WPP chief executive Sir Martin Sorrell has said the advertising industry doesn’t report transparently and called out competitor Omnicom’s "barter business" as a unit which runs without disclosure.
Speaking at an Advertising Week Europe session titled ‘Business is Media’, Sorrell was asked by Bloomberg anchor Francine Laqua to comment on what he saw as the next big thing to disrupt business.
He shrugged off the question, saying he “didn’t know”, but suggested the revenue figures companies report “mirrors disruption” and the biggest issue he sees is that the industry doesn’t “report transparently.”
“It’s about time you as a responsible investigative journalist ask the question,” he told Laqua. “Delve deeper. Do they disclose a revenue number, a net sales number? The reason the revenue number is important [is that] it mirrors disruption. The biggest driver of growth – which [at WPP] was eight per cent last year – is online digital media planning and buying. Xaxis drove a lot of that incremental growth. That’s why it’s important. Transparency is really important.”
Adding to the point, he directed attention to rival Omnicom’s “massive barter business” which includes ICON International. He said simply looking at their websites shows “how proud they are of that part”.
The ICON website describes the company as the “North America’s top corporate barter company” and calls the practice an exchange of an asset which has lost value for goods or services.
“But nobody knows how they account for it," said Sorrell. "Barter is trading inventory. There are clear valuation issues about how you measure and account for it. It’s significant. They have a big telesales operation in Germany and Spain which is supposedly one of their biggest units in Europe; no disclosure.”
Sorrell previously referred to the ongoing issue of transparency surrounding the programmatic trading space in particular, adding that he was "puzzled" by the ongoing debate of transparency within it, adding: "the last time I checked, our margins are only 15/16 per cent of revenues".