Episode 4 - The Great Acceleration with Leigh Gammons
Join us for a TPT Digital podcast to discuss how COVID-19 has forced companies all over the world to adapt in order to survive. We're joined by Leigh Gammons, CEO at Wunderman Thompson Technology, to take a look at the winners and losers, industry shifts, and trends of the past year.
Shane Madden: Hey guys. Thanks so much for joining us. This is Shane Madden from TPT Digital. I'm joined by my cohost Whit Harwood from Peacock, and on today's segment, we’re super thrilled to have a long-standing partner and friend of mine—Leigh Gammons, who's the CEO of Wunderman Thompson Technology. It's WPP out of London. So Leigh and I actually met in probably 2015 thereabouts in Las Vegas at the Sitecore Symposium and developed a relationship from there. And I guess we did all the circuits and all the trade shows one time to Orlando, Florida. Leigh and I have been friends for a few years, so really thrilled to have you on the show, and thanks so much for your time.
Leigh Gammons: Yeah. It's very nice to talk to you and not be five o'clock in the morning as well. But yeah, nice to speak with you and Whit.
Shane Madden: So you mean, you'd rather speak in a podcast than at the bar in Las Vegas, huh?
Leigh Gammons: That's absolutely not what I mean at all.
Shane Madden: This is really great and really appreciate your time. I know you're particularly busy, especially since you've got the recent promotion to CEO, and congrats on that new appointment as well. So I guess in today's segment, we want to focus on COVID being the great accelerant. So it did in eight or nine or 10 months what previously took 10 years for companies to achieve. And I think for you and your role and your company, this was particularly, well-suited for your feedback and would love your thoughts and comments on it. And there are three main tenants for me really, and Whit and I have kind of discussed this before the podcast, and those three tenets are: first, mobilized workforce, secondly, companies trying to drive down inefficiencies, and I guess then the third is the adoption of technology solutions. So, we'd love to understand kind of what you're seeing in the trenches with your business at WPP—and if you have any war stories you can share and just generally your thoughts in terms of what we've seen with respect to COVID over the last 10 or 11 months.
Leigh Gammons: Yeah, a similar journey, I guess, is on my mind as well. I mean the initial rush for everybody to be getting Teams, Zoom, and everything else installed in their businesses and making sure that they could replicate as much as possible. The business that offers an environment at home has been the first part of it, but for quite a long time, and I think you've put it quite nicely, Shane, there's quite a long time that people have been striving to become more digitally native, perhaps. I think already digital is about 50% of brand and marketers' spend and it's due to only go in one direction. It needs to be 70% in the next five years or so, but all of these things for me are really being guided by the consumers and what they're really looking for from businesses.
So we've also done some research throughout it to make sure that we're on the button when it comes to working with our clients and our customers and something like 35% of consumers say they shop online more than they did before, which isn't surprising. And then the online experience is more important than it's ever been. But interestingly, 44% of the consumers that we spoke to agree that online experiences have generally improved since the pandemic started. So people are using it as an opportunity and making sure that they get more headspace with consumers, and interestingly, the last kind of stat is, 58% of consumers that we interviewed said that they were impressed with how brands handled the COVID crisis. So it indicates that companies have taken measures to make sure that they adapt to use it as a kind of a positive thing to reinforce our messages.
There are many different things within technology innovations, but some of the things are much more simple than that. So, you know, retailers mailing out tape measures to consumers and doing fittings over a ton of virtual meetings, doesn't seem very crazy, but why weren’t we doing that before? I've got no idea. Hotels offering day rates to people who are working from home; remote workers just need to get out of the house from time to time. I'm sure we've all seen restaurants selling groceries, fitness classes going online. I mean, they're all things that we can see happening pretty easily I think in the world even a year ago, but they've just been accelerated and pushed through.
I guess the last thing and some more concrete examples, the businesses that we've seen have got very flexible business models. And by that, I mean are willing to go into offering new products. New services have been the ones that have really come out of this successfully. We worked with a media business right now where they feel that they have a very good sense of information around financial services. So why wouldn't they open a credit card, for example? I mean, the thought of the newspaper and a credit card seems a little bit alien perhaps, but they are a source of information. People go to them. So why wouldn't they? And you see that when you see more, you know, wacky aversions. So see one of the airlines in the far east has turned two of their jumbo jets that are grounded into pop-up restaurants. So, and you can actually book in the different classes, which is quite interesting as you can book economy, business, and first-class. I think it's about $500 it will run you for a first-class suite. I mean, $500 in the grand scheme of running an airline, it isn't going to make much of a dent, but you know, their name in the press, increased brand equity, looking to do something with what they've got. I think one airline potentially has taken it a bit too far; they're literally selling off the china and the champagne flutes and the slippers, and actually bread baskets.
I couldn't believe this, but I saw they were selling a thousand packs of bread to consumers. But actually they got that a little bit wrong because, the site crashed because people were so keen to buy bread from this one particular airline. So you can get it even doing something like that will get some good name in the press and actually get a bit of brand equity, I think can also go wrong. So it's interesting to see the different things that people are trying to do. And then I guess one of the last things that we really saw was that 75% of the businesses in the clients that we've spoke to, so three in four, have said that without a digital presence, they struggled to survive. I actually thought it might be a little bit higher, but three in four businesses they can't survive without it really.
Shane Madden: The spirit of what you're saying is businesses are adapting to an ever-changing environment, and it's been driven by consumer behavior. In this instance it's COVID, so people are not leaving their homes. And so that kind of raises my next point. So there's a lot of speculators that refer to this as the great dispersion or again, it's the great accelerant. And so things happen quicker in eight or 10 months than they did in the previous 10 years and one sector that we can talk about specifically is if we look at retail and, surely some of your clients, and we don't have to specifically mention the client names, but if we look at a stock like Shopify and what they've done in 2020 in terms of not just a market cap growth but also share price, they are probably the unicorn of, 2020 in terms of retail. Then you look at Restoration Hardware, and the reason for Restoration Hardware is people want to invest in their homes because they're spending more time there. So you touched on something there that I think is pretty interesting. And I think you asked online sales increased year over year by 30%. And if we compare black Friday with Singles Day, like the numbers are staggering. So do you have any thoughts or comments in terms of retail and what you're seeing at WPP?
Leigh Gammons: It's the change that you're talking about is staggering. I think I saw something in Harvard Business Review where they said 50 years ago, the average lifespan of a business on the S&P 500 was 60 years, and now it's 18. And on the FTSE 100 is 17 years. And the world continued to change, but some estimate that, you know, in like six, seven years, 75% of the businesses on the S&P will have changed as well. So that's just mad if we think about how much we've changed in 50 years, and we're looking forward to the next seven, but going back to, the businesses that have managed to kind of grasp hold of this and make the most started with people shopping more online, as you say. I think some of the war stories that we've heard from our clients, decision-makers are saying that they've got real difficulty in unifying all the data they've got across all of the different channels; data silos that they've got within their organizations are a massive problem.
And so that's clearly a huge hurdle when it comes to delivering things like a multi-channel strategy, when it comes to delivering personalization at scale. But actually some of the things that we've seen that consumers are more annoyed about or getting more frustrated about is some of those simplify, you know, making sure that websites are performing, that they load quickly, that you're not having to struggle to find content, that you're not having to spend hours and hours looking for things that should be easy for you to find. So although the businesses are kind of running in one direction, making sure that they can personalize everything to the nth degree and, quite rightly spending quite a lot of money on first-party data strategies with the changes to third-party data over the last few years, some of the basic table stakes stuff, that you've got to make sure you get right with your consumers to give a consistent experience and the things that you've got to have.
So we've actually seen a lot of clients who are saying, look, we're not going to be spending huge amounts of revenue on new CapEx projects. We've gotta batten down the hatches a bit at the moment, so how can you make the most of what we've currently got and how can you make it work for us and really sweat the assets that we've got. And then next year we'll probably look at new bits of technology and how we actually kind of take those next steps. So it's really interesting. It's kind of a mixture of, I've spent a lot of money the last five years. And we look at the Scott Brinker diagram of 7-8,000 martech and our tech solutions out there. There's so many, right? And I was saying that we made all these decisions, let's make sure that we can make the most out of what we've currently got. Take stock a little bit before we make that next step. And so, unifying data, getting some of those basics right, which businesses think they've already got. But consumers are telling us still are a little bit missing really. I don't know if you've seen something similar, but that's certainly what we're seeing at the moment.
Shane Madden: Yeah, absolutely. And I guess I have one last question, before I pass over to Whit, cause I do want to raise something, but so Leigh, you touched on something here, which is the unification of each one of the different channels in the value chain. So companies not wanting to go beyond current CapEx because they've got so much, they want to double down on that, makes sense. The big problem, and you're probably seeing this more than anybody, is data, and the management of that data. I'm sure there's so many companies out there with enormous amounts of data segments in data lakes. I guess my question for you is like, are you seeing clients come to you and say, hey, we have all this data. We don't know what to do with it. What should we do it with a view to improving personalization or improving the customer experience?
Leigh Gammons: Yeah. Well actually even more basic than that, we've been asked the question, we're collecting all this data; do you think we should be? The answer often will be, well, probably not. What are you going to do with it once you collect it? And I think you're making sure you're collecting data in a responsible way is one thing. But once you've got it, you've got to be able to drive insights from it and you've gotta be able to learn from it and actually provide a value back to consumers. And some of the research that we've done is that you can... consumers are quite happy for that value exchange to take place as long as they're getting something in return. And what they want in return is the best deal that they can get discovering new products, for example, that are very similar to what they're currently looking at.
But it all goes back to, you know, the last two, three potentially even five years. I think that trust is kind of becoming the new currency of dealing with consumers. So anything that helps gain that trust and not abuse it is absolutely key. So you've got to continue to have those first-party data strategies, either collect that data and make sure that you go into these, I wouldn't necessarily say these days, a personalization at scale strategy is blue sky thinking because so many people are trying to do it, but I would say that going into it with some real outcomes around what are we actually going to give our consumers at the end of it is the most important thing. And I think making sure you've got those goals right before you kind of just dive headfirst into it is a key thing,
Shane Madden: Yeah, that's probably fair, right? Because lots of companies were like, they weren't working backward from what the end goal was. They were probably saying we have all this data, let's optimize or monetize it. And that's not really, to your point, is that's not really the way to handle it. And another interesting thing is, so with the duopoly of, I guess the two advertising mammoths in Google and Facebook, you touched on something there, which I think is really interesting, which is in the face of antitrust and just the lack of transparency to consumers' data, it will be interesting to see what happens to companies and I'm sure clients of yours in terms of regulation around the management of this data going forward. I don't know if any clients of yours have mentioned anything to you, but if you have any insight into that happy, I would love for you to share it.
Leigh Gammons: Yeah. I mean, naming names isn't necessarily the easiest thing, but I'd say there's probably one of the biggest topics that we've had clients talk to us about are CDPs and data platforms and how they all integrate to feed the various different experiences they're trying to serve to customers. And it's not all about just pure personalization. It's also about having a consistent experience across channels, which I think you're going to need a range of different data points, post-digital, online, offline, you name it, you're going to need it really. And the storage and management that is, is going to be paramount to making sure that you've made sure that you maintain trust with those people. So it is something that's popping up on a fairly regular basis. I mean, the anecdote I said before around, a customer saying to us, oh we've got all this data, isn’t it great that we're collecting it?
And we just said, well why do you need it all? And they didn't really have an answer. It wasn't us trying to trip a client over. It's just genuinely, we just want to know what you're going to try and do with it. So I think there's going to be a bit of a day of reckoning around where data sets, what consumers know about the data that you hold on them, it's already happening right now, is as transparent as possible. Because as I say, if you lose trust, there's so many other ways for people to go and find similar businesses or similar products out there that you just lose that customer. And you can't afford to do that in this day and age.
Whit Harwood: From a personalization and design perspective, having all of that data is phenomenal. And the ability to then AB test and serve different front ends to different users on a one-to-one basis is obviously key. Is there a threshold though where maintaining all of those front end designs and just personalized experiences no longer is tenable for a business? And then all of a sudden, from a brand perspective, if you mean something to each individual user, does that dilute the overall brand equity at all?
Leigh Gammons: That is a massive question, to be honest. I would say if you're not striving to do some of those things, then you're probably in the wrong business. I mean, there's fairly well known FMCG businesses, and I think one of their mantras is to make 1 billion personal connections, which is a client of ours. We work with them, and for them to build or to do what you've just described, it's not just about personalizing an experience within a channel. It's understanding much further up the content streams. If you think about the ideation stage, the creation stage of that content, how it is then transcreated and translated and pushed into a dam and pushed out into channels. And then you learn from those insights that it should stop feeding the ideation stage. If you want to be able to do that, you need to have a common view across all the different technologies that you're working with.
Think of all the tools that you need to do that: you need an MRM tool, creative management tools, so you need that full stack view. And then you also need to have a very understandable, but a common taxonomy and tagging process throughout the whole of it, so that you know this bit of content or this bit of information here has done this with our set of consumers. And this is how it works. And so you can do all those things. You can spend all the money in various ways, but if you've not got a view into their taxonomy and that tagging structure, you're not going to get very far.
And it's one of the misconceptions of all that there'll be bits of technology that it can do that, but really there's the technology, the operating model to their use of technology, there's a process change to get from where you are today to where you need to be. And then there's the data underneath it to be able to power those experiences. And you've got those four strands as opposed to just the one bit of throwing in a bit of personalization. And going back to the final bit of that question around brand equity, if you are, let's say, an FMCG or CPG business, and you've got multiple brands within your stable, I don't think it does dilute anything if you actually help consumers discover adjacent products, adjacent services, things that will actually enhance what they're looking for and make their lives a little bit easier. At the moment, people are looking for convenience, wherever they can get it. If you can provide that and you can go back to the point I made earlier about that value exchange. If you're going to say, if you do this, you'll get the best deal within this area. Who's going to really say no to that? But all of the things to power that, as you say, are so broad and it is very difficult to be able to really put your finger on what you need to be able to do to do it. There's no silver bullet at all.
Whit Harwood: Yeah. Actually, one other quick thing I wanted to touch on, which is kind of revenue optimization, deal optimization. And is there... obviously a promotional or inventory optimization against individual users is something that has been around for the last 10 years. Amazon has been giving me good deals ever since I looked at a product three times for a long time. So is there anything though in the... as all of this data is aggregated, user profiles are built out more towards a one-to-one basis. Is there anything from a price elasticity standpoint that you've seen where, what's the next step for price elasticity and on one-to-one user level, or is there anything there?
Leigh Gammons: So I guess the question I would ask back to you is, do you think that's taken place to the nth degree now, or do you think there's quite a way for that to be pushed? I think Amazon, as an example is one example of a business that knows quite a lot about you, perhaps, but if you think of that across all of the different things that you buy, all the different services that you work with, I'm not sure that everybody's doing that to the degree of competency as they could do. So I don't really know how much further that can go. To be honest, I think the more that people end up using data to provide value back to consumers, the less that people are going to be concerned about that. But I think there's still so much around that trust piece right now, that means people know that, for example, that you're being sold to in that scenario. So automatically you are second guessing some of those things. So it's already changing some of your behavior towards what might be a very good deal. So I think there's quite a lot within that that you need to unpack before you'd get to the answer.
Whit Harwood: And it is a loaded question. I do think that is happening at least on the retail level, significantly, and airline tickets are a great example of this too, in terms of just how airlines priced their seats over time. I wonder if coming out of COVID, and this is more just an open question that we can all look at going forward is, can the experiences be sold at a one-to-one level and does a concert mean more to me than it does the next user and how a company could leverage data in a way that would make me pay more for a Bruce Springsteen concert than Shane? Cause he doesn't really care, but it's just something to keep track of over time because I think this happens kind of at the retail sales level, but not necessarily outside of that. It's just a model to think through.
Leigh Gammons: Yeah. And going back to yours and, I'm sure Shane is a big Springsteen fan, but if you need to go to that gig together and you find out that you've paid significantly less or more than your friend, then what does that make you feel about that business and that brand? And I think there's a few different parts of how you want to approach customers and brand equity is one of those things. Customer loyalty is another thing that you need to measure alongside your sales and your topline growth. And if you think that one is going to be compromising the other significantly, then you probably won't do it. And I think having those three or four things constantly being balanced and looked at is how you are going to make those decisions. And I don't think I've come across a business that's absolutely nailed it. So I do think there's quite a bit of a way to go.
Shane Madden: So I have one for you, one of the pivotal changes we've seen during COVID, in line with this great dispersion is, is the explosion or proliferation of OTT, right? So we've got the shared economy, I guess is another one with Uber. And I guess specifically for OTT, for you for Peacock, you're disrupting the whole ecosystem and that media industrial complex. So the old cable, how we were fed information, how we consume that has changed, I think probably fundamentally, or that's a structural change, I think. So where do you see this thing going when people come back to the office? Not even to the office, but when the vaccine starts getting rolled out and people start taking it, where do you see this thing playing out in the next, I guess, 12 to 18 months?
Whit Harwood: Yeah, well COVID is kind of the epitome of something that did accelerate a lot of trends that were already there. We launched our limited release in Comcast markets in April, which was incredible timing to launch a streaming service, a bit of a cheat code, but you know, we were able to get good data about what people were watching and early on in COVID they were watching a lot of comfort food because people were not feeling particularly comfortable about their situation and they wanted to go back and relive the classics of Everybody Loves Raymond and Parks and Recreation, on down the line. I think, broadly speaking, this trend towards desegregation over the course of the last few years, simultaneously coupled with the cord cutting/cord shaving paradigm, which we could also get into.
I think that there's a little bit of a Trojan horse here when you're looking at the virtual MVPDs of YouTube TV, Hulu TV, Hulu with live TV, because those aren't necessarily even cost-saving measures anymore based on your package and your bundle. But ultimately you're looking at kind of all the services and the only way to really get back towards some semblance of a positive user experience is aggregation within an individual platform. And those platforms predominantly are the Fire TVs, the Rokus of the world. I actually think the Google TV OS that sits on top of their new Chromecast hardware is probably the best device that I've seen. But ultimately, what I think happens is, all of Roku, Fire TV, and Google kind of sit as this operating system layer on top of the TV manufacturers.
And so the way that people will ultimately access content will be towards single operating systems and they will choose one of those three primary operating systems. And they will just buy a Samsung TV and all of those streaming services will be aggregated within the operating system that is natively built into their TV. So, as far as what that means, broadly speaking for the internet cable bundle, which has been so tightly tied over the course of the last few decades really. It's hard to say because I think obviously the cable ecosystem is deteriorating, but I think that in the long run, this is a much better experience for users because you have the ability to take this wherever you go. And I certainly have, it's a net benefit to have all my services aggregated, on a Chromecast that I can bring to a hotel room if I want, as opposed to being reliant on the clunky cable box.
Shane Madden: Yeah, for me, that's one of the biggest shifts, but as you said, it's an accelerant, it was already happening. And I guess on that note, so if we take, I think the other three sectors that we've seen paradigm shifts in is travel—so we saw the Airbnb stock, and I think the company is at 80 billion market cap, so it's bigger than the five other hotel stocks combined—that is a really interesting business model because Leigh, I don't know if you use it personally, but I don't know if any of your clients are looking at this as a space. And I say this, right, so 47 million active users a month, 70% of business generated organically, so non-paid media. Whit was talking about Trojan horses. There's no limits, you know, skyscrapers could be the pyramids of the past. And what could end up happening is you could have Airbnb license or use the kind of WeWork licensing model. I just think that's super interesting to see. I don't know if your clients, or if you have any travel and tourism clients
Leigh Gammons: Every client is excited to hear about times that they can get organic customers and traffic to them. And I think its amazing what they've done as a business. They've got a kind of great value exchange there for users of the properties, but also for the people who rent their properties out. So yeah, it already is one of those big changes as we've already talked about Uber, and we talked to how many different things that have changed a lot of the industries that they're part of. I think we've seen quite a lot of our clients over the last few years in particular trying to move things, or have more control over what they're doing. If you go back to some of the numbers I mentioned before around 50% of brand and marketing spend at the moment is being spent on digital and it's going in one way. Traditionally, that's been done by a lot of businesses that sit outside of the brands and organizations that we service.
They work with agencies like hers nowadays. They want to have some more of that control in house and it's to create some of those things that they can put their own stamp on, but also that they can own it a little bit more. And I think that's fair. I think that's why you see quite a lot of insourcing at the moment and you see a lot of businesses looking to make sure that they own how those experiences are created and what they're going to do about them.
Shane Madden: Yeah. I guess, I know we're coming up on time here, but there's probably two other sectors. One of one of which is education and actually Whit and I will be doing another podcast on remote education, but the other one is, we're all in this because we're all human, is healthcare. And I think what we've seen with Amazon over the last two to three months, which is, they're now distributing and sending out prescription drugs via their platform. They're also going to vaccinate their supply chain. So I think Amazon is probably a company that will seize billions from top healthcare firms in the US. It'll be interesting to see what then happens in Europe and further afield. And then it will be interesting to see what happens at retail. So does Walmart get into healthcare via acquisition? I don't know if this is the same in the UK. For Whit and I in the US, what you can do is you can book a COVID test with CVS or one of the big pharmacy companies in the car park or car lot of their property, get a test and then got the test results pretty much shortly thereafter. That changes the face of retail in terms of not just the functional use, but what the future holds, because retail has never been used for distribution purposes and for testing purposes. So if you've got the likes of Walmart, where there's a person physically in closer proximity to a Walmart than a church in the US, so they're everywhere. And I just wonder what'll happen there. And I do think healthcare, as we know, is fundamentally changing. And then you're seeing the proliferation and growth of all these kinds of telemag companies and over the phone concierge services. I would say that education, media, and travel and tourism, as we spoke about, are arguably the ones that are going to change most fundamentally.
Leigh Gammons: On the media side of things, I know what you're talking about a different part of this, but some of the free to air media, I think over the last nine, 10 months, have made a bit of a mistake. I think there's a lot of penalties and fines for businesses that have not advertised over COVID. And what that means is that as soon as there's an opportunity to potentially move away or use different means for their advertisement, they'll go and do it, and I've already seen one CPG business that had talked about doing direct to consumer TV, which if you go back a few years ago, the thought of that is just on no one's mind at all.
But the fact that they've been kind of led down this path and they are being hit with either prospective fines, or they kind of had their arm put behind their back a little bit, that it's going to change the face of how they're going to try and advertise themselves in the future. So I think that was a mistake to be quite honest. And I think that there will be, again, a bit of reckoning around where that money is spent in future.
Shane Madden: All right, guys, that's a wrap. Thirty minutes of good insightful, compelling information from Leigh as always, mate, really appreciate your time. It's most appreciated, love having you on the show. Love talking to you, as always. You're a good mate, so thanks a million for coming on.
Leigh Gammons: Yeah, thanks, Shane. Thanks, Whit. Thanks for having me on, it's always good to talk about this stuff. I guess if anybody would like to learn any more about Wunderman Thompson Technology or me, some of the numbers that I've quoted and some of the stats were from a report called "Experiences Customers Want." Just walk it into Google, you'll find the report itself. And it's got a lot more detail around what consumers are saying around online experiences and what they mean to them. But yeah, thanks for having me. It's been great to talk and look forward to speaking to you again soon. Cheers.
Shane Madden: Yeah. Thanks ever so much. And just for our listeners, just a quick reminder. So Leigh is the CEO of Wunderman Thompson Technology out of the UK. And Wunderman Thompson is part of the WPP Group, which is one of the biggest holding companies, if not the biggest holding agency company in the world. So really great stuff. Thanks a million, man. Appreciate it.