Blog Post

UBS Media Week: WPP’s Sorrell: Google’s Fitter Than Ever For Mobile Push

As storms lashed New York on Wednesday morning, WPP CEO Sir Martin Sorrell delivered an equally gloomy 2010 forecast at UBS’ Media Week conference.

“November was more less worse,” he said. “It was a significant improvement over the first 10 months of the year. Whether that’s one swallow making a summer, it’s dangerous to extrapolate one month’s data.

The biggest thing in Sorrell’s crystal ball: “When you boil it down, life is about China and the internet.” Specifically, mobile, Google (NSDQ: GOOG) and the marriage of both is tantalizing him…

“Digital is relatively less developed but has higher potential in (developing) markets,” he said. “When you have 700 million people in China on mobile, growing at eight million a month … India growing at 12 million a month – these are markets where mobile will leapfrog PC, unlike we’ve seen in the west.

“Mobile advertising obviously has a lot of potential and power. There’s a lot of debate about whether it will take off – we think it will, driven by iPhone and Android development. Google is the push for this

“Our view is, Google is a much much more fitter … six months ago, it reduced its cost base by about a billion dollars … it’s much more confident. In the data we get from 24/7, Google is having a very strong time at the moment and is extremely strong. The potential they see in mobile and mobile search – they’re much more focused and, therefore, more effective.”

And Sorrell revealed himself to be sympathetic to paid content champions like Rupert Murdoch, arguing something must be done if profitability is to be restored: “We have been saying in our annual report that paying for content is critical. If you have content that consumers want, they’ll pay for it.

“The pricing models of online – and, therefore, traditional media – have been changed beyond recognition. The good news about online is it’s one-to-one, the bad news is it’s one-to-one, because it fragments the audience so much.”

“These things are like fashion brands,” Sorrell said of the many new technologies that have been touted as marketing channels, observing that Second Life has crashed from media darling to a relative obscurity. “You’re gonna get volatility. Facebook? Today. Tomorrow? Who knows? Twitter, today; who knows.” He chided digital execs for dodging questions about how much money they make.

“Three things will happen,” Sorrell prophesied. “One, pay-for content; two, more consolidation; three, governments are going to say we have to have publicly-financed (news) … you’re getting more charitable trusts being set up.”

Right now, 25 percent of WPP revenue is coming from digital and direct marketing – about the same as from the faster-growing global markets (27 percent). Asia, BRIIC countries, digital and consumer insight will grow faster, western Europe and traditional media slower,” Sorrell reckons: “The delta in our industry since 2008, the growth has all come from China all the internet – that’s the focus.”

And he’s being super-cautious about observing any economic upswing after Wall Street’s “near-death experience”: “The world did almost come to an end … We will declare victory when wee see year-for-year, like-for-like improvement … unless the world comes to an end, it’s got to get better.”

One Response to “UBS Media Week: WPP’s Sorrell: Google’s Fitter Than Ever For Mobile Push”