Sir Martin Sorrell: He Followed the Money
As a shareholder in the brand building business, John Lowery is aghast at the damage Sorrell’s pursuit of money has inflicted
As Martin Sorrell walked out of Saatchi & Saatchi in 1985, he stepped over the words ‘Nothing is Impossible’. They’d been chiselled by a monumental mason into the top step of the agency’s doorway. That same mason now needs to be cajoled out of retirement to chisel a new set of words on the metaphorical headstone that will sit above the subsequently-knighted Sorrell’s career: ‘He Followed the Money’.
It is, of course, well known that he followed it personally; shovelling bucket loads of it into his pockets.
It is known that at one point his remuneration exceeded that of his lowest paid employee by a factor of 1,444.
It is known that in 2015 he was handed £70.4m in cash and shares but that he still felt it necessary to claim a £47,000 allowance for accommodation when staying in his own home in New York.
It is known that, despite considerable shareholder unrest at the catastrophic decline in WPP’s share price he continued receiving astronomic bonuses.
It is known, or at least it was reported by the Daily Telegraph in 2006, that WPP had been ‘paying for a luxurious flat in Milan (rent: £50,000 a year), even though it was not available for use by company executives.’ The Telegraph reporter wondered why.
And it’s known that his second wife followed the money whilst following him. Cristiana Falcone-Sorrell racked up £274,000 in ‘spousal travel expenses’ in the year to April 2014; a year in which Sorrell himself drew down £43m from WPP’s coffers. (You’d think he might have paid for a few of those mini-cabs out of his own pocket, wouldn’t you?).
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What we don’t know is what caused WPP to call in the lawyers and in so doing made Sir Martin so “fed up and p*****d off”. Perhaps Vince Cable can help us establish that.
But none of that concerns me, as I’m not a shareholder in WPP. What concerns me, as a ‘shareholder’ in the brand building business, is the damage his following of the money has wreaked on brands.
You can find the first evidence in support of my argument by returning to the WPP annual report and accounts of 1986.
The report commences with a couple of quotes. One from Tony O’Reilly, then CEO of Heinz and another from J. Tylee Wilson, then Chairman of RJR Nabisco. Both are bemoaning the amount of money spent on Above-The-Line advertising.
The quotes bracket a chart that shows the decline in ATL spend and rise in Below-The-Line as a proportion of total marketing expenditure.
The WPP ‘Professional strategy’ that follows states that the company will build a ‘dominant position in the United Kingdom in BTL activities’, then develop ‘a similar position in the same areas in the United States. which account for approximately half of worldwide expenditure in all such categories.’
As we all know (thank you Professor Ehrenberg, Professor Sharp, Peter Field, Les Binet the IPA Advertising Effectiveness Awards, et al) consumer promotions achieve nothing more than short-term spikes in sales but Sorrell looked at the purple line of money and followed it. And he’s been following it ever since.
He followed it when he realised that advertising agencies were still making money by buying JWT, O&M, Y&R and Grey.
He followed it when he bought media agencies.
He followed it when he started buying research agencies.
He followed it when he began buying digital agencies.
He followed it by buying data-driven marketing services companies.
He followed it when he started spouting the word ‘horizontality’. (In case you’re wondering what in the name of all that is holy that word means, let me enlighten you: It means cross-selling services to the client. It means offering a solution called, for example, ‘Team Red’ to Vodafone and in so doing turning the fiercely competitive brands that are Y&R and Grey into commodities; to the detriment of the creative work.)
He followed it by telling his clients that Google and Facebook were the answers to all their problems. (How ironic. They’re not. They are, for the most part, latter-day manifestations of the coupons and promotions that comprised the purple line that got him going in the first place.)
At the 2016 Guardian’s Changing Media Summit, he stated that, “we’re not in the advertising business anymore… 75% of what we do now, Don Draper and maybe even Sir John Hegarty wouldn’t recognise.” With that I concur but it doesn’t mean WPP was doing the right thing. Sorrell and WPP were following the money.
As the most influential man in advertising, here’s what I would have liked Sir Martin to say instead:
We, at WPP, recognise that we have to deliver shareholder value. But equally, we believe that ambition must be balanced against the purpose of our company – the building of brands for our clients. We recognise that things are changing in the brand building business but Google, Facebook and data-mining are not panaceas.
Sure, they can be used tactically but the real answer lies in advertising that touches people’s hearts and engages their minds. It lies in unleashing the creative talent that still exists in agencies like JWT and O&M. We aspire to the greatness of Sir John Hegarty. Because that’s where the secret to brand building lies and that’s where the long-term value for our clients will be generated.
It was said that it was impossible to imagine WPP without Martin Sorrell at the helm. Well it seems, that if you follow the money, nothing is impossible.
John Lowery is a marketing consultant who has worked both agency and client side