Tag: Martin Sorrell

Artificial intelligence to be a catalyst for increased ad revenues: Martin Sorrell

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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In the ever-evolving landscape of advertising, the integration of artificial intelligence (AI) has emerged as a transformative force. Martin Sorrell, Founder & Executive Chairman of S4 Capital, believes that AI is a catalyst for increased ad revenues, primarily due to its influence on visualization and copywriting.

Moreover, AI’s capacity for hyper-personalization is highlighted by Sorrell. He said as AI algorithms become more sophisticated, advertisers can create highly personalized content tailored to individual preferences thereby enhancing the effectiveness of advertising.

Sorrell foresees a significant shift in the landscape of media planning and buying, with AI and algorithms challenging traditional human-driven approaches. He suggests that the industry’s workforce, which currently comprises 2,50,000 individuals, may experience a reduction in demand due to AI’s ability to deliver more effective outputs than human judgment.

AI’s impact goes beyond ad production and media planning; Sorrell identifies general efficiency and the democratization of knowledge as two additional areas of transformation.

Linear TV, according to Sorrell, is facing substantial pressure, with a continuation of the downtrend in ad revenues. Sorrell predicts that digital ad revenues will continue to strengthen, reaching 70% by 2025 and solidifying its position as the dominant force in the advertising market.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Brands taking stand on social issues welcome, but there are pitfalls: S4 Capital’s Martin Sorrell

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The proliferation of harmful content on social media has been a major point of concern for advertisers around the world. In July this year, more than 1,000 brands boycotted Facebook, YouTube and Twitter for their poor handling of hateful content. That move led to the big social media companies and the world federation of advertisers striking a deal to allow external audits and implement common standards to deal with harmful content.

We have seen two major brands – Bajaj Auto and Parle go public with their decision to stop advertsising on channels, which according to them, carry toxic content.

To add to the woes of both advertisers and broadcasters, there are allegations of TRP fixing linked to 3 channels, a matter currently under investigation.

In conversation with Shereen Bhan a veteran ad man, and long-time India observer, Martin Sorrell, CEO of S4 Capital said, “Issues about taking a position on social issues, or ethical issues or moral issues make sense. But we careful what you wish for because we all deal in very varied communities, those communities have open access now to social media.”

“The nature of the technology is so pervasive now that the power of these social platforms are considerable. These positions have to be thought through and you probably have to be prepared to take some flak from parts of the community that may not necessarily agree with the position you are taking.”

He further added, “You have to be prepared for the downside as well as the upside. Overall taking a position is to be welcomed. I think brands, consumers and people – all stakeholders whether people work in company, government, all forms of stakeholders, all welcome in one way or another, companies and brands and operations taking a stand, so on balance to be welcomed, but there are pitfalls.”

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

New WPP boss has work to do to strengthen US business

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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WPP’s new boss Mark Read vowed to invest in creative talent in the United States to strengthen its position on Madison Avenue, as he seeks to rebuild the ad group by prioritising sustainable growth over short-term profits.

Presenting the group’s first-half results after being confirmed on Monday as CEO, Read said WPP had returned to top line growth for the first time in more than a year and nudged the 2018 net sales target higher, but margin concerns set the tone.

Shares in WPP, the world’s largest advertising company, fell 8 percent, the biggest loser on the FTSE 100 blue chip index, after it said the cost of returning to sustainable growth would lead to a cut in its 2018 margin outlook.

The results showed the challenges facing Read as he seeks to reposition the British company in the face of cautious client spending and increased competition from Google, Facebook and consultants such as Deloitte.

The group is also still recovering from the acrimonious departure of its founder and veteran CEO Martin Sorrell who left in April following a complaint of personal misconduct, which he denied.

“We took a view to get the investments in now to deliver sustained growth rather than hold back on everything to make the number,” Read said of the group margin of 13.3 percent, down 0.4 points.

WPP owns some of the most storied names in advertising, such as JWT, Ogilvy, Grey and Y&R. It combines these with data analytics, media planning, public relations and consultancy and had outperformed peers for several years until 2017.

But the market leader has been hit particularly hard in the last year as the broader industry goes through a period of unprecedented change, with clients using the giant online platforms of Google and Facebook to reach consumers.

WPP clients such as Unilever and Ford have also called for WPP to simplify its offering, to provide an integrated service via fewer people, while some clients are taking their digital media buying inhouse to save money.

All of these trends are applying pressure.

TIME TO REBUILD

The greatest pain is being felt in the United States where a fall in net sales accelerated in the second quarter, down 3.3 percent compared with the 2.4 percent fall recorded in the first four months of the year.

Read said the traditional advertising agencies and data analysis groups in the United States were particularly struggling as big companies such as packaged goods group P&G reviewed how much they spend.

“We have to reposition our networks and strengthen the creative agencies,” he told Reuters.

“We need to invest more in creative talent there and strategic talent. Sometimes when you’re faced with cost cuts you take the wrong people out. So we need to make sure we have the best businesses in those areas.”

Read has promised to update the market on his broader strategy for the group by the end of the year, after he started selling some joint venture holdings to pay down debt.

Analysts described the results as a mixed bag, with the return to first-half net sales growth of 0.3 percent overshadowed by the warning that the full-year profit margin would be in line with the first half, down 0.4 points.

“Despite the shifting sands, WPP has delivered a robust first-half performance,” said Richard Hunter, head of markets at Interactive Investor.

“Nonetheless, there are concerns for the group, some of which have been inherited. There is something of a struggle within parts of the brand consulting unit, and the United States in particular, which is slightly alarming given the strong current growth being seen in the world’s largest economy.”

At 0915 GMT, the shares were down 6 percent, valuing WPP at 15.2 billion pounds and putting it on track for its worst day since 2011. They have now lost 15 percent in the last year as investors were discouraged by weak financial results and, until recently, uncertainty about the group’s leadership after Sorrell.

The results keep WPP in the strugglers’ camp, alongside peers Omnicom and Publicis while earnings reports from New York-based IPG and Japan’s Dentsu have looked more buoyant.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

WPP names insider Mark Read as new chief executive

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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WPP named insider Mark Read as its new chief executive on Monday tasked with replacing its founder Martin Sorrell and steering the world’s biggest advertising company through a period of wide scale industry change.

The 51-year-old former board member and digital boss replaces Sorrell who quit in April over a complaint of personal misconduct, which he denied, and following a year-long sharp downturn in trading due to fierce competition.

Read had stepped up in April to run the company as a joint chief operating officer alongside Andrew Scott. WPP said on Monday that Scott would continue in that role while Roberto Quarta has resumed his role as non-executive chairman.

“WPP is a great company with exceptional people and strong relationships with clients who place a high value on our work,” Read said in a statement.

Senior colleagues, former executives and analysts have told Reuters they believe Read’s proven track record of running the WPP digital agency Wunderman combined with his knowledge of the sprawling business make him the right man for the job.

Read was seen as the leading internal candidate to become CEO after he spent almost nine years on the board from 2006 to 2015. He has also worked on strategy, client retention and digital operations since he wrote to Sorrell asking for a job in 1989.

Read takes over the 16 billion pound ($20.7 billion) company at a difficult time however as cautious clients question everything they spend and Facebook, Google and consultants such as Deloitte encroach on its turf.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Sorrell beats WPP in race to win Dutch agency MediaMonks

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Martin Sorrell has beaten WPP in the race to buy the highly coveted Dutch agency MediaMonks, in a move that is set to further strain tensions with the company he founded.

The 73-year-old Sorrell left the world’s biggest advertising group WPP in April over a complaint of personal misconduct. Leaving without a non-compete clause, he set up a new company weeks later and took on WPP in a bid battle for its first acquisition.

WPP warned Sorrell earlier this month that he could lose his multi-million pound share awards payout if he did not back off from the competition for MediaMonks.

“The merger (with MediaMonks) represents the first move by S4 Capital to create a new era, new media solution embracing data, content and technology, which meets client needs in an always-on environment,” Sorrell’s new venture, S4 Capital, said.

MediaMonks, with revenue of around 110 million euros, employs more than 750 people in 10 countries to support clients including Adidas, Amazon, Google, Netflix, Hyundai and GE.

The owners of the group will receive shares in S4 Capital as well as cash. They will not get an earn-out in a bid to encourage them to stay. S4 did not put a price on the deal.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Martin Sorrell hits out at WPP over handling of his sudden departure

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Martin Sorrell, the founder of WPP, used his first major public appearance since quitting as chief executive in April to hit out at the advertising giant over the treatment he received from the board.

The 73-year-old left the world’s biggest advertising company over an allegation of personal misconduct which he has denied. However neither Sorrell nor the company have given any details about the nature of the complaint.

Speaking at a packed event in Cannes organised by The Drum advertising publisher, Sorrell said he had asked the company to conduct an investigation over how news about the allegation had leaked to the Wall Street Journal.

“The most damaging thing that happened during the course of those events… was the leak over the Easter weekend at the very top of the company, and which to my knowledge there has been no investigation whatsoever,” he said.

Sorrell noted that the company has since said that all employees are treated equally.

“I would disagree violently with that premise, not all employees have been treated equally.

“There has been no investigation to my knowledge of how, why and what the leak consisted of and I think that is a fundamental flaw,” he said, adding that he had requested one.

The departure of Sorrell, the world’s most famous advertising executive, has prompted speculation as to why he left, including reports in the Financial Times that he could be aggressive towards staff.

He called the speculation “scurrilous and salacious”.

After Sorrell

“Am I the easiest person in the world to get along with, you know very well that sometimes I can be difficult, but I would always say difficult with justification,” he said, looking relatively relaxed, in a t-shirt and jacket.

“If it is a fault to demand or expect superior performance or for things to go well, mea culpa.”

In his absence, the company has appointed Mark Read and Andrew Scott to run the company. As a 2 percent shareholder, Sorrell said he thought the two should be permanent CEOs.

“I’m not saying two individuals because nobody could replace me individually, but those two individuals have complementary skills,” he said, to laughter. “One on their own would not be sufficient in my view but two together can be a very powerful and potent combination.”

WPP has since had to defend its handling of the departure after it emerged that Sorrell had left with share awards worth potentially 20 million pounds and without a non-compete clause.

He has since set up a new venture, S4 Capital with a pool of 150 million pounds from outside investors to make acquisitions.

His move to acquire a listed shell company repeats his formula from the 1980s when he used a then little-known shell company called Wire and Plastics Products to buy some of the biggest ad agencies in the world, such as JWT, Ogilvy and others.

Sorrell said he expected to work for the next seven years and then assess whether he wants to go on with a new cycle.

The appearance of one of Britain’s most famous businessmen had been hotly awaited, with the small Irish pub on the waterfront packed to the rafters with ad executives and journalists.

Sorrell described his new venture as a peanut. He noted that some people have allergies to peanuts.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow