Sir Martin Sorrell and that pay packet

Will the WPP boss’s success percolate through the organisation to the thousands who prop it all up, wonders Bob Wootton. Plus: Exterion’s tube win, ad effectiveness and clumsiness at Channel 4

No-one can have missed WPP boss Sir Martin Sorrell’s pay packet, +/- £60m this year. So what are the arguments for this truly fabulous haul?

Martin is very arguably the most successful and effective advertising executive the world has ever seen. He may not be ‘creative’ in the sense of making tear-jerking Hovis ads of yore, but boy is he creative in business. He’s built the biggest advertising empire ever from a manufacturer of wire baskets.

WPP claims his reward amounts to less than 1% of the incremental value he’s driven for shareholders – who love to grumble but love to hold on to him and their shares rather more.

Before clients start to complain, best remember Sir Martin’s pay was topped several years ago by Bart Becht of Reckitt Benckiser, who pocketed over £90m in one year.

Of course this award does recall bygone days when the TV sales thugs used to bamboozle their luvvie broadcaster boards into bonus targets that were always miraculously met and usually wildly exceeded.

And perish the thought that WPP might look to recruit some rather more effective non-executive directors and REMCO chair. Now that’s a call I might be prepared to take post-April 22.

But as a declared capitalist and meritocrat and brutal as it might sound, I think he (and his senior team who’ve also done exceedingly well) has earned it. I do, however, see some underlying issues.

First, I’d hope this success percolates right through the organisation to the thousands who probably work nights and weekends to prop it all up.

Second, despite advancing years there’s still no succession plan. Common when there’s an extraordinary and charismatic CEO but a big missing nevertheless. Step forward ‘Sir’ Johnny Hornby, who seems to be positioning himself. But with such massive boots to fill, will he make the cut?

And third – though not uniquely – WPP is as exposed to digital as any. It’s where most of the real money is being ‘made’ out of clients right now, but as we’re finding out every day it’s a very unstable world.

My inspiration The Ad Contrarian has some things to say on this particular, bringing the sustainability of the ad network model into question. But for now, hats off To Sir M.

Exterion keeps the £1 billion tube contract

I bet there were sleepless nights over this one. An incredibly close call, with both the incumbent and JC Decaux throwing the kitchen sink (or l’evier de cuisine in the latter case) at it.

Word was that logistics was the overriding factor so the ‘devil they knew’ took the prize, but let’s hope the financial deal is more sensible than last time. TfL drove such a bargain – and as ever those pitching were so focused on winning they didn’t withdraw even when things got silly – that it was a catastrophically unprofitable ‘win’ which had to be resolved in court.

On the upside, that contract saw the introduction of large numbers of high-quality digital panels (even if it did also see the tragic fail that was the milky crosstrack projection of video ads). This time yet further improvements to the tube experience are promised.

But Exterion is saved from extinction and its owners are now squaring up to acquire the competition, Clear Channel International. Life goes on in the shark tank.

Is advertising becoming less effective?

Recurrent murmurs emerging from clients and also those high churches of ad effectiveness Hall & Partners and Millward Brown about declining levels of communications effectiveness in (mainly but not exclusively telly) ads.

More analysis is needed before we all go and slash our wrists, but I can’t help conflate two things by way of early explanation for this apparent phenomenon.

First was the recent economic downturn, wherein many creative agencies succumbed to allow ‘the dead hand of the client’ to show through in too many ads. Ads are supposed to sell but the best do it by engaging, not hectoring.

Second, what’s been dubbed my favourite subject – the online ad behaviours that have already driven almost a quarter of our fellow human beings (aka consumers) to block our ads online. To remind you, these behaviours include rubbish creative, stalking recent buyers with more of the same (aka retargeting) and frequencies a woodpecker would envy.

I’d like to see an investigation leading to proper and overdue industry consideration of the authenticity and meaningfulness of marketing comms.

Whither Channel 4

Is the momentum behind a Government sale of Channel 4 waning? I hope so.

We shouldn’t be too religious about ownership – it’s an accident of history that Government owns it in the first place.

But we should rally to protect the asset for two reasons: for its significant contribution to the UK’s creative industries as a major commissioner of independent content; and for its unique contribution to TV advertising schedules, especially – but not exclusively – those aiming younger and more upmarket.

Funds being extracted for shareholders, let alone a dumbing down of content, would neither benefit advertisers nor producers. So hopefully sense has already been seen.

That said, I was disappointed by the clumsy attempt at a hatchet job on Cadbury’s post-Kraft/Mondelez takeover in C4’s weekly Dispatches strand.

Yes corporates – and most everybody else – distort facts to suit their own case. Yes, they now source and manufacture globally.

Some of us might have lamented changes to formulation, range and portion size, but the programme had little to go on.

Respect to former marketing director, now agency principal Phil Rumbol, for speaking plainly on air but respondents in the vox pops were happy, some even saying they liked some products better.

Taken as a piece a flimsy case didn’t support an obvious anti-corporate agenda. If I were Mondelez, I might be considering scaling back my spend with C4, but then my media agency would probably resist as it would impact their trading arrangements.

Even if I persisted, C4 might never even notice as the agency would likely swing other clients’ money in to make its trading book balance.