WPP CEO Martin Sorrell believes that the definition of advertising as we collectively understand it is outdated. Branding needs a rebrand.
In a conversation with Medialink chairman and CEO Michael Kassan at Advertising Week in New York, Sorrell said that advertising today encompasses much more than “traditional creative,” including data, visualization and even health care.
“We need to rename it because it encourages people to think that creativity is the preserve or reserve of that creative department, of that creative director in that so-called ad agency,” he said. “It is not — 75 percent of our revenues come from stuff that Don Draper wouldn’t recognize.”
Sorrell also dished on a variety of media topics during the half-hour fireside chat, including his take on measurement firm comScore’s acquisition of Rentrack, why talent is still the biggest differentiator, how Google and Facebook are masquerading as tech companies and even ad blocking. Some highlights:
The industry was crying out for the comScore-Rentrack alliance
It is no secret that Madison Avenue has long hoped for comScore and Rentrak to join forces. WPP itself played a part in encouraging the alliance as a challenge to Nielsen’s monopoly, taking significant minority stakes in comScore and Rentrak in the past year. Sorrell acknowledged that measurement “has been an area we’ve been focused on for many years” and that WPP had identified these two companies as good investments.
“I don’t believe in plunking huge amounts of money into companies — particularly when valuations are high — but these two companies struck us as being interesting companies,” he said. “We put stakes in them and tried to encourage them to get together. The industry was crying out for it.”
The talent pressure is enormous
Sorrell acknowledged that he’s not always “optimistic” and that the pressure to acquire and retain talent is constant.
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“If you’re running a legacy company, a client company and to some extent even an agency, and you look at the spectrum — on one end you have the disruptors like Google Facebook and favorites like AirBnb and Uber. On the other end, you have the ‘3G zero-cost-based budgeting model’ companies. And in the middle, there you are trying to run this company. The pressure is enormous. Talent is the traditional differentiator of agencies, and it continues to be the traditional differentiator.”
Don’t trust measurement from giant tech companies
Sorrell admitted how software companies like Oracle and Salesforce, as well as consultancies like Accenture, Deloitte and IBM are competitors. And he didn’t mince his words in calling Google and Facebook his “frenemies.”
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“These are tech companies that are masquerading as tech companies but at heart are media agencies — they are trying to monetize inventory. When people say, ‘Oh Google can provide measurement,’ I say, ‘Think again.’ I have the deepest respect and admiration for Rupert Murdoch, James Murdoch … but you wouldn’t ask them to validate your media plan with them or their media assets. Why would you do that with Google and Facebook? You cannot be the player and referee. It doesn’t make sense. The opportunity for a third-party referee is enhanced in this environment. In terms of sales effectiveness though, Google search is demonstrably the most effective.”
Ad blockers are like DVRs
Some industry folks may be scrambling to to figure out what ad blocking could do to their businesses, but Sorrell was unperturbed when Digiday quizzed him after the fireside chat, likening it to DVRs a few years ago.
“I think essentially if you look at it, more than 90 percent of the activity on iOS and Android is on apps, so it’s not affected by ads. It’s like DVRs; we were all worried about them too. That doesn’t mean we shouldn’t be worried about DVRs or ad blocking, but when you actually look at the numbers and who’s using what technology, it’s very, very limited. But that doesn’t mean it’s not a threat at all.”