From ARF Re:think 2011, WPP CEO Sorrell Says IBM And Accenture Are At The Gates

ARF Re:think 2011Tuesday night's keynote address at the Advertising Research Foundation's Re:think 2011 show featured WPP Group CEO Sir Martin Sorrell, who reviewed his notes on what the future holds for the advertising world. He stressed that ad research will be in the middle of figuring it all out - and so will the importance of data. Invoking the immortal words of David Ogilvy, Sorrell said, "The most important word in the vocabulary of advertising is 'test.'"

Preparing the crowd for his world view on ads, Sorrell offered that WPP Group's competitive set is changing from Omnicom, IPG, Aegis and other ad holding companies to the media companies "masquerading as technology companies."  Specifically, he identified Google, Yahoo! and Aol and added that "they aren't really technology companies, they are media owners." Here it is again - Google among others is being labeled as media which may give pause to content owners who use Google's technology.

Next on the competitor list came IBM and Accenture who Sorrell said are "increasingly attacking the supply-side, the technological platform in our industry as opposed to the demand-side or front-end where the CMOs traditionally operate. These competitors are reaching out to the CTOs and CIOs in companies rather than CMOs."  Interesting to hear the agency-side clearly seeing the big tech players on the horizon, and though Sorrell didn't say it explicitly, these tools being offered by the IBM's and Accenture's of the world will need to be serviced by someone (the agency) and ultimately report into the vision and dashboard dials of the chief marketing officer.  A conundrum for the agency!

How much can automated ultimately? Plenty.  Will humans still have their place as agents of the client?  Yes, but the question becomes who the humans are on the agency side? A likely scenario:

  • They'll need to be educated and savvy on the latest, data-driven tech.
  • Still need to be idea machines (pun intended).
  • There will likely be fewer of them, but they'll be more expensive in comparison to today's agency org chart.
  • Oh and it won't help that the cost of the consumer's media has sunk to nothing as Sorrell noted.

Later, he admitted as he has before that hiring remains a challenge. It only gets more complicated as the agency's marketing idea and implementation services will begin to include data-driven, tech services.

The second part of Sorrell's speech touched on the "Nine things that we see going on around the world." In other words, trends that he thinks will drive WPP Group's business and so, too, the business of the advertising community.

Here's an abbreviated list of the attributes in play:

  1. Globalization - It's not just about America, or being like America, anymore, countries around the world are growing rapidly and need service.
  2. Overcapacity - Too much inventory. Too much production.
  3. Shortage - As in talent!
  4. The Power of retail - Walmart is the 7th largest "country" by retail sales according to Sorrell.  And their army has "greeters."
  5. Internal communications - pushing out (down?) the positioning of the company to the employee edges.
  6. Balancing act between global and local - Local access is important in spite of the necessity for company's like WPP to be global.
  7. Procurement - The balance of power inside companies has shifted to financial types as opposed to the marketer says Sorrell.
  8. Doing good - Sorrell thinks building long-term brands means you're going to have to do "good" for the consumer. This echoes P&G's purpose-driven marketing, for example.
  9. Government not just as a regulator but as a client - Sorrell cited recent UK government investment as exemplifying the way government can affect markets including financial.

Optimize the targeting of these attributes and you may have the agency algo of the future.

By John Ebbert

1 Comment

  1. Commenter

    Quite interesting strategic thinking by Sir Sorrell.

    Don't understand the hand wringing about lack of talent to hire. It is obvious - you pay well (like the hedge funds or even the tech companies do) and evangelize the technological, sociological and psychological problems that are being addressed for brands. Hiring like this at multiple levels and giving the incoming folks freedom to build much more technical and analytical organizations will make the problem go away. You cannot insist that you are going to keep your current business model of throwing multiple account managers, project managers, supervisors, analysts and co-ordinators at a single account. Nobody can build a scalable enterprise with those organizational structures.

    Reply

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