WPP CEO Reaches Beyond Ads to Build Giant E-Commerce Factory

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WPP Plc Chief Executive Officer Mark Read is trying to revive the world’s biggest advertising group by rivaling some of the fastest growing e-commerce companies.

The London-based agency network is focusing on designing online sales platforms, apps and customer membership programs for brands, jostling with companies beyond adland like THG Holdings Plc, Accenture Plc and even International Business Machines Corp. for a slice of the booming digital economy.

WPP CEO Reaches Beyond Ads to Build Giant E-Commerce Factory

Read is attempting to turn around a company that lost more than half of its market value in four years in a difficult pivot from a moribund traditional ad industry to the fast-growing world of digital marketing.

In an interview with Bloomberg, he said his biggest opportunity is helping companies sell more effectively online, and WPP could pursue acquisitions to deepen its expertise.

“We are working through how we can expand our e-commerce business,” he said. “We’ll think quite expansively about it.”

Mark Read of WPP PLC on Bloomberg Europe TV

The plans mark a change of emphasis after two years of slimming down the complex empire left by his deal-hungry predecessor Martin Sorrell. The changes included the sale of most of WPP’s market research unit Kantar.

“They basically have to cut through the largess and the excess of previous years -- they have to shrink to grow,” said Mirabaud analyst Neil Campling.

WPP CEO Reaches Beyond Ads to Build Giant E-Commerce Factory

Growing Rivalry

Read is consolidating WPP’s stable of around 500 brands to roughly 100 and merging businesses so it can offer the complete packages of creative and digital services that clients are demanding. After merging the world’s oldest ad agency J Walter Thompson with digital network Wunderman, and Madison Avenue stalwart Y&R with online specialist VML, WPP last month announced a tie-up between century-old Grey Group and design consultancy AKQA.

By expanding the scope of WPP’s operations, Read is likely to inflame rivalry with global consulting firms like Accenture and Deloitte, which have muscled into WPP’s territory by building up digital marketing services of their own. Accenture snapped up more than two dozen digital and creative agencies in the last few years, including Droga5 and Bow & Arrow last year.

WPP CEO Reaches Beyond Ads to Build Giant E-Commerce Factory

If Read succeeds, it could transform WPP in the eyes of investors, who have flocked to companies that can harness the pandemic-fueled explosion in e-commerce, such as online emporium THG.

By harnessing troves of data on user behavior and demographics, WPP can fine-tune not just ad campaigns but customer experiences so that big brands are able to sell more.

Its teams are assembling the marketing and e-commerce technology for pharmaceutical retailing giant Walgreens Boots Alliance Inc., and used the data that drives the company’s customer loyalty platforms to inform its media and communication programs.

The push to get closer to customers is driven partly by the fact that information about them is becoming harder to acquire. Tech giants like Alphabet Inc. are pulling support for third-party cookies, the tags that track and identify consumers across the internet. And regulators are cracking down with more stringent rules to protect personal data.

Advertisers and publishers are hurrying to create direct, consensual relationships with users, like subscription and loyalty plans, so they can scoop up data of their own.

WPP agency AKQA designed the Nike+ Training Club app that keeps users hooked on tracking their fitness and offers personalized services and events in return. The arrangement means consumers get something back for sharing their data, said Sam Kelly, a managing partner at AKQA.

“Today, it’s not just what you say about your brand. It’s the sum of the experience across all the customer touch-points, from the website to the app, interface, employees, and retail space,” said Kelly.

©2020 Bloomberg L.P.

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