GroupM CEO Christian Juhl: We'll recommend brands pull spend from publishers and platforms that do not decarbonise; we're not planning staff cull; Aimee Buchanan's to do list
Christian Juhl, Global CEO of the world's biggest ad buying group, says brands want metrics that mean something, and sustainability is top of the agenda. He says quality or 'Q-CPMs' that factor in decarbonisation and sustainability of the media in which ads appear is the next frontier, and will recommend brands do not spend ad budgets with publishers and platforms that fail to align with corporate sustainability goals. Meanwhile, Juhl says transforming GroupM to be "more like a software company" doesn't mean axing staff to match platforms' headcount to revenue ratios, and outlines what incoming ANZ CEO must tackle first in a bid to retake top spot.
What you need to know:
- GroupM Global CEO Christian Juhl says brands want metrics that show how their ad dollars are meeting broader objectives, such as brand safety and increasingly, climate change and sustainability goals.
- GroupM is building quality CPMs (Q-CPMs), metrics Juhl urges industry to get behind.
- He says GroupM will “absolutely recommend” brands pull spend from publishers that do not demonstrably decarbonise.
- Meanwhile, the race to become a "software company" does not mean wholesale staff changes, but specialist smarts from acquisitions will be embedded within group leadership to drive change.
- He cited a pitch in the UK as a case of old-world versus new world media agency in which Essence, Google's global media agency he led and acquired by WPP, wrote some quick code for a project while another competing WPP media agency had 30 interns working on spreadsheets.
- Juhl says incoming ANZ CEO, Aimee Buchanan has carte blanche to return GroupM back to form, outlines priorities.
We’ve spent a lot of time trying to create a universal API [that plugs into] all these different media partners to understand where media is really working. I think we've got to drive fraud out of the system across the board.
GroupM Global CEO Christian Juhl is rewiring WPP’s media arm to end up “more like a software company than a media agency”. But he says that doesn’t necessarily mean culling headcount to match software company ratios of revenue per employee.
Like other holdco bosses, Juhl’s aiming to automate the drudge work and free-up teams to tackle bigger problems – and he sees plenty of easy wins.
Meanwhile, he says WPP’s plan is to put the specialists it acquires at the heart of the company, to drive bolder change from within.
That approach mirrors WPP CEO Mark Read’s strategic bet in appointing Juhl to lead GroupM globally, some four years after acquiring Juhl’s Essence – one of the few companies WPP’s biggest detractor, Sir Martin Sorrell, admits he would gladly buy from the company he founded.
Engineering broader ad industry change for the better also starts at home, says Juhl, with GroupM working on sustainability metrics as part of quality or ‘Q-CPMs’. He says those metrics will ultimately lead GroupM to recommend brands pull spend from media platforms that cannot demonstrably prove they are doing the right thing from an environmental, social and corporate governance (ESG) perspective.
That means WPP’s buying arm will proactively place fewer and fewer ad dollars with media owners that do not meet its own stringent decarbonisation plan, and the ESG agendas of its client brands.
Publishers are reading the auguries. Even News Corp has undergone an editorial and commercial Damascene conversion, this week emerging as a champion net zero (though internally it has long held credible decarbonisation targets).
How sustainability becomes a standardised, tradable metric is a big, hairy question. But Juhl says most media vendors are on board – and almost all of the other big media agency groups are on the same page. Of all the holdcos, only Omnicom is yet to set a net zero target.
Measurement: Apples, bad apples and the self-interested
If media is to evolve and reward the publishers and platforms trying to do the right thing, everybody has to crack measurement beyond reach, frequency and cost per acquisition. GroupM, Juhl suggests, is doing the hard yards earlier than others.
“There's certainly not enough comparative measurement capability across different media types, more work needs to be done there. There's exciting industry things going on trying to do that (examples here and here), but they're not all unified. I think different media partners have different motivations – not always un-self interested – for how they want things measured,” says Juhl. “And that's a problem for us.”
“We’ve spent a lot of time trying to create a universal API [that plugs into] all these different media partners to understand where media is really working. I think we've got to drive fraud out of the system across the board … all those things represent massive challenges to a fair and equitable measurement system.”
But he thinks those challenges are not insurmountable.
“I suspect expect our industry look vastly different in the next five years, because I think those problems are very solvable.”
We were one of the first to have a Q-CPM, and the art of it was defining the ‘Q'. For us it stood for quality. But for some clients Q simply stood for a sale – they didn't care how they got there. Others cared deeply. You could put scores against different things, then if you could measure it, you could come back and give them a sense of what they're paying for, per Q-CPM.
Quality CPMs: The $650bn Q?
In the meantime, GroupM is building Q-CPMs optimised to whatever client brands want – something Juhl claims Essence helped pioneer, and something he urges the broader industry to adopt more widely.
“We were one of the first to have a Q-CPM, and the art of it was defining the ‘Q’. It stood for quality in our sense, but we had clients where the Q simply stood for a sale – and that's it, they didn't care how they got there,” says Juhl.
“But we had others that cared deeply about the supply side of their media ecosystem, [for example] brand safety, and you could put scores against all those things. Then if you could measure it, you could come back and give them a sense of what they're paying for, per Q-CPM,” he adds.
“I think the industry has got to embrace something like that and think about the things that are really driving awareness right now in the marketplace, around sustainability, around diversity and inclusion, around carbon neutrality, around sustainable journalism, around all these things.”
ESG-CPMs: Where the smart money’s headed
Juhl says GroupM has launched a “media inclusion initiative” and now runs the rule over the supply side – i.e. publishers and platforms.
“That [asks] are we really including all different types of media ownership companies within there and providing opportunities there? Are we looking at the scientifically-based net zero sustainability commitment that we've made to be carbon neutral in the near future? And how do we put a score against all those different things?”
Ultimately, says Juhl, brands will decide where and how they want to spend their money.
“They don't have to sign up for these things. If they just want to say, ‘how much on the lowest cost for a sale?’ that's obviously an option.
“But for a lot of our clients that are investing heavily in these areas themselves, all of their partners are going to have to be able to sign up for this type of thing. It’s our job to bring them a responsible media framework that allows them to have assurances that they're buying media and the places that support their overall corporate vision.”
We want to make advertising the matters and get rid of all the stuff that's wasted and pollutive and noisy – and I think this is a way that we can do that.
What would Luke do?
Building out those kind of metrics is no mean feat. But it will ultimately provide a competitive advantage as major advertisers – such as Telstra – also commit to decarbonising their entire media supply chain.
Juhl says embedding sustainability goes far beyond media – and WPP is starting by laying the groundwork internally.
“It resonates at home and I think that's the most important thing. You look at this industry and ask is this a place that you would want your kids to work, are you proud to tell your parents you work here? That's the question I always ask myself: is this something I want to tell my son Luke about? For me, it really brings a lot of purpose to what we are doing. I think it delivers on our mission of making advertising work better for people around the world,” says Juhl.
“We want to make advertising the matters and get rid of all the stuff that's wasted and pollutive and noisy – and I think this is a way that we can do that.
“You fold in all those types of metrics and say, ‘we want every piece of advertising to earn its place in the world’. That's a nice objective, and we want to do it in a sustainable way that is additive and not something that annoys and intrudes; that is something people feel good about,” he adds.
“If our people feel good about it, our clients feel good about it. And if our clients feel good about it, then their consumers are going to feel good about it – and it's advertising that works. The ability to do that was what got me excited to take the job at GroupM to begin with,” says Juhl. “If I can do that at the largest media organisation in the world…”
I should credit WPP on this. It’s a WPP-level commitment, and GroupM is in some ways one of the more challenging companies to deliver that commitment. But we did sign up. And yes, absolutely, we'll push it down to every single supplier vendor that WPP works with, including all of our media vendors within GroupM. And so we're starting that process.
‘We will recommend clients don’t spend with climate laggards’
As Juhl says, some brands will just want cheap reach. But for others, GroupM will “absolutely” drive decarbonisation goals through its media supply chain on behalf of client corporate commitments, and WPP’s own.
“I should credit WPP on this. It’s a WPP-level commitment, and GroupM is in some ways one of the more challenging companies to deliver that commitment. But we did sign up. And yes, absolutely, we'll push it down to every single supplier vendor that WPP works with, including all of our media vendors within GroupM. And so we're starting that process,” says Juhl.
“Fortunately, most of our vendors are there with us. And so for those that aren't, we're talking about how do we bring in the appropriate measurement systems? How do we look at this?”
But if suppliers don’t play ball, will GroupM pull ad dollars?
“We’ll certainly make that recommendation. I'm not sure we'll pull vendors necessarily, but we'll definitely make the recommendation to our clients and make sure that they know this vendor is not providing that level of assurance, and we don't know what's happening behind the scenes, that you advertise there at your own risk – and we highly recommend you don't. I have no problem doing that,” says Juhl.
“But I don’t think I am going to be in that position. It's good business. It's the right thing to do. I talked to all of our major media partners and across the board, they've said, ‘yes, we'll sign up to that commitment with you, we have a plan’. They're all trying to get there as well.”
We want to make sure that GroupM is the number one group within Australia. We've given Aimee a wide remit to take a look at what we're doing and create her own vision, based upon the foundations which we have laid out for Group M globally ... Aimee's got wide authority to do what she thinks is right for the markets.
Aimee Buchanan’s to do list
Locally, GroupM pulled off a coup in luring OMD boss Aimee Buchanan to run the ANZ business. Within reason, Juhl says Buchanan has carte blanche to ensure GroupM is top dog. Which means knocking OMG off its perch.
“We're really excited about what Aimee's done with her career so far. We want to make sure that GroupM is the number one group within Australia. We've given her a wide remit to take a look at what we're doing and create her own vision based upon the foundations which we have laid out for Group M globally,” says Juhl.
“There's a lot of things that are non-negotiable in there, but Aimee's got wide authority to do what she thinks is right for the markets, which is how GroupM runs globally. We say ‘here are the foundations, here are the capabilities that we're building’. But ultimately, you have to adapt those on behalf of your clients and figure out what's going to win in those particular marketplaces,” he adds. “Aimee's got tremendous experience, tremendous relationships and great knowledge of space, I'm really excited to work with her.”
But Juhl underlines that the proposition comes first.
“I don't believe in being number one just for the sake of wearing the number one T-shirt. But I do believe in being number one in terms of providing the price and value that we need to provide to clients. And we're there right now. In fairness, we're big enough that we have a seat at every single table and we can get the pricing power that we need,” he says.
Buchanan is also tasked with restoring culture following an attritional recent period which culminated in WPP AUNZ delisting from the ASX and WPP ending the Antipodean joint venture with STW. Under the previous incumbent, Jens Monsees, staff questioning the direction of travel were told to "step off the bus". Stalwart and former GroupM boss John Steedman left during that period, as did WPP AUNZ CEO, Mark Lollback.
“The goal for Aimee is to make sure that our proposition is fit for purpose, that it is resonating with clients, that our people feel that it's the right place to work, that they can build their own careers there,” said Juhl. “I think if we do those things right, market share will follow – and those are the areas I expect Aimee to dive into first.”
I still think we're going to be a services company. I just think that how we’re going to operate will look more like a software company. So I'm cautious on some of those [headcount] economics, it's more of a reference to the way we think about using technology.
Being more like a software company, but not firing everybody
Juhl says being more like a software company will bring some “dramatic” changes to GroupM, but not necessarily major cuts. He says the “software company” analogy applies more to operational approach than headcount economics.
Given the ratios the likes of Facebook and Google work to – $1.81m revenue per employee and $1.35m/employee in 2020 respectively – that statement will reassure a big chunk of WPPs 100,000 staff; WPP’s ratio in 2020 equated to $166k revenue per employee at current exchange rates.
“I still think we're going to be a services company. I just think that how we’re going to operate will look more like a software company. So I'm cautious on some of those economics, it's more of a reference to the way we think about using technology,” says Juhl.
“We know that ad budgets are 50 per cent-plus in digital these days. We know where those dollars are going and we know that in order to be effective in those areas, you've got to have strong capabilities in data, technology and systems. And if you look at that, the types of skill-sets that we need, the type of people that we need are those who think in dot revisions. So we're creating systems and processes that are much like a software company would think,” adds Juhl.
“We hold on to our strengths, and then we add on to these other areas that are purely digital… [but] the basic skill-sets will remain.”
I don’t think [it’s a case of] ‘we’re going to hire all of these people and discard all of these other people’. The state of our industry right now is that everybody's running in high attrition rates, there's massive open roles everywhere. It's incumbent on GroupM to provide opportunity for all of our staff, and that training and change is seen as something that is welcomed, not scary.
Putting the specialists in charge
For that reason, Juhl doesn’t envisage a wholesale changing of the guard in terms of people. Instead, he says GroupM will put the specialists it has acquired – and will acquire – into leading group roles, and drive change semi-organically.
Juhl cites Essence as a template.
“In Essence, we had a very strong programmatic capability, probably the leading analytics and data-based media company in the world. And what we were able to do is make that acquisition at the GroupM level. If you look at how that talent is migrated into GroupM, our head of activation and programmatic in the United States (Gila Wilensky) now runs Xaxis in the United States for GroupM across all the brands. And I think you'll see us continue to make acquisitions where we can bring in expertise.”
Likewise, WPP’s recent acquisition of AI specialist Satalia. “Those people will also act as a catalyst for change within the organisation,” says Juhl.
“So I don’t think [it’s a case of] ‘we’re going to hire all of these people and discard all of these other people’. Sadly, the state of our industry right now and talent is that everybody's running in high attrition rates, and there's massive open roles everywhere as we've rebounded from 2020,” he adds.
“So I think it's incumbent upon GroupM to make sure that we provide opportunity for all of our staff, and that training and change is seen as something that is welcomed, not scary.”
We pitched for an online reservation company in the UK, at the time against one of the GroupM companies. We wrote a small script to query their online reservation system. It ran in a couple of hours, we had all the information we needed. The other agency used 30 interns to do it manually in Excel ... We ended up winning the client.
Even automating the basics means winning
If GroupM, it’s people, processes and technology can strike the right balance, Juhl sees truckloads of easy wins for the taking, as well as longer-term payoffs.
He cites an example of how effortlessly legacy media agencies can be brushed aside by technology.
“It was a pitch for an online reservation company in the UK, and we were pitching at the time against one of the GroupM companies. We were still kind of separate – within GroupM, but separate. I was at the ExCo later and we ended up winning the client.
“One of the things that we did was to just write a small script to query their online reservation system, to look for all the openings that they would have for reservations. And then we started to think about how we could use technology to target those specific openings at a specific point in time. So we changed the frequency, the advertising or the reach, depending on where they had their largest vacancies. We wrote that script. It ran in a couple of hours. We had all the information we needed,” says Juhl.
“One of our other agencies within GroupM took 30 interns and had them go through the entire site. They had them actually look for every single opening and pull it into an Excel sheet and manually move it over,” he says.
“It's not a hard technology, it's just a different way of thinking. And that's the type of systems thinking we'd like to bring into the organisation on a more holistic basis.”
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