network, the high-profile executive has been asked to tackle safety and security issues. But can the deliberative Ms. Sandberg ride herd on a free-wheeling engineering culture?

We are nearing the end of back-to-school shopping with this past Labor Day weekend being the final critical shopping period of the season, according to new research that reveals key insights about the plans of both consumers and other merchants. The season started strong with Prime Day and ended with in-store pushes over Labor Day…

WPP’s new CEO Mark Read has revealed his plan to ease pressure on the beleaguered advertising group. Rather than reinvent itself, WPP will gradually pivot toward high-margin services that are more consultative and creative for clients. Advertisers still need agencies, said Read, but are “frustrated” with the current services they get.

He outlined his plan during his response to WPP’s interim results, which were announced today. Here are the key takeaways.

Creating economies of scale in light of lower media margins
WPP has too many companies, said Read. In some instances a client is meeting with five different agencies, he said, and those WPP executives in the room “end up talking to themselves.” Clients aren’t prepared to keep paying for that fragmented service now that they think they can do some of what agencies do themselves. Read’s response to that pressure is to axe some of the group’s lesser known agencies and co-locate more of the remaining ones. Doing so means he can reduce administration and back office costs, which will please shareholders, while also fostering more collaboration between agencies without muddying the positioning of each agency brand.

“We’re not trying to manage 400 different independent companies, so I’m not sure why we have to have 400 different independent brands,” said Read. “We need enough brands to manage client conflict but not so many that it makes the business impenetrable to understand.”

Getting paid for for consultancy, rather than execution when it comes to data and ad tech
WPP’s approach to technology and data is set to undergo a reversal of sorts under Read. Rather than owning data, the holding group looks set to enter into relationships with companies to effectively borrow the data, which doesn’t cost as much, and in could make makes the business cash rich.

“If you’re realistic about being in a world with Google, Facebook and Alibaba then it’s unrealistic to think that we can own a meaningful, disproportionate share of the world’s data that clients are going to come to us for,” said Read.

He had a similar view on WPP’s earlier efforts to own ad tech, which have been spearheaded through its own trading desk Xaxis, alongside its stake in demand-side platform AppNexus. Mediacom, for example, is already building technology on top of ad tech at Facebook, Google and Amazon to make it easier for advertisers to control their investments.

“I don’t think we can realistically compete with Google and other companies in building fundamental ad tech,” said Read. “We need to be the best people at integrating that technology.”

This reflects a shift in the marketing sector from owning data to consulting on the use of it.

“Marcoms is a service industry and with the rapidly shifting dynamics around data, not least the impact of the General Data Protection Regulation,” said Tristan Rice, partner at M&A advisory SI Partners. “It makes more sense to focus on value-add services than maintaining and leveraging assets, which the big tech firms are much better-placed to do.”

Advertisers need agencies to help them take more marketing in-house
Read sees the rush from big brands to try and do what they pay agencies to do themselves as an opportunity, not a threat. When those brands realize how expensive it is to trade media or create ads internally, they’ll come back to agencies said Read. There’s money to be made for the holding groups if they’re able to unload more of the operational,, low-margin services to clients and retain the more strategic, expensive services they can mark-up.

Mars, for example, picked Mediacom to handle its $1.5 billion media account in part because WPP had Amazon expertise that it couldn’t really own. The holding group is building a specialist division in Seattle that will house 200 people who will advise clients on how to spend media budgets on the marketplace, as well as understand how to create content, design stores and understand the supply chain.

Clients will always be able to hire someone to start a business but whether they’ll be able to provide that individual with a career path and development is another thing,” said Read. “If you think we have a tough time competing with Google and Facebook for talent, then imagine you’re running another type of business that’s less attractive to those people than WPP.”

Weaknesses at creative agencies will be addressed
WPP needs to have stronger creative agencies, said Read. The WPP CEO suggested that the shift of spend from traditional advertising to digital had stunted the performance of creative agencies, while more expansive agencies like Wunderman had prospered. WPP’s creative agencies are under pressure, said Read.

The group’s biggest client — Ford — has put its creative work up for review and its creative networks — Grey, JWT, Ogilvy and Y&R — are not as dominant as they once were.

“I suspect you will see some creative agencies being sold off with perhaps WPP creating a sub-holding company, similar to what Group M is for media agencies, for creative agencies to ensure a better infusion of creativity through the network and to enhance network collaboration, said Andy Maher, managing partner at growth advising firm Endeavour.

Read hinted at changes along those lines.

“I don’t know that it makes sense to combine two creative agencies with each other or two media agencies with each other,” he said. “I’d prefer to think about the structure of the growth so that the businesses we have are positioned to grow and that may mean combining capabilities in different ways so that clients have access to the full range of services within a brand.”

The post New CEO Mark Read: WPP is ‘impenetrable to understand’ appeared first on Digiday.

Most networks have aired spinoffs or prequels based on at least one of their most popular shows, but not FX. That changes tonight, with the debut of Mayans M.C., which is set in the world of–and features a few characters from–Sons of Anarchy, one of FX’s most popular series of all time. Sons–about an outlaw…

Nike’s new campaign celebrating the 30th anniversary of Just Do It–which technically launched the previous week with Serena Williams-starring spot “Voice of Belief”–blew up faster than any ad in recent memory on Monday due largely to the presence of NFL free agent Colin Kaepernick. A single image of his face quickly led to an almost…

WPP may have a new CEO, but it still has the same old problems. During its Q2 earnings report Tuesday, the holding company posted its first quarter of growth in a year, with like-for-like revenues up 1.6% for the first half of 2018 and 2.4% for Q2 to $9.6 billion. But the company’s strongest region,… Continue reading »

The post WPP Is Still Struggling. Here’s How New CEO Mark Read Plans To Fix It appeared first on AdExchanger.

While those lucky enough to be off on Labor Day across the country sat in airport terminals, in traffic or waited on train platforms, Nike quietly dropped one of its biggest ads of the year–or perhaps, of the past 30 years. Said ad stars Colin Kaepernick, the NFL quarterback and former San Francisco 49er, and…

Large majorities in eight Western European countries trust the military, ranging from 84% in France to 66% in Spain. Similarly, eight-in-ten Americans have confidence in the military.