NATPE Keynote: WPP’s Martin Sorrell Urges Competition & Collaboration

MIAMI: Sir Martin Sorrell, the CEO of ad giant WPP Group, delivered the opening keynote at NATPE under the banner “Kiss & Punch,” representing the need to cooperate and compete in the media industry.

Sorrell began by talking about how collaboration and competition can “coexist for the benefit of all.” He stressed the importance of learning how brands and content can work together for the benefit of both.

“The talk-to-do ratio is very high,” he said. “There’s always been a lot of talk in our industry amongst media owners and amongst clients about content creation. There’s been a lot of talking and very little doing.”

Sorrell continued, “My basic plea or hypothesis is that what we have to try to do is work the triumvirate.” The triumvirate being the clients, the media owners and the agencies. “That alliance has to work much more closely together and we as agencies have to treat the media owners almost in exactly the same way as we treat our clients, we have to walk with them much more closely.”

A central point he emphasized was that the traditional way of media owners selling pre-packaged ideas no longer works. “[Media owners] have pre-packaged ideas that you then try to sell to clients. Often the decision depended on the likes or dislikes of the management of the company, rather than in the strategic relevance of the package or idea for the company.” He stressed the importance of understanding what it is clients want, what they’re trying to do and how they’re going to go about doing it.

Sorrell noted a number of changes taking place in the industry that media owners need to think about and take into consideration. The first being global shifts, in political, economic, social and industrial power. He noted in particular a shift of power to the south, in countries such as Brazil, as well as the markets of the southeast (Africa) and Central and Eastern Europe (Russia). The second change, said Sorrell, is production capacity. He explained that there’s overcapacity in terms of production, but an under capacity in the supply of people. “Companies will have to differentiate themselves by the quality of their people and their ability to attract, incentivize and motivate people.”

The web is another change Sorrell pointed to, with tech companies now becoming media owners. Internal communications, he said, are becoming increasingly important, since there’s challenges in how to organize the collective of your company to all “look the same direction.” The other areas of change he noted were the power of retail; the rise of the finance function, as clients are putting more emphasis on costs; the role of government; and corporate social responsibility, with the industry realizing that “doing good is good business.”

“These issues are critically important when you think about what our clients are doing,” said Sorrell, “and increasingly they mean that brand and innovation are critically important in how the clients go about it.”

He continued: “What does this mean for you and us in terms of what we’re doing and how we’re going about it, kissing and punching in the content and creation world? The first thing is we have to think about content in the context of how our clients’ business is changing. We need to walk very closely with media owners, just like our clients, particularly because the legacy media owners are under increasing pressure. We also have to work more in the content and branding area.”

He revealed that one of the things WPP is in the process of doing now is forming a programming and content division that will “create and will cooperate with others—that’s where the kiss and punch comes in,” Sorrell explained. “We are going to initiate and we are going to cooperate increasingly and in the content area because that we see has been critical as we develop our relationships with our challenged clients…and challenged media owners and very different new media owners who are very hungry to explore all these areas and develop platforms and content.”