Sir Martin Sorrell was the keynote speaker at the recent growth faculty in Sydney. He introduced himself as ¾ of a Clooney (George Clooney being a previous speaker at the growth faculty who attracted a slightly bigger audience). For those who are more familiar with blockbuster movies than the advertising industry, Sir Martin Sorrell is WPP’s CEO: the world largest advertising company, with prestigious names such as Y&R, Ogilvy, Buddy Media…. WPP employs 162,000 people in 2,500 offices across 110 countries.
“Persistence & speed” and “Create your own luck” are Sir Martin’s mantras. These would explain why he positioned his group in China 10 years prior to any other global agency and is now investing in Myanmar!
During his presentation he touched on a myriad of interesting facts and anecdotes about the world economy, fast growing markets, new technologies, finance & acquisition… but what I found mostly valuable are what he considers to be 7 critically most important trends. They basically all evolve around technology and geography
1/ Shift in the balance of power:
From west to east. In the early 1900, China & India represented apprx 50% of the worldwide GDP. This will turn around and they will be there again by 2030. It’s back to the future!
2/ Significant over capacity in every industry:
The auto industry crisis is the perfect example.
In this context, finance and procurement have become more powerful than marketing. A mistake t his view! In an overcapacity world, the need for differentiation is critically important… cost cutting can’t create success, but big ideas and creativity can!
He also made us all aware that shortage of talent due demographic changes is only going to get worse…
3/ The Web:
Internet grew from 10% of WPP revenues 10 years ago to 32% today; and still web and mobile are the 2 biggest disconnect between users consumption and business focus. They are where users spend about 30% of their time but only attract 19% of ad spend…
To give you an idea of the magnitude of the shift powered by Internet: WPP buys 72 Billion of media per year: $2.5 billion worldwide with the biggest traditional media owner. This year Google will represent $2.3 Billion (might even become biggest media investment) because it’s powerful in search, display, video, social and most importantly Mobile. Sir Martin thinks that Google’s acquisition of Motorola is the single most important catalyst to the growth of mobile!
I also liked the fact that mentioned Facebook as branding medium, not an advertising channel (food for thoughts!).
He says that Internet des-intermediates traditional business.
4/ The power of retail:
Main retailers are putting tremendous pressure on all manufacturers, which then pass this pressure down the economic chain. Not surprising to see so many consolidations happening to reduce costs. It has only intensified since the GFC.
Government intervention will be with us long term.
6/ Global & local:
The squeeze in organizations will happen at regional levels and companies will be run at global and local level.
9/ Corporate social responsibility:
For all big organizations such as Unilever, P&G, Ford corporate responsibility is now front & center to their strategy. Not a nice to have any more. He referred to Lord Brown, former CEO of BP who said” doing good is good business.
That summarizes 90 minutes of fascinating and inspiring presentation. Closed off by the WPP strategy for the future explained in very simple words: new markets/ new media/ consumer insights/ horizontality!