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NEWS11 October 2018

Sorrell: ‘Last chapters have not been written’

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UK – Sir Martin Sorrell talked about missing the scale of WPP, the speed of digital disruption in advertising and how clients want faster, better and cheaper in an interview at The Festival of Marketing 2018.

Sorrell, executive chairman of S4 Capital, started his interview with Kate Holton, deputy UK bureau chief and chief companies correspondent for Thomson Reuters, by saying what a busy summer he’d had. It had included attending the Burning Man festival – “a good icon for what’s going on in this industry”.

“There’s no business I’m aware of – or CMO, CIO or CFO – who isn’t affected by digital transformation and disruption,” he declared.

He spoke a lot about the size, scale and role of Amazon, Google, Facebook and co, saying “radical evolution isn’t the right phrase – it’s a radical revolution”.

But he didn’t see these giants as enemies of agencies, saying there were more partnerships that people might think. “They are media owners,” he said.

And Sorrell didn’t see any indications of advertisers pulling back from online advertising, despite all the furore around fake news, transparency, Russian involvement with Brexit and elections, etc. “I don’t see, with the exception of regulation, a check on their growth.”

Holton asked him what clients want more of. “I wish I knew,” he said, before elaborating. “Since starting S4 and the merger with MediaMonks, we’ve done a lot of presenting and pitching and the answer is ‘faster, better, cheaper’. Whether we like it or not, that’s what’s happening. Packaged goods clients faced tepid growth post-Lehman, therefore there’s very little pricing power, so they focused on cost.

“We have to be more efficient. Of course creativity is at the core of what we do but the nature of creativity has changed… to suggest that data doesn’t inform or devalues creativity is nonsense. It helps it,” he added.

He critiqued the agencies in turn. “On paper, Publicis has got furthest towards simplifying its structure, but in practice Saatchis is no longer the force it was, Leo Burnett is no longer the force it was, and BBH is no longer the force it was, because you slam the name Publicis on top of it and you devalue the brand.” Others got off slightly better – Omnicom, “no strategy but very good businesses”; Dentsu, “in the best position” – and concluded that “they’re all moving in the same direction, the only difference is the pace”.

So while he admitted that he missed the scale of WPP, he said he is glad to have a more nimble, digital-focused business now.

“Everything we’re doing is purely digital. The next 12-24 months are going to be critical. There will be shifts in the industry that will be even stronger than we thought… the pace of change even more violent. So, a clean sheet of paper has more advantages than being weighed down by a legacy company.”

When pushed on how he felt about WPP now, Sorrell said he wanted both WPP and S4 Capital to be successful. “I’m still a top 10 shareholder in WPP, so from a personal financial point of view I take it very seriously.”

However, he also said, somewhat enigmatically: “Last chapters have not been written. The forces at work are phenomenal.”

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