The head of WPP, the world’s largest advertising holding company, said major players in online data management like Nielsen, Facebook, and Google are now the company’s main competitors, standing alongside its traditional advertising rivals.
In comments made Wednesday at the American Association of Advertising Agencies’ Data Summit, Sir Martin Sorrell said 75% of WPP companies’ $US18 billion in revenues now comes from digital advertising, data investment management, and media planning.
“We’re not a traditional creative business anymore,” Sorrell said. “I don’t know what the numbers are for our [traditional advertising] competitors, but what I do know is even they have shifted ground.”
This of course was not the last thing Sorrell had to say about his competitors, unwilling (or perhaps unable) as he is to refrain from poking fun at the proposed merger of his chief rivals, Publicis Groupe and Omnicom Group.
Sorrell said the combined Publicis Omnicom Group, which would replace WPP as the world’s largest advertising services holding company, is silly to think it could compete with Facebook and Google’s data troves after arriving so late to the party.
In his mind, the Publicis-Omnicom merger is a failed attempt to catch up to WPP well after it established itself in the targeting and measurement field by purchasing the digital marketing company 24/7 Media in 2007.
“It’s amusing to me that the POG Group is now saying that they can be bigger to compete with them,” Sorrell said. “Five minutes ago, they were saying they want to partner with them. They don’t know which way their heads are going to go.”
“It’s unrealistic to think you’re going to go against a $US300 billion company like Google, or Facebook at $US100 billion. And by the way, watch out for China.”
Sorrell said that in order for the advertising holding companies to keep up with their competitors in the online space, they need to continue making investments in technology, as WPP did when it launched the data management platform Xaxis in 2011.
Still, he said, the vast majority of WPP’s investments have been in human capital, a worrisome situation in an industry increasingly reliant on technology.
“The lines of difference between us and all those sets of competitors that I mentioned, particularly the ones that are closer, are going to get less and less,” Sorrell said. “And that worries me because we’re not great data engineers, historically, as an industry. We need to invest more in technology.”
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