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WPP’s Sorrell bullish on Google & Amazon; says Facebook is not an advtg medium

Sir Martin Sorrell, WPP

Who is leading the future of technology-led media owners? Google, Facebook, Twitter, Pinterest… The question is not a simple one to answer but the Chief Executive of WPP, Sir Martin Sorrell, has a view. Mr Sorrell singles out two companies that he thinks are well placed to lead the times ahead – Google and Amazon. “This is not to say that the other platforms are not important. They are, but they are different,” said Mr Sorrell, and added, “Google and Amazon are the most effective new media companies.”

He elaborated that Google operated on a five-legged stool – Search, where it is a dominant player and its long term objective of focussing on intelligence search is likely to keep it on top of its game, Display, Video, Social and Mobile Search. Of these, WPP believes that Search and Mobile Search are Google’s two biggest strengths, followed by Video.

“Our biggest traditional media relationship is with NewsCorp, which accounts for nearly USD 2.5 billion of the spends we make on behalf of our clients. We are already spending close to USD 2 billion on Google right now and it is growing at 20-25 per cent every year. The ‘new’ media company will soon surpass NewsCorp as our biggest media relationship,” divulged Mr Sorrell.

He attributes his bullishness on Amazon on the rise of the online retailer. The growth of the web has made way for a major distribution channel that is online and direct to consumer. Changes in the media landscape is driving the concept of proximity retailing, which essentially means web and mobile based ordering and payment replacing the traditional point of sale or in-store. Amazon is one of the few companies that is not only witnessing the benefits of this already but is also future ready in terms of leveraging the changes in the consumer and media landscape.

Commenting on social platform, and more in particular to Facebook, Mr Sorrell said, “Facebook is a branding medium, but not an advertising medium. Facebook is about how people communicate socially with one another and if you interrupt that, you do so at your own peril. In that context, search has proved to be much more effective.” Facebook too has introduced its own version of search though its latest initiative, which it terms as its third pillar after Newsfeed and TimeLine, Graph Search. While the attempt of Graph Search is to put the social filter of a user and make search more relevant or contextual, it does not compete with search players such as Google and Bing.

Mr Sorrell’s views on the role that social platforms play as communication vehicles was once earlier seen in his comment on Twitter being more of a PR medium than an ad platform.

WPP is one of the first holding companies to truly push the digital agenda. While digital is already contributing a significant 34 per cent to WPP’s overall revenues, the company’s ambition is to grow this number to 40-45 per cent. The other cornerstone of the WPP strategy has been the focus on new markets that allowed it to maintain lead against its competitors such as Omnicom and Publicis Groupe. Mr Sorrell reiterated that WPP’s response to the proposed Publicis Omnicom Groupe (POG) that would change WPP’s position as the largest communication services holding company was to focus on its strategy although at an accelerated speed. His rubbished all rumours of Havas and IPG buyouts or mergers that were suggested in various press reports. For WPP, the road ahead was still about building on organic growth and adding small and medium sized companies at a steady pace.