“We need to encourage our established, legacy businesses to change the engines on the aeroplane – while it’s flying”, says Sir Martin Sorrell
Writing for The Telegraph today, WPP’s Sir Martin Sorrell has detailed the evolving digital market, urging agencies to “embrace the digital revolution.”
He says that traditional business approaches must move quickly and change violently. Citing WPP as an example he claims its digital revenues have gone from "a rounding error to a third of the business."
He writes: “Change is likely to continue, in some cases painfully. For example, we know that consumers in the US spend less than 10 per cent of their time with traditional newspapers and magazines, which are produced by felling trees and distributing newsprint – not necessarily economically efficient or environmentally friendly. We also know that clients and agencies still commit more than 20 per cent of their budgets to these traditional media. This weighting clearly has to change.”
“We also know that consumers spend about one-third of their time on the internet and mobile and we, clients and agencies, invest only 20 per cent in these media. This also has to change.”
He goes on to say that encouraging established digital businesses to expand even faster and further must be a priority and that agencies must add and explore new capabilities and talents. He says that WPP's minority stakes in Vice, Globant, JumpTap, Ace Metrix, mySupermarket and eCommera are "steller examples" of WPP getting involved with new firms with the aim of broadening its client offer.
With all this, Sorrell says, “we are increasingly embracing the application of technology to our business, along with big data, which means we are Maths Men as well as Mad Men.”
Media investment management has, therefore, become even more important for WPP. Sorrell says: “If the new technology companies really are new media owners, which we believe they are, our clients require independent evaluation of how much they are spending on these media and where it’s spent – often described as the “Holy Grail of advertising”.
“As a result, our target customer is no longer just the chief executive officer and chief marketing officer but, increasingly, the chief information officer or chief technology officer, along with the chief procurement officer and chief financial officer.”
Sorrell's piece for the Telegraph can be read in its entirety here.