All things digital do not automatically turn to gold
Raymond Snoddy: Whatever numbers are being released, there is always room for sages like Sir Martin Sorrell and John Hegarty to add that little bit of something extra – experience, judgement, balance...
WPP chief executive Sir Martin Sorrell has an enviable reputation as a bellwether. The man who can call the moment when economies begin to turn for better or worse, decide whether the Chinese will inherit the earth, or pronounce which medium of communication is fading towards oblivion.
Is marketing dead? Has the 30-second ad had its day? Are newspapers finished? That sort of thing.
Sir Martin is also never short of a muscular metaphor to describe what is going on in the commercial world. Images of bath-tubs with corrugated bottoms of blessed memory to convey a bit of turbulence while the economy bumps along the bottom.
Obviously journalists like his way with words, and his endless ability to generate headlines and spice up what can otherwise be bread and butter financial results stories.
But his great strength has always been based on the fact that he sits atop mountains of data – and samples it every 24 hours – about how real marketing budgets are performing in the real economy.
Recently WPP has been at it again with the confident announcement that those who claimed that marketing was history and brands were dead were being proved just plain wrong.
Sir Martin himself has even been making it clear that traditional advertising outlets – print and free-to-air television – are still seen by the top companies as the best place to reach customers.
The WPP chief executive has been noticeably more pessimistic about the traditional media in the recent past – particularly about the cost structures of television and film production, and the financial model for newspapers.
For good measure the WPP executive is also now relatively optimistic about the performance of fast-moving consumer goods companies.
A little bit of Sorrology is needed here to gauge the wind direction of where his best judgement lies at any particular moment.
He is, of course, no Pollyanna and equally happily points out that no less than 29% of the advertising market in the advanced economies has transferred to digital operations such as Google, and that the digital uptake rises at the rate of 1% a year.
With trademark precision, Sir Martin told journalist Alex Brummer that he estimates the digital slice of the market would eventually rise to 47%. If Sir Martin is right then the future is scary but not catastrophic given that those sections of the “traditional” media world, which are wide awake, will also share in that 47% with their own digital offerings.
He also recently showed an appreciation that all things digital do not automatically turn to gold. WPP’s media buying arm GroupM has blacklisted more than 2,000 digital websites in the US because they carry illegal or pirated material. WPP wants to ensure that clients’ campaigns only appear in legitimate sites.
There has been an important sighting this week of another important swallow in the TV IS DEAD debate, this time John Hegarty.
In a Guardian interview, the great ad man mused that about five or six years ago there was a general loss of faith in television and that TV had even lost faith in TV. Hegarty was never one of those who lost faith in television as an advertising medium and he is rather scornful of those who did. Now suddenly everyone is talking about Mad Men and TV is the place to be.
“Five, six years ago we were that voice in the wilderness. Now The X Factor has an audience of 19 million that’s as big as Morecambe and Wise. Then Downton Abbey – suddenly everyone is going ‘Shit! People are watching TV!'”.
Of course they always did apart from when the television industry couldn’t be bothered investing in innovative programmes. But it’s still nice to hear Hegarty making the case.
It can’t be repeated often enough that in 2010 the average viewer in the UK watched 28 hours of television a week, no less than 2 hours, 4 minutes a week more than in 2009.
Those official numbers from BARB should be carved in granite and deposited outside the door of every new media sales loft.
Neither Hegarty, nor Sorrell, nor anyone else is ignoring the power of social media and indeed BBH calls its take on the contemporary marketing world – Super Bowl to super-social.
Social networking is fun but it helps to have something to talk about instead of informing the waiting world that it is a nice sunny morning.
It would be completely bizarre to try to ignore the growing power of digital, as the latest provisional 2010 numbers for Europe coming out of the IAB today make clear.
All the signs are that internet advertising surged forward again in Europe amid signs of economic recovery.
Internet advertising grew by 15% YoY to €17.7 billion across all of Europe. In terms of growth rates, display, helped by social media, is outperforming search with display up 21% compared to 16% for search, which still makes up 45% of the overall digital market.
As a result of the numbers, Enders Analysis says it is updating its forecasts for the big five European markets – UK, Germany, France, Italy and Spain. The consultants are now looking for average growth of 10% this year and 13% in 2012.
Whatever the numbers, there is still room for sages like Sir Martin Sorrell and John Hegarty to add that little bit of something extra – experience, judgement, balance.