The advertising conglomerate claims to have a 50% market share in the media and advertising industry
WPP — one of the largest advertising conglomerates aims to build a client-centric business model in India, which is further backed by data and technology. “The strategy is based on the global strategy of WPP being a ‘Creative transformation company’. As per this motto while creativity will be at the heart of the business, it will be backed by data and technology, simple structure and a culture which is compelling to others,” Mark Read, CEO, WPP, said.
The advertising and media group claims to have posted a 10% growth in India, followed by Brazil at 9% in 2019. While luxury and premium advertisers accounted for 15% of the growth, 10% of the growth came from technology companies and just three percent from consumer packaged goods (CPG) firms. As per Read, while 2019 was a challenging year, especially in the US, the group’s new strategy has helped in making progress. We have the global mandate for Intel, which spends around $1.4 billion in advertising and marketing, every year,” he added.
According to WPP, its agency GroupM estimates a 3.9% ad spend growth in 2020. “Additionally, the group will develop talent and conducive work culture, apart from being an efficient and nimble organisation. We will also be a company with a cause and hence develop strategies around sustainability and social impact,” CVL Srinivas, country manager for India, WPP, said.
The advertising conglomerate has created special integrated teams to handle large businesses such as Hindustan Unilever, Colgate, Ford, GlaxoSmithKline (GSK), PepsiCo among others. As per Srinivas, the idea is that instead of eight to nine agencies handling one large advertiser, we will have an integrated agency which will have representatives ranging from creative, data, planning, among others. For Sanjiv Mehta, chairman and managing director of Hindustan Unilever (HUL), WPP’s new business model has provided the firm with deeper consumer insights.
“In the case of other businesses, where WPP agencies handle just one part of the duties which could be either creative or media, we follow a hub-and-spoke model. Under this, we align teams as per client needs,” he added. Further, the advertising conglomerate plans to set-up innovation hubs and start-up connect programmes. These hubs will drive adoption of new technology and will house companies such as Facebook, Google, Adobe among others. “We will also allow start-ups to operate from the WPP campus under the programme,” Srinivas said, adding that the company is still in the process of devising its strategy around start-ups.
At the same time, the advertising firm is looking to partner with Indian tech firm, besides acquiring one. “We will acquire some small firms which work in the area of technology. As for India, we have partnered with tech firms such as InMobi to provide better solutions,” Read noted.
Under the ‘sustainability and social impact’ strategy the company has rolled out several initiatives, including India 2022. The project which is lead by Mehta of HUL has several other companies such as Tata Trusts, SBI along with WPP. It also runs ISDI WPP School of Communication, in addition to WPP India CSR Foundation. As per Read, purpose is important to brands. “Clients come to us with a purpose and within WPP we want it to be a company with a purpose,” he said.
WPP shares plunged to its lowest in nearly eight years on February 27, after a sharp slowdown in fourth-quarter. Overall in 2019, WPP reported a 1.6% decline in organic sales, which excluded Kantar following the sale of a 60% stake in the data business to U.S. private equity firm Bain Capital for $3.1 billion.