What are the largest digital platforms for advertisers today?
MARK READ: I think that the largest digital platforms, Google, Facebook, Alibaba — $100 billion in revenue, $60 billion in revenue, $30 billion in revenue — are really driving the industry. If I look at WPP, interestingly, of our four largest partners, two are digital: Google and Facebook. And two you could call traditional, though that's not really a word anymore: Disney and Comcast. So we're really seeing a world being reshaped by the growth of the digital platforms.
How have marketing strategies evolved?
MARK READ: Increasingly, clients think about creating experiences, not just about brands. And the job of the CMO is about the end-to-end customer experience, not just how it sits and lands in advertising. But using data today, we have the ability to look at consumers and follow them across that customer journey. Our job has to be really understanding, How do we move them along the journey? What's the right message? What's relevant to them at any particular part of that journey, and how do we measure the impact that our communications have on the consumer?
And in the future, looking at the five-year plan, what are you thinking about in terms of platforms?
MARK READ: Well, it's interesting. Take those two sets of companies. On the one hand you have Google and Facebook, that are largely technology companies, with content coming from consumers or other media companies. And on another hand, you have Comcast and Disney, that you could say are largely content companies really embracing technology. I'm a great believer in the value of content. Without ideas, these platforms are just dumb pipes, if you like.
So I think that the traditional media companies are fighting back effectively for viewership, and they're really starting to embrace technology in ways that will make them much more powerful platforms in the future.
Where does the consumer journey start?
MARK READ: A lot of markets start with search. It's such a critical moment in how consumers think about things. With the growth of mobile, search is perhaps becoming a little bit less relevant.
But increasingly, markets start with the digital platform and work back, and that's a massive transformation from how markets thought about marketing five years ago. Five years ago, it was, What's my brand idea? What's my television commercial? How's that spot on the Super Bowl? Today they're thinking about the digital channel first, and then extrapolating back from that to the analog, or traditional, platforms.
Five or ten years from now, where's this going?
MARK READ: Well, in five, ten years, there's going to be an explosion of data. We're going to have to figure out the privacy issues; we're going to have to think about relevance, a lot of personalization; and we're going to have to work out how these things will tie together much more tightly. How we connect the data, to my mind, is the critical issue facing marketers. And how can we connect it in a privacy-compliant way that respects consumers, where they understand what's happening? I think much of what we saw in the past, ill-conceived ideas that sort of follow you around [Laughs] the internet, almost stalking you with ads — that's not what we want to see. What we want to see is relevant messages: the right point, at the right time.
How do you think about data?
MARK READ: I think for us, we have to think about how we use data. WPP needs to be a client-focused organization, and what clients really care about is how we use data in our marketing. They don't care if we own data or don't own data. What they want to know is that we understand data: the supply chain of data. How do we think about it? Is it collected in the right way? Are we telling consumers how we use it?
So I think that's the point: data. And then think what you can do and how you can use it to generate insights. You know, what are people thinking? How do you use it to think about how to reach consumers at the right time? And how do you use data to really look at the return on your investments, which is significant for marketers today?
How do you see the evolution of some of these digital platforms?
MARK READ: It's clear that Google and Facebook, in particular, have taken a dominant share of digital advertising dollars. It's a slightly U.S.-centric view, because we tend to forget about Alibaba and Tencent, but even on a global basis, Google and Facebook are clearly the dominant players.
History tells us it won't last in quite the same way. New platforms will come. And I think you see good growth at Twitter, good growth at Snap, good growth at Amazon. None of them are yet on a scale to really touch the dominance of Google and Facebook. But I'm sure that it will come.
Can you talk a little bit about the global strategy?
MARK READ: WPP operates in 113 countries around the world. So I think we're in a unique position to see what's going on globally. I like to say, "Today, we need to succeed in two markets, the U.S. and China." But they are very different markets. And in many ways, China is more advanced than the U.S. in lots of things touching marketing and the payments industry. I was in a Pizza Hut there. You order online, you pay through your phone, and the serving staff just brings you the food. Everything else is transacted digitally.
So these markets are, in many ways, ahead of us and how we think about the world. Take the automotive industry. There are something like 300 different electric startup companies today in China. They're shaping the world, so we need to think about how we succeed and grow and thrive in China.
Brazil's a really interesting market, because it's half like China and half like the U.S. They're really dominant in the traditional media industry, but the digital platforms are growing quickly. And actually, they're more dominated by the Western platforms than they are, so far, by homegrown platforms.
India's an interesting market too. We've seen really strong growth in India. It's still, though, dominated not just by television but also by newspapers, which are not a forgotten media here, but they're much less dominant than they used to be. The influence of newspapers is big, but the absolute ad dollars are still relatively small. But India, for us, is growing 10 to 15 percent. So it's a really fantastic market for us.
What changes are you seeing in consumer behavior?
MARK READ: One thing we do see is that consumers are adopting technology much faster than companies. In the old days, we had the adoption curve. You'd launch a product and consumers would adopt it. Today consumers adopt products and companies are kind of scrambling to catch up.
Think about banking, where we transact most things through our mobile device today. Banks are scrambling to keep their mobile app as functional as it needs to be to compete with the types of platforms that we're using. So I think that's one of the challenges facing companies.
How do you think about AI in relation to consumer data?
MARK READ: Clearly, once we have control of the data, we're thinking about how we use AI to generate insights from it, and use it to drive marketing. One of the ironies of digital media is that it's become much more labor-intensive than traditional media.
So I think you'll see a much greater application of AI to automate processes to drive insights. And we're really just starting there. There's a long way to go to take advantage of the full potential of AI in marketing now.
People tell me that we can use AI to come up with creative ideas. I haven't seen that. I saw a recent piece in The New Yorker where a journalist wrote the first three articles of the piece, and then they used a computer to write the fourth paragraph. And the fourth paragraph was spookily like a machine talking to you. You could almost see inside the mind of a machine. So we're really at the beginning of the explosion of AI and its application in marketing today.
Let's talk about changing viewership habits.
MARK READ: If you look at how viewing habits are changing, the one thing to say is people still watch a lot more traditional, linear TV than people think. But at the same time, there's no doubt that viewers are shifting to these new digital platforms in terms of hours spent. Sometimes you find out that people are spending 25 hours a day watching media, and it doesn't make a lot of sense. But I think that the growth in the digital channels is being driven increasingly by these new, direct-to-consumer, over-the-top packages, with the launch of Disney Plus, with Apple TV, Netflix, Hulu. I don't know who's going to subscribe to all of these platforms and whether the cost will be greater than the cable bundle.
But what you do see on these new platforms is that they're generally subscriber-funded, not advertiser-funded. And I think we'll have to see whether that situation will last. Or, to get the best content, will the platforms need to go and take advertiser funding? My guess is, some of them will, and I think that will make them much more accessible and much broader. But we'll have to see how that develops.
What's your perspective on product placement?
MARK READ: Well, product placement's always been there, but I think it's difficult. There are not a lot of successful advertiser-funded shows. So I think we need to think about how we use the media in creative ways.
Look at what Airbnb does to capture attention by getting particular properties, like the Downton Abbey Highclere Castle. That's really designed to get that intersection of news and product placement. But I think inside advertiser-funded programming is difficult.
Where are young viewers going, and how do you deal with that?
MARK READ: You can see that eyeballs have shifted very quickly to the digital platforms — to YouTube, Facebook, Instagram. YouTube today, I'd say, is one of the under-monetized platforms. The share of advertising spend relative to the share of viewership is under-monetized. So I think we'll see greater monetization of YouTube in the future.
Instagram's a really interesting platform to advertisers: very premium, luxury, trend-focused. So I think we'll see increasing dollars flowing there. Consumers spend a lot of time on these new communication platforms, like Messenger, WhatsApp. To date, they're not really driven by advertising, but they're figuring out how to take ad dollars. The other platform to talk about, obviously, is Amazon. It's a commerce behemoth, yet still not quite there in the advertising space. You're seeing strong growth, but as an advertising platform, they still need to develop new ways to reach consumers.
We should talk about Amazon. Today our business is at the intersection of communications, content and commerce. So we need to talk about the commerce part of it. Amazon has a big advertising business. It's growing more quickly than the others, albeit from a smaller base. But what I think clients are really interested in is, How do they get their messages very close to that point of purchase, which you get on Amazon?
How do you help clients deal with changing viewership habits?
MARK READ: In the old days, advertising was about brand building. But today it's about driving sales. What does a CMO need to do? They need to deliver growth to the corporation.
And so you're seeing ad dollars shift quite quickly to those channels, but they are much closer to the point of sale. Hence the growth of Amazon, hence the growth of search, hence the explosion on Instagram of e-commerce-enabled ad units. So clients need to spend their money where they're going to get the biggest return in terms of sales today.
Look, I think there's an explosion of data. The biggest question clients have is, How do I make sense of all of it? So what we need to do at WPP is show them how they can use their data in their marketing. How do they use it to derive insights about consumers? How do they use it to make sure they get the right message to the right consumer at the right time?
We need advertising to be relevant to people. And then, how do they use data to really drive and have the return on that investment and measure the impact of their communications?
What does advertising look like ten or twenty years into the future?
MARK READ: I think predictions in the media business are always the hardest to make. We know that the consumer platforms today will probably still be the big consumer platforms. What I think is really interesting is to see how the traditional players adapt. How far will these new, over-the-top, direct-to-consumer services go? Will they still be subscription-funded, or will they be taking advertising? Will the U.S. government's privacy regulations and data regulations really turn digital media, in some way, back to a version of analog media, which people argue that it's starting to do? My guess is that Google, Facebook and Amazon will still be massive players in five years' time.