THE NEW WPP December 11, 2018
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THE NEW WPP December 11, 2018 WPP plc Forward looking statement In order to utilize the ‘safe harbour’ provisions of the United States Private Securities Litigation Reform Act of 1995 (the ‘PSLRA’), WPP plc is providing the following cautionary statement. This presentation contains certain forward-looking statements – that is, statements related to future, not past events and circumstances – which may relate to one or more of the financial condition, results of operations and businesses of WPP plc and certain of the plans and objectives of WPP with respect to these items. These statements are generally, but not always, identified by the use of words such as ‘will’, ‘expects’, ‘is expected to’, ‘aims’, ‘should’, ‘may’, ‘objective’, ‘is likely to’, ‘intends’, ‘believes’, ‘anticipates’, ‘plans’, ‘we see’ or similar expressions. Actual results may differ from those expressed in such statements, depending on a variety of factors including the risk factors set forth in our most recent Annual Report and Form 20-F under “Risk factors” and in any of our more recent public reports. Nothing in this presentation is intended as a forecast, nor should it be taken as such. Our most recent Annual Report and Form 20-F and other period filings are available on our website at www.wpp.com, or can be obtained from the SEC by calling 1-800-SEC-0330 or on its website at www.sec.gov. WPP plc AGENDA OUR STRATEGY OUR VISION AND OFFER A SIMPLER STRUCTURE TECHNOLOGY CULTURE, LEADERSHIP AND TALENT WPP plc TECHNOLOGY IS FUNDAMENTALLY RESHAPING OUR INDUSTRY MEDIA PROLIFERATION DATA-DRIVEN MARKETING CEO CONTENT CMO CIO TECHNOLOGY E-COMMERCE WPP plc OUR CLIENTS ARE NOT CUTTING SPEND, BUT LOOKING FOR BROADER PARTNERSHIPS MARKETING EXPENSE AS SHARE CREATIVITY OF REVENUE* 14.0% 12.1% 12.0% 11.4% 11.3% 11.2% MEDIA INSIGHT 10.2% AND PERFORMANCE 10.0% 8.0% 6.0% DATA EXPERTISE 4.0% 2.0% 0.0% TECHNOLOGY 2014 2015 2016 2017 2018 *Source Gartner: October 2018 WPP plc CMO Budget Allocation – Mean Percentage of Budget Shown * Survey of 353 marketing executives in North America and the UK at companies with more than $250 million in annual revenues OUR INDUSTRY IS FACING STRUCTURAL CHANGE, NOT STRUCTURAL DECLINE KEY CHALLENGES 1 Role of “traditional” agencies challenged 2 Our clients are being disrupted 3 Consultants competing with technology and talent 4 Facebook, Google and Alibaba vying for talent and attention 5 Trust paramount WPP plc THE NEW WPP STARTS WITH SUBSTANTIAL ASSETS CLIENTS AND SCALE CREATIVITY TECHNOLOGY PARTNERSHIPS • Partner to most of • Global networks • Partner to the CMO • Growing CIO the world’s largest • #1 media buying scale • Understanding of relationships companies • Strength in critical consumers • Significant marketing • Partner to the world’s markets, e.g., Brazil, technology offer media and technology China, India companies WPP plc WE ALSO NEED TO ADDRESS LEGACY ISSUES 1 Clarify our vision and brand position 2 Invest more in creativity and talent, particularly in the US 3 Make it simpler for clients to access our best resources 4 Increase our investment smartly in technology 5 Simplify our structure, making WPP easier to manage 6 Make WPP more efficient and effective WPP plc RADICAL EVOLUTION: A STRATEGY FOR GROWTH VISION AND DATA AND CREATIVITY OFFER TECHNOLOGY SIMPLER STRUCTURE CULTURE WPP plc OUR STRATEGY OUR VISION AND OFFER A SIMPLER STRUCTURE TECHNOLOGY CULTURE, LEADERSHIP AND TALENT WPP plc WPP IS A CREATIVE TRANSFORMATION COMPANY WPP plc WE WILL EXPAND OUR OFFER IN HIGH GROWTH AREAS COMMUNICATIONS EXPERIENCE COMMERCE TECHNOLOGY WPP plc COMMUNICATIONS EXPERIENCE COMMERCE TECHNOLOGY WHAT WE OFFER OPPORTUNITY Advertising $1 trillion market: +/- 3% growth* Content • Media: programmatic, search and innovation Media • Content creation Public Relations • Social media/influence Healthcare • Healthcare WPP plc * GroupM forecast COMMUNICATIONS EXPERIENCE COMMERCE TECHNOLOGY WHAT WE OFFER OPPORTUNITY Customer experience >$100 billion: 5-10% growth* design Platforms and websites Integration of online and offline experience Mobile applications • • Innovation, particularly in devices Innovation: voice, augmented reality • Experiences, e.g., in-car, product, voice WPP plc * Exane BNP Paribas COMMUNICATIONS EXPERIENCE COMMERCE TECHNOLOGY WHAT WE OFFER OPPORTUNITY Direct-to-consumer Platform spend of $9.5 billion: 15% growth* Omni-channel retail • Grocery Marketplaces, e.g. Amazon, Mercado Libre • Direct-to-consumer • Non-retail, e.g., airlines, banks, etc. • Marketplaces WPP plc * Forrester (Data Commerce Platform Technology Forecast) COMMUNICATIONS EXPERIENCE COMMERCE TECHNOLOGY WHAT WE OFFER OPPORTUNITY Data management $300 billion: 5-10% growth* Marketing Technology Consulting Adobe and Salesforce practices Systems integration • • Agnostic Consulting on technology choice • CMO / CIO alignment WPP plc * Exane BNP Paribas OUR STRATEGY OUR VISION AND OFFER A SIMPLER STRUCTURE TECHNOLOGY CULTURE, LEADERSHIP AND TALENT WPP plc WPP plc THREE PRINCIPLES BEHIND THE NEW ORGANISATION CLIENTS COMPANIES COUNTRIES More client-centric Fewer and stronger More integrated organisation to deliver companies each country operations to results to clients positioned to grow leverage our strengths WPP plc PROVIDE CLIENTS WITH SIMPLER ACCESS 1. Empowered WPP client leaders 2. Fewer, more integrated companies 3. Common technology 4. Co-location 5. Culture and rewards WPP plc FEWER, BUT STRONGER COMPANIES FEWER STRONGER 1. More integrated solutions AMOUNTS to clients TO C.23% OF Wunderman Thompson THE 2. Better positioned for growth COMPANY 3. Simpler to manage * 4. Eliminate overhead * Healthcare agencies re-aligned into agency brands WPP plc INTEGRATED COUNTRY OPERATIONS 24,000 3,000 1. Country Managers in top 10-20 markets 6,500 3,000 2. Simpler structure in smaller markets 3. Leadership for global and local clients 14,000 10,000 4. Talent co-operation 8,000 11,000 5. WPP Campuses 6. Shared services/efficiency 4,000 4,200 Outlines number of WPP people WPP plc FOCUS ON WHAT MATTERS SHARE OF NET SALES* TOP 10 COMPANIES 84% TOP 20 COUNTRIES 80% TOP 30 CLIENTS 28% * Revenue less pass-through costs WPP plc OUR STRATEGY OUR VISION AND OFFER A SIMPLER STRUCTURE TECHNOLOGY CULTURE, LEADERSHIP AND TALENT WPP plc TECHNOLOGY POWERS WPP INFRASTRUCTURE APPLICATIONS WE USE SYSTEMS WE BUILD TO POWER WPP TO CREATE, DEPLOY AND FOR OUR CLIENTS How we connect, MEASURE WORK Consult on, architect, collaborate, How we generate build and integrate communicate, share insights, create target platforms and applications media, measure results for clients WPP plc TECHNOLOGY WILL BE AT THE HEART OF WPP’S TRANSFORMATION • New services: communications, experience, technology and 1. From developers to integrators commerce 2. Data critical: how we use it not if we own it • Automation and operational 3. Technology Development efficiencies Centres across WPP – 6,000 people • Platforms scale to collective 4. Technology companies as intelligence/AI partners and clients WPP plc OUR STRATEGY OUR VISION AND OFFER A SIMPLER STRUCTURE TECHNOLOGY CULTURE, LEADERSHIP AND TALENT WPP plc WE WILL BUILD A NEW WPP CULTURE OPEN OUR VISION OPTIMISTIC EXTRAORDINARY WPP plc LEADERSHIP, TALENT AND REWARDS LEADERSHIP TALENT REWARDS For the first time, a WPP Investments in creative New incentive plans Executive Committee of and technology rewarding collaboration senior WPP and and growth A career at WPP company leaders Next generation talent WPP plc.