WPP chief Sir Martin Sorrell has said he is "puzzled" by some of the debate circulating around transparency in the programmatic ad trading market.
Speaking at the Ad Tech conference in London he decribed WPP's trading desk Xaxis as an “agnostic” proposition and said when it moved into the space it gave existing clients and opt-in choice rather than opt-out.
“Being agnostic is critical. I have to say I’m a bit troubled by the debate around transparency,” he said.
“The answer to the transparency issue has achieved a little notoriety. We decided to do this on an opt-in basis. We ripped up 2,500 media contracts. We explained to clients what was happening and told them they could opt in.
“Some of them chose not to, largely because of the transparency issue, which I’m a little bit puzzled by because nobody knows what happens when you double click with Google or use Facebook. People don’t know how they work. Algorithms change, and people don’t know how they change.
“The last time I checked, our margins are only 15/16 per cent of revenues. Last night I checked Facebook and Google and theirs are in the stratosphere – up to between 40 and 50 per cent. What we’re trying to do is act as we have always done in the middle.”
WPP recently began challenging tech giants with investment in AppNexus' Xaxis real-time buying technology, although Sorrell repeated his view that many tech companies are “masquerading” and should instead be considered media owners – such as Facebook and Google.
Meanwhile he also reiterated previous comments made at IAB Engage last week during which he emhasised the importance of being "paranoid" when it comes to staying ahead in digital.
He also once again warned delegates to be vigilant when it comes to the Chinese, particularly with ventures such as Alibaba, and added said that emerging markets such as Brazil and India are fundamentally more mobile-focused than western counterparts and will potentially be the source of the next wave of disruption.
“As far as tech is concerned I would simple say watch out for the Chinese,” he said. “We in the west are a bit complacent at times and should become a bit more paranoid.
“There are different patterns of consumption. They’ve gone straight to mobile smartphone technology in these markets [China, India]. China has reached the tipping point. We’re going to see I think some big changes in consumer media habits, particularly internet and mobile, and then I think we’re going to see a different technology marketplace in the sense of who are going to be leaders.”
He added that changing technology had transformed the industry and three quarters of WPP’s revenues now come from “areas that Don Draper wouldn’t recognise”.
“Media and data together are half the business,” he said. “If I throw in digital that takes three quarters of the business to areas that Don Draper wouldn’t recognise.”
According to Sorrell, the traditional ‘mad men’ model of advertising is being replaced with “mass men and mass women”, and it’s likely that next stages will include the “fusion” of the roles of chief marketing officer and chief technical officer, while WPP will in future employ workers from more of an engineering background in order to maximise data and analytics capabilities.
Last week Sorrell described Google as a “frenemy” and said WPP’s biggest media relationship is now with the tech giant, which has overtaken 21st Century Fox and News Corp.