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WPP CEO on how businesses are handling advertising amid coronavirus crisis

WPP CEO Mark Read joins Yahoo Finance’s Alexis Christoforous, Brian Sozzi and Heidi Chung to discuss how companies are changing their marketing amid the coronavirus outbreak.

Video Transcript

BRIAN SOZZI: I want to get right to WPP CEO, Mark Read. Mark, good to talk with you this morning. Obviously, you guys are the world's largest advertising agency. And WPP had some big wins coming into the year. Intel, Hasbro, Discover. But you did come out with a business update in March. Business has taken a hit. But how are things looking like in April? I imagine a lot of big companies, are they planning to come back on the other side of this? And how are they planning to do so?

MARK READ: I mean, what's been amazing to me is, we still had 100,000 people who work from home four or five weeks ago, but our people are busier than they've ever been. And we're doing a lot of work now helping clients replan their communications, thinking about what they're talking about doing. We've done some research that shows that 84% of Americans want to hear what companies are doing, and will judge based on what their actions are.

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I think companies are looking at advertising. Clearly, there are some effects on the economy that are really badly hit. The airlines and travel companies. Other parts of the economy are doing well, and I think those companies want to talk to consumers about the steps that they're taking during this crisis.

ALEXIS CHRISTOFOROUS: Mark, I'd imagine that companies are trying to be very thoughtful about their messaging during this sensitive and scary time for all of us. But I'm wondering if you're hearing from some clients that may be fearful about placing ads in certain publications or on broadcasts, because those ads are going to be placed next to really bad news, bad news about the pandemic and deaths and so on. Are you hearing that from your clients?

MARK READ: Well, there's a lot, there's a lot in your question. I mean, the same research we did, showed that only 8% of Americans think that companies should not advertise at the current time. So people clearly want to hear from our clients. At the same time, I think people are concerned about placing content next to news around coronavirus. I have to say, I think consumers are smart enough to work out what's is news and what is advertising.

And I think it's important that as advertisers, we do support news media now more than ever. That quality editorial content for independent news and journalism is really important. So we need to be saying to clients that to continue to support these media, and not to be too concerned about the context in which it's around. I think consumers can judge for themselves and understand. Now the tonality, as you say, but the conversation is important.

People don't want to hear too much humor, as you can imagine, at the moment. So we're really spending a lot of time advising clients on how to get the message right. How to use this time to communicate, you can't be seen to take advantage of the situation. But I'd say a large number of our clients and companies, as you know, are doing a lot in this crisis to help people. And I think they should be talking about what they're doing to their customers.

BRIAN SOZZI: Mark, you noted in your release in March, late March, that you're reviewing your costs. Have you completed that review? And what actions might you be looking to take?

MARK READ: Well, no company is immune from the financial consequences of what's going on. And we've really been looking at our internal costs. Freezing salaries, freezing new hires. I think like other companies, we can't rule out further measures, and we're working our way through that process as we get through. I mean, I have to say, we have a business in China. [? 7% ?] of our revenue comes from China. And they are, to some extent, coming out the other side of this.

And even in Italy, Germany, Austria, they're starting to see some, I would say, green shoots for some metric, some measures to sort of unfreeze the situation. So I think we're being cognizant. And my job as the leader of the company is really to protect as many jobs as we can as we go through this situation, and that's what's important to me.

HEIDI CHUNG: Hi, Mark, it's Heidi Chung, thanks for joining us. So very interesting and tough times that we are in, and obviously, advertising is not immune to that. But is legacy media truly having a moment right now? Does regular television, as well as radio, matter more now than ever?

MARK READ: Yeah, I think, Heidi, we're seeing viewership increase by 20% to 30% on traditional television. I think we saw in '08, '09, a shift away from newspapers, and that spend never came back. And I think we're going to have to see what happens as we go through, how long this situation lasts. The reality is, that consumers are spending more time on all media.

I'd say in many ways, TikTok is the big winning platform from this situation, given my experience of how my friends and colleagues seem to be using media. But the traditional media has a lot of viewers. But I think that clients are sort of shifting budgets towards digital media. And I would expect, there's questions about the upfront market in the US, how that would exist being postponed in the situation. Will it come back in the same way? But I think in the media market, like in every other part of our economy, it will be very, very different as we come out of this situation.

BRIAN SOZZI: All right, we'll leave it there. Mark Read, the CEO of WPP. Please do stay safe. Thanks for taking a few minutes today.

MARK READ: [INAUDIBLE]. Thanks, Brian.