The “new ARF” is a Network, as such, we are going to connect the world’s most interesting leaders attending here at the Consumer Electronics Show to you . . . right to your desktop.
This blog entry will share highlights from our 1:1 interview between Sir Martin Sorrell, CEO of the WPP Group and Gayle Fuguitt, The ARF CEO. Plus some insights from WPP’s Irwin Gotleib, the pioneer of the CES floor tour.
The conversation began with a discussion of how advertising works today.
In the face of wearables, the Internet of Things, the smart refrigerator and other new tech solutions seen at CES, where is advertising today? Sir Martin challenged what is “advertising”. Of the $20bn in WPP revenue only about $4bn comes from what is “advertising” in the Mad Men sense.
The battle from Sir Martin’s perspective is not integrating new technologies but combatting “short-termism” . . . the pressure for next quarter results. Sir Martin sees the upshot — prioritization of cost reduction over top-line growth, especially when overall economic growth is modest. The challenge for our industry is keeping focus that we’re an investment not a cost and that investing in Brands makes sense.
The value they put on analytics, research and insight makes WPP is an important The ARF partner. Sir Martin, coyly admitted that some other holding companies may have talent up to the level of WPP talent.
This has required WPP to establish differentiation and analytics is key to that differentiation. WPP differentiates with technology (Xaxis), data utilization (Kantar) and content development (Vice, Media Rights Capital and Indigenous Media).
In one of their most innovative moves WPP renamed and restructured their data capabilities. Retitled as Data Investment Management and reformed to collaborate data resources horizontally, especially data alliances between Kantar and GroupM in large scale pitch wins.
Looking ahead in 2015, Sir Martin sees
- Modest overall economic growth and continued G2 dominance
- Geopolitical tragedies continuing to put Clients under pressure
- Short-termism, yes. But optimistically an increasing industry understanding that cost side change have a finite limit and investment is essential to growth.
Following our chat, Sir Martin was on his way to connect with Irwin Gotlieb, the chairman of GroupM, who make WPP the largest buyer of media in the world, for his floor tour.
For our The ARF members who have never attended, the sheer scale of the Consumer Electronics Show is overwhelming. Navigating the floor is impossible and so the senior folks attend a floor tour. Spend any time on the floor of CES and you’ll see dozens of groups navigating the chaos like a cycling pace line, hooked up to wireless headphones and following a giant hand-held sign through the crowds.
Mr. Gotlieb’s are among the most desired and most famous of the floor tours. Begun in 2003 and expanded in the coming years as “all of a sudden marketers discovered correctly that media and tech have fully converged and that you can’t distribute your messages unless you understand the technology”
The 2015 Irwin Gotlieb CES floor tour starts at Sony, moves along to Samsung, LG, Panasonic, Dish Network and finally Intel (about to become a big player in TV when it rolls out its planned web TV service). Insights from this year’s tour include:
- “The smartphone you buy in the next few months is going to be more powerful than the laptop you bought last year.”
- Regarding connected cars, “The automakers aren’t the best guys to be making consumer interfaces.”
- On Microsoft (a WPP/GroupM client): “Clearly Windows 8 is a disappointment, but it is not a disappointment because of lack of innovation.”
- On Mr. Gotlieb’s wish list. His next TV a 4K Sony projector and for his house, Mr. Gotlieb wants the LG closet that steam cleans clothes and shakes them wrinkle-free.
Interestingly, Mr. Gotlieb in speaking about HiSense, an electronics company run by the Chinese government said, “CES isn’t only about what’s here, but the signals sent by who isn’t here.”
Mr. Gotlieb’s CES trip also included the panel discussion, “Reaching the Next Gen Consumer on TV & Video,” where he cautioned that we are not dealing with convergence of traditional TV and digital media anywhere that we should. But that even with all problems, Mr. Gotlieb believes “convergence is coming — moving from selling spots to buying impressions, as well as seeing some real synchronization of advertising with the second screen.” The panel discussion found unanimous alignment in the need for better measurement and that remains a troubling issue, hurting the convergence of buying and selling TV media. Media sellers and buyers need to find ways to more aggressively work around these concerns.
Somehow aggressiveness brings us back to Sir Martin Sorrell and a favorite moment from our discussion was asking if he had business decision regrets.
He confessed that despite being ahead of the curve in China, he wished he were even more aggressive in fast growth markets and despite hostile take-overs of JWT and Ogilvy & Mather, he would have been even more aggressive in digital acquisitions.
Stay tuned right here more exclusive insights from Sir Martin Sorrell and leaders on-site with The ARF at CES 2015.