>> in 1971 water made it shopping baskets. it is the biggest advertising firm in the planet. sometime between then and now, specifically 1989, they marched through the door and played a starring role in the transformation. in 2018, they became chief executive of a firm in crisis. the man who had made the giant steps down. today we speak about the new age of advertising and how to run a business fit for the 21st century. >> thank you for joining us. what does it mean to be an ad man, add leader in 2022? >> in all industries it is such an interesting phase. we've been through the pandemic, we have come out ever more relevant.

we face a time of continued innovation with advertising formats, additional companies being launched. e-commerce taking off. our industry is changing and changes all the time. it is changing now more than ever. >> if you look at the pace of change it has been incredible. can you go through the same pace of change in the next 10 years? >> i think so. we are a company of a hundred thousand people. we have the heart of a small company. people working day-to-day on clients. that's how we get the scale of a big company but also how we operate quickly. >> other rivals are focused on spending in tech. >> what makes us special is creativity, ideas. without ideas, there is nothing on these tech platforms. nothing without creative work and ideas. creativity is what makes wpp distinctive. of course, with technology, how we bring those ideas to life,

where they live, where they exist, that is changing very quickly. it is about ruling out traditional skills of the past with a rude understanding of data and technology in the future. >> your role is changing. is it advertising or advising climates? >> wpp is more than an advertising company today than we used to be. advertising is important to what we do and when you start with that in the customer says what do you do, we are much more than an advertising company. we are likely to be asked by a client how do i succeed on amazon as we are looking at this television ad. so we have had to learn over the last 10 years. >> what about the next five years and is it going to be

amazon, twitter, something else that will be the hot new thing? >> we do not need to make those decisions. consumers will decide and we need to be where the consumers are. it is our job to understand those platforms and help our clients. saying what is the most relevant. where can they reach consumers. data and technology and fact driven. it is the creative ideas but also financial returns. >> how did you end up in advertising? >> by mistake really. i left university. i did not do what i wanted to do. i wrote to a few business leaders and companies. i did work at wpp in the early days and when i started i never thought i would end up in this seat if you like at all. >> what do you like most? >> the people. we are a people business. we have clients in creators who are people. technology who are people. and my job is to give those people motivation to tell them where we are going and to encourage them to do their best

work. to encourage them to collaborate. but ultimately, the job is -- sometimes you think you are as much a psychologist as a business leader at times. >> what is your best piece of advice? if there is a deal you need to get or account you need to get that you need to rival, what is your pep talk like? >> my pep talk, i love pitches. i love leading from the front and spending time with teams. i love to see the work we are doing. when we come together. so i try to put myself in the seat of the client. what are they going to think? are they going to be excited? how will it resonate with consumers. so i try to play that role. >> how have clients changed over the years you have been in advertising. to they ask for different services because the challenges

are so much bigger? mark: we've never lived through a time of so many crises. trying to manage enormous buzzards -- budgets. they need trusted advisors and that is why they are looking to wpp and our agencies into our people to bring, a real sense of if we do this, what will the impact be from packaging through to advertising, through two public relations to design. and there are many new skills. the days of old, if you like, i do not know if this was a matter of judgment. now we are more data-driven than we used to be with market research. internal investment. we use digital media in that way as well. so we have become more analytically driven than we used to be. francine: what is the biggest challenge going forward? if you look at technology companies, twitter, facebook, is that where the future lies? mark: it is interesting the

first six months of this year if you look at wpp, it is growing more quickly than the average of the four tech companies. google, meta, snap and twitter. in a funny way, the challenges they face are different from the challenges that we face. we tend to have bigger, more global clients and we rely on venture capital funded startups. so we are coming into the future in a good position. and there will be opportunities for us. francine: who do you see as your biggest rival? mark: we compete with traditional rivals, consulting companies, trying to do some of this work in-house. it has always been competitive. two people in the garage could start up an agency and they have done over many years. but i think for the major clients that we service today, we are in a good position. we just came off the back about a year ago, winning the global mandate for the coca-cola company. and they looked at and tested every element of what we do the

business, from coming to develop great creative work in china or india or south africa to 10 we embrace the media revolution and how to partner with facebook and google and embrace tiktok with every part of our business. they have slated us as their partner. that talks to the power we have and the skill that we have. francine: is it more difficult now because of the cost-of-living crisis, because of the economic downturn? do you start feeling it already? mark: as i speak to you today, the client spend is amazing. resilience, actually. and we could look at next year, we can worry about next year. it is easy. i've learned not to worry. i cannot control the economic environment, all i can do is put wpp and our clients in the best position to navigate. and i think actually what we do is super relevant. the clients demonstrate to consumers what they are doing. that we are working with supermarkets to demonstrate how they can help customers save

money. clients have got to innovate, they have got to end many cases put price increases. the need for marketing is not going to go away. it is no doubt in the next 12 months they will be challenging but we will come out of it as we have done before in a strong position. francine: up next, client and consumer. the adman must speak to both. we will get the balance between profit and values. ♪

francine: leadership is key for any firm's success. particularly in a creative industry. with more than 100 thousand employees globally, how do you run a small city as a coherent business? we continue the conversation

with wpp chief executive mark reed. as we look forward to 2023, what the clients ask you the most? mark: how much we can spend it next year or the economic outlook. i think that is the time of great uncertainty. i think what we say to clients is, those that have done well should continue to support their brands. that is ultimately what they needed to do as we saw during the pandemic, those companies cut them off too quickly and find it hard to reinstate. see you say to clients, do not be fiscally irresponsible, but do continue to invest behind your business, invest behind your brands and that is what they are coming to us and asking us how to do that for you to how to do that in 23 means different things like what do i do on tiktok? how do i succeed on amazon? how i manage my reputation? how important are these influences we are talking about? there are different measures from 10 years ago. francine: i wanted to touch on the u.s. consumer, not alienate china and keep my repetition

intact. how do i deploy the money? mark: -- francine: what should i be? let's say an energy drink. mark: we are looking with a number of soft drink companies that are going to have great ideas. so we start with what does the product stand for and what does it mean to consumers? i think you got to look across the media mix. it's interesting, people talk about the death of television but in some ways, television is being reinvented, isn't it? netflix taking tv ads, disney plus and hulu accept advertising, so those channels remain at super relevant. you're going to understand creativity today in a very different way before. we are trying to embrace different creative disciplines, from partnering from people in hollywood and the partnership between the coca-cola company and marshmallow. the world of fashion and sport,

those are very interesting to do. how are you going to reach the consumer? are you going to go through walmart or amazon or build your own distribution channels? these questions in a way, wpp can answer them. francine: do i have to have a chief executive political point of view? do i need to -- do i have to call out things that are morally wrong? francine: no i do not think brands have to have a political point of view. i think brands have to understand what is going on in society, what consumers care about, and how what they do is relevant to them. we did a study -- a media agency did a study and said 82% of consumers care about how brands treat people, treat social issues. take a position on those. so you have to think about energy consumption, what is your policy on sustainability? what is your packaging policy? how you treat your people? where are you going to sell your product and who are you going to sell it to? those issues are important.

i think about purpose and about them being political. francine: are those real changes? mark: absolutely, they are real changes. francine: do ceos mean it? mark: i mean it and we think about wpp we have 100,000 people that are passionate about these companies. we want to know where we stand on it so many of these social or political or societal issues. societial is a good definition rather than political. francine: how will the guitar world cup change advertisers and the relationship at sporting events? -- the qatar world cup. francine: they think about it as a football celebration and to get behind football and behind the fans. now clearly, the controversies around the host nation are problematic. but i think our advice would be really as far as they can to just focus on the football and the support for the football. it is difficult, i agree.

francine: how do you navigate china? mark: we have big business in china. we have big business in taiwan. i was reassured by some of the moves in the abiding meeting with president xi jinping. i think that is positive. it is difficult. francine: there is something that struck me what you said, which of course you would advise clients not to spend less because it is difficult to ramp it up. is it like slots? like when you go to heathrow, if you lose a slot, then you do not get it back? if you rein into much, it is difficult to get the eyeballs needed to sell more? mark: there is an old adage and i know have my advertising works. i do not know which half. increasingly, we know much more about what works and what does not work, for starters. so i think we can look at much of digital media, what the impact is. do clients buy things, do consumers buy things or not? a lot of the uncertainty in that industry has been taken away by the use of data to measure results. francine: this is online?

mark: online, but also off-line. off-line media, we know we have any variables to understand how to use off-line media. francine: i know i get pop-ups for stuff when i talk. it is my phone spying on me? because i talk about something and i have advertising? is that the way that technology is going to go? not the spying thing but telling you what i want to buy. mark: we need to be clear. consumers expect a right to privacy and i think that is a nonnegotiable. and i think certainly something that he tried to push through all of our work and everything that we do with clients. i think at the same time, advertising needs to be relevant. it is more relevant and more useful to you. so we can use data in a way to make advertising more relevant, but we have to do it in a way that is transparent to consumers.

that does not misuse their data. those are possible in what we are doing really good francine: what is the model for the future? you did a piece on this and bloomberg. when you go into a shop and i think the mannequin is basically scanning your eyes. if you're thinking about shoes for three seconds that's what pops up in the ipad you're going around with. mark: i would not advise you to do that. look, i think the cookie was invented for many reasons. it became this kind of universal way of tracking or spying on consumers. and i think that moving away from the cookie is a good thing in terms of online privacy. there is only so much targeting you can do. most of the world byproducts from the coca-cola company. there is only so much targeting they need to do to be effective. so i think altar targeting has become sort of spooky, not helpful. it's not hopeful to our clients and i would not advise him to do it. francine: but if it's coca-cola, everyone knows it. what about a smaller brand, my energy drink that i want to sell that no one knows about? mark: you can build a relationship with consumers. there has to be a value exchange. today fall yuan instagram or

twitter -- do they follow you on instagram or twitter? the consumers will let you use their data. francine: up next with a session universally forecast, how does the ad industry weather the storm? mark read on it selling in the age of inflation. ♪

francine: it has been the age of the black swan. a global pandemic and rampant

inflation. how has the world's biggest ad firm position for a slowdown? is there -- i don't know if there is an interest in clients that you would like to do more of or even a client -- is there someone you would love to have on the books that you don't have yet? mark: i'm sure there is. we do fantastic work. i love all of our clients. francine: of course, like your children. no favorite. mark: tesla is an interesting company, you know. so far we have not spent money on advertising. i am sure one day, they will. back in 2009, advertising, what companies do when they have nothing to differentiate themselves. amazon is one of the world's top five advertisers. so companies develop and come to a point where they need to talk to consumers about what they do, why they are relevant, what they have the cell. i think all of those things make

what we do valuable. francine: it is interesting. if you look at the lifecycle of a business and the ability for the business to be disrupted, when is peak advertising relevant? when is the right time to really go for it? mark: technology companies like google, amazon, apple, they're the biggest advertisers. they did not start that way, so i think that we have learned that in a modern world, differentiations increasingly difficult. it is increasingly difficult to do just based on technology as a product feature alone. brands are what people think of the company, what they stand for, what they do. that really matters. and i think that is what we are trying to do through advertising. francine: what is the most difficult day in your job? do your member that day? mark: nothing prepares you to be eight ceo of the company. -- being a ceo of a public company. it was not a position that i expected to come into. if the company had a few

challenges we started, we have grown. the debt was too high, we were quite complicated as an organization. and so, if i look back now on that time, just over four years ago, i am pretty proud of what we have all done. we have collectively as a team it -- it really has been a collective effort, quite an interesting thing i think. francine: your predecessor was sorrel, so that was a challenge. mark: he had been at the company a long time but when you take on the company you do it in a way that is right for you. that is where we were. one of the challenges was how do we integrate analog and digital? because that is something quite complex. -- together to create vm l, too big integrated agencies that can

help clients across the full range of markets and analog and digital. that was the first thing that was important. secondly, we wanted to expand advertising. we were just in the advertising box. we expanded off into e-commerce, commerce, experiences for clients and deeply into technology. we have been on that journey of reinvention of our traditional businesses, but also the expansion into new areas so the company can grow. francine: is it better being bigger, because you service clients in more industries and you have more data? or does it not make that much of a difference? mark: most interesting is the definition of scale and the competitive scale has changed. used to be buying power and buying muscle. 16 million dollars of media would give us a leverage of media on behalf of clients to get better prices. today's scale comes from data and technology and leveraging that technology and data investment and insight over multiple clients. so i think scale helps but coming back to the point i made earlier, you got to be nimble, smart and quick because our business is day-to-day interaction with individual clients.

so that is the challenge is how we create that scale without becoming, you know, the big, dare i say bureaucratic organization. francine: how does advertising spending look next year? in the u.s. and again, is there anything to rival the u.s. in terms of consumer spending or advertising spending? mark: the u.s. is the biggest market, together the u.s. and china are 50 plus of the global advertising market. having different directions, the u.s. expected to be relatively resilient next year, china, not sure. be another tough year. global ad spend will be up six or 7%. expectations next year are up five to 6%, so slightly slower. but inflation is 6%, so, you know, we are used to looking at things in nominal terms. you have to take off inflation which is a little bit higher than it used to be. it is relatively challenging year next year, but things have proven more resilient than people expect, so we will have to see how the year unfolds. francine: do you think 2023 is

the hardest year or 24 could be even harder if there is a lag effect? mark: 2020 was a pretty difficult year. we go through difficult years. there are many reasons to be optimistic i think about the future for our industry. it comes back to the types of clients questions. they are significant, more important. the secret success of any company is to grow. and i think that wpp and our industry more importantly, can be really at the heart of our clients growth. how do they reach consumers in new areas, how to the innovate, how do they create new brands? those questions are going to be just as relevant next year. this whole digital transformation is going to continue. so these things are not going to go away. francine: what is the secrets off -- the secret sauce of being a great chief executive? mark: i can't do it all on my own and i need to get the best out of the people that i work for. so i like to lead from the front, spinning time in pitches. we are a competitive industry. pitches day today we win or

lose. no doubt, we have to do that. we have to create a company which is collaborative. there is a tension between people who want to win, people that want to collaborate. that is what we are trying to do. we desire to do great work, to really push the boundaries for clients. but also a desire to work together. sometimes no one person has a monopoly on the ideas. francine: where will you be in five years? mark: i think that in five years, we will look different and the same. things will be the same. our belief in creativity, investments in data and technology. but we will be a bigger business. here today we are 11,000 people in india, 6000 people in brazil, 7000 people in china. i think those numbers will increase. they will increase faster number of people that we have here in the u.k. or u.s.. i mean, we are a u.k. company in a sense but we are really a global company that is

headquartered in the u.k. and the u.k. today is only 12% of our business. i do not know that will be wildly different. it will be bigger in other parts of the world. francine: thank you for your time today. mark: thank you francine. thank you. ♪

david: inflation easing, china op