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Sorrell Takes Out His Guns

Important debate that deserves to be surfaced…especially for marketers. Can the ad business take on the technology business?

Photo: Jonathan Fickies / Bloomberg via Getty Images

Martin Sorrell, the chief executive of WPP and, arguably, the dominant voice in the advertising business, recently gave an interview in which he challenged the basic efficacy of social media as an advertising tool.

Mind you, this is against a backdrop of the entire advertising industry in a manic dither to stress its social media bona fides. What you want to be right now is a social media agency—because every other agency network or holding company has to buy you. Buddy Media, a social media advertising agency slash technology company, even took a round of VC investment. Advertising, heretofore, is not a business the VC community has ever looked at with anything more than contempt.

But Sorrell told the Royal Television Society that he had “some fundamental doubts about the ability to monetize social platforms.”

“We used to write letters to each other,” he continued, “and now we correspond through Facebook and Twitter and other forms of communication. If you interrupt that with a message, you may run into trouble.” Of course, he added with artful humility, he had once said that Facebook was overvalued at $15 billion whereas it is looking at a public offering near $100 billion.

Now, in some sense, Sorrell is merely making a contrarian argument—and hardly a far-fetched one. The Web itself, once expected to be the ne plus ultra of advertising, has returned much more equivocal results. Its cost keeps going down instead of up. And social media is more complex and less linear and more anarchic than the Web. There is no straight path for a message to get through.

But Sorrell is wily and, we can assume, his point was something more than just polemic.

Facebook, like Google before it, is about to usher in another great depression in the value of the ad market. Its billions of user views which it can sell for fractional pennies will create, for Facebook, a cash gusher. But for everyone else, it will cheapen the value of digital media. By once again letting the technology guys control the advertising play, the chance is great that they will take volume instead of spending the time and effort to develop a more particular and exclusive branding play.

Sir Martin, in other words, is trying to put a stake in the ground.

The digital world is surely the future of advertising, but, as surely, the digital guys are fucking it up. Worse, the big digital kahunas have come up with a way to make money for themselves, at the expense of everybody else. Worse yet, the forms of advertising they’ve created don’t even work very well—so the entire craft becomes devalued.

It’s war—of a sort.

Curiously, WPP is Google’s biggest client (and it will, no doubt, if it is not already, become Facebook’s biggest client), but, because of AdSense’s fundamental democratization of the medium, this means that WPP is still a small overall contributor. Large ad agencies hold large sway over television; they don’t over big digital platforms.

Uncle Martin is jawboning.

He is at last trying to take back the discussion. The technology guys, not least of all because they understand technology, have controlled the conversation, even when it’s about advertising, a subject they don’t much understand at all (or particularly care about). The advertising guys, trying to placate cowed clients worried about their uncool digital strategies, and unable to truly talk the technology talk, have gone along.

A business that supports itself with advertising, that, effectively, has only one revenue stream—advertising—is almost entirely run by people who, effectively, want to cut out the advertising pros.

It’s a war whose time has come.

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