Sir Martin Sorrell on Changing WPP's Operating Model

November 17, 2017

From the WPP Stream in Ojai, California, Cheddar's CEO Jon Steinberg speaks with WPP CEO Sir Martin Sorrell about the future of advertising.

The ad exec says clients want platforms like Snap and Pinterest to succeed. With the duopoly of Google and Facebook dominating the industry, with 75 percent of digital advertising and 30 percent of the entire ad market, his clients want control to be more distributed.

While Sorrell has seen Google as a "frenemy" in the past, he says he now sees the technology giant as a "flexible friend," because it's become more responsive to concerns. One of the reasons for Google's shift, Sorrell says, is the rise of companies like Amazon which provide an existential threat to the search and advertising model.

There's also been a lot of talk about how the rise of artificial intelligence may impact the American workforce. Sorrell says technology could be a net destroyer of jobs, and he expects that to become an increasingly critical political issue.

Last month, WPP cut its growth forecast for the third time this year. In the latest quarterly, revenue grew 0.8 percent to $4.78 billion. Sorrell says, "It's been very tough," and he's looking to see how things pan out next year.

On the future of advertising, the CEO says investment in innovation and branding is critically important.

FULL TRANSCRIPT

MALE_1: This digitally. We've had to get our digital assets like a wonderment or via mail or AKQA or a Mirum or a OggleV1 and grow them faster. And then, we've had this experimentation phases, you know, with our investment in vice or Refinery29 [OVERLAPPING] or Imagine or whatever happens to be. Uh, we try to, to try and, we called it, called it cannibalisation, because if you don't eat your children, somebody else will, so you have to change your model. Uh, but the real change that we have to make is act as a company, a united company, as one company. The days when we, it was a market share battle and we had.

MALE_2: Yes.

MALE_1: Compete and cooperate.

MALE_2: Yes.

MALE_1: Have gone. Clients want us to provide the best people to solve their problems. That's one thing.

MALE_2: Is that a see change from where you were a year ago [OVERLAPPING] or two years ago?

MALE_1: I would say, compared to two or three years ago. [OVERLAPPING]

MALE_2: Okay.

MALE_1: And, and our people have to get used to the fact that they are part of a bigger [OVERLAPPING] operation.

MALE_2: Will people, so that's, I want to dig in on that point. Will, will a person working at WPP and Today, It's a bit like when people used to say in the United States, th- they'd say soldier where are you from? I'm from Virginia. No, I'm from the United States. Are we soon gonna have clients say WPP is who.

MALE_1: Yes.

MALE_2: Services maybe.

MALE_1: Yes.

MALE_2: And that's different, right?

MALE_1: Ah, very different. It's an integrated operation with 200,000 people in 112 countries.