Invite colleagues
In the second part of my post that looks on the Sir Martin Sorrell interview done by the Wall Street Journal, The CEO of WPP (the worlds largest communications company by revenue) said that 20% of marketing budgets will be spent in digital advertising within the next five years
This interview with Sir Martin was interesting for a number of reasons, in the first part of my blog on this interview (read first part here) I highlighted the candor in which he spoke of the downturn. His this second post on the same interview, I wanted to show his thinking for some other areas on digital marketing. Interesting, Sorrell said digital budgets would increase significantly in the next few years - but would not fully make up for the difference between share of time spent online and share of marketing spend.
Time spend online to be 30% within five years Companies are spending up to 13% on digital. We know we spend up to 20% of our time online, so in theory spending should be up at 20%,” he said. “It’s just natural conservatism, resistance to change and inability to adapt to change. I believe when digital budgets get to 20%, which will be in four or five years, we’ll be spending 30% of our time online. (I hope you are right Sir Martin)
His key points from the interview are below:
Hopes for 2009 ad upturn tempered
The WPP chief admits that the WPP group had been too optimistic about the recession and didn’t move fast enough to prepare for the economic downturn. “We could have moved more quickly,” he said. “We budgeted this year’s revenues to be down 2% for the year. For the first half year, we budgeted -4% and it came out at -8%. So clearly we were too optimistic about 2009.
2010 - Light at the end of the tunnel?
According to Sorrell’s numbers, the global ad market this year is down just over six percent, and even more in the US. And based on Sorrell’s month-to-month analysis there’s no sign of a bottom just yet, although he states it looks like the market could turn around in the beginning of 2010.
Where will the digital ad money go?
In terms of predicting where the increased ad-spend will go, Facebook and Twitter seem to be the two rising forces in a world that is currently dominated by Google, Yahoo and Microsoft Advertising. However, Sorrell equated Facebook and Twitter to writing letters to one’s friends; “Would you want to see ads on your correspondence?” Sorrell is far more bullish on the prospects for ads in online videos or integration in entertainment content. “People are used to ads on entertainment content, and they can be far less intrusive.”.
So that ends this two part post on this interview. I look forward to profiling another interview for the leaders of different 4A Agencies in the coming weeks..
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