Advertising in a global context

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Sir Martin Sorrell shares his views on how advertising is changing in the technology era, and WPP's success in globalisation.

By: Dr Andrew Lindridge (Department for Strategy and Marketing) , Sir Martin Sorrell (Guest)

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Andrew Lindridge:
The first question we’d like to ask you is considering the change in technology, do you see any future in the role of media and broadcasting for advertising?

 

Martin Sorrell:
Well technology has heightened the opportunities for advertising. I mean there’s this big debate at the moment whether Facebook is a good advertising medium or not, and I think in that particular case it’s a very good branding medium, whether it’s a good in your face if I can put it like that advertising medium is another question. I think it’s very strong branding mechanism which is about word of mouth publicity.

So if you look at Facebook, if you look at Twitter, those are examples of social networks where I think they’re big branding opportunities, out of which there will be opportunities to monetise, as people insist on calling it, I don’t think that’s English actually, but never mind, to monetise these media. Google, of course, with display, with search, with video, with social networks and more importantly with mobile, offers important opportunities.

Now today WPB has 30% of its $16 billion of revenue last year projected by analysts and $17 billion this year coming from online, so the answer must be a resounding yes to the question does technology bring more advertising and marketing opportunities than less. But the issue is they’re different. They require different people too, development very different to the old days of free to air television, although I’d have to say that free to air television in its classic style has actually benefitted from the rise of the new appliances.

I mean using a BlackBerry or an iPad or a smartphone, you’re integrating that with live television in a way which has surprised us actually, since Lehman in September of 2008, I would say we’re surprised by the strength of traditional television, whereas newspapers for example have come under very heavy pressure.

Andrew Lindridge:
Alright, okay, thank you for that. WPP seems to have managed the wider effects of globalisation in coordinating a number of people, number of countries and a number of different organisations, what lessons can other companies take from that?

Martin Sorrell:
Well I don’t know whether we can teach anybody anything. I think we tend to follow, I think we tend to be market driven, so our mantra is new markets, which is the BRICs and Next 11 plus the MISTAs, some people say, Mexico, Indonesia, South, I think South Africa or South Korea and Turkey, what Jim O’Neill at Goldman Sachs calls the new G8, which is the BRICs plus MIST or the CIVETS as The Economist calls it.

The reason that we’re expanding there is because we’re following our clients. So we’re very market driven. I mean in relation to digital, that’s something our clients are exploring so we explore it too. So just like digital at 30% of our revenues, the BRICs and the Next 11, Asia, Latin America, Africa, the Middle East and Central and Eastern Europe are 30% of our revenue. So I would say we’re just sensing where the market’s going, and it’s the same for consumer insight, which we think is critically important along with the new markets and new media, and last but not least horizontality, which is our attempt to try and integrate our offer for our clients in a more intensive way.

So I would say, you know, I’ve just come back from Singapore this morning, and we were in Thailand, we were in Vietnam, we were in China, in Singapore and the Philippines, and when I think about those markets, and for example when we were in Thailand we were discussing fervently Myanmar, which is 66 million people, it’s another Vietnam in the making, Vietnam has 85 million people in the marking, and so we will aggressively expanding into Myanmar.

Given that political developments just as I got off the plane this morning I see there’s an article about the Myanmar government putting in foreign direct investment legislation to speed investment in the economy, tax holidays actually for five years, and making foreign ownership of Myanmar assets more easily available.

So we’re just following the expansion of our clients. I think net net, I mean I can’t find many CEOs who are attracted to the opportunities of investing in Western Europe; on the other hand I can’t find any CEO who isn’t attracted to investing in Asia or Latin America or Africa and the Middle East or Central and Eastern Europe.

Andrew Lindridge:
Absolutely. So on that basis of coordinating and going to countries like Asia, how do you manage the people perspective, because obviously going to different companies, different contexts?

Martin Sorrell:
Well the honest answer, you know, the honest answer is with difficulty. We have 158,000 people in 109 countries, and it is very difficult. I think the golden rule, if there is a golden rule, is to make sure that you develop national talent in each country. So if you’re in Singapore, you know, we have almost 3,000 people in Singapore, it’s become a regional hub, there are ex-patriots there, but it’s really getting good Singaporeans. If, take China, we have 14,000 people in China, in Greater China including Taiwan, Hong Kong and mainland China, and it’s really our key leadership there, basically Chinese nationals.

Now some of them it’s true have come from Taiwan and Taipei, went to China many years ago to live in Shanghai and Beijing, but basically I think the golden rule is that, you know, our Indian business where we have about 9,000 people is extremely strong. It’s strong not because of ex-patriot talent coming in there, but it’s strong because the native talent, our creative director of Ogilvy there was just voted one of the major personalities of the industry this morning actually – Piyush Pandey and Ogilvy – and, you know, a very good example of a world renowned, creative person, a creative director, who’s been done outstandingly well, not just India, not just Asia, but on a worldwide stage. So when you go to Cannes, you know, he’s fated just as anybody else from any other country. By the way a thing that really irritates me is when people from the US or Britain always talk about, you know, the advertising industry in London and New York being paramount and everybody else trying to catch up – I think that’s nonsense. I think every market has tremendous talent. It would be outrageous to suggest that 1.3 billion people in China or 1.1 or 2 billion in India can’t produce even better advertising agencies than we have.

Andrew Lindridge:
Okay, thank you.

Martin Sorrell:
Thank you very much, enjoyed it. Thank you.

 

Sir Martin Sorrell was talking to Andrew Lindridge after the recording of an episode of The Bottom Line.

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