Sorrell backs new media, user-generated content

16 February 2010

LONDON: New media and user-generated content are providing fresh opportunities for brands in the financial crisis, Sir Martin Sorrell, ceo of WPP Group, the holding company, has said.

In an interview with PBS, Sorrell argued that print, radio and free-to-air television have suffered particularly heavily during the downturn.

While certain platforms – like satellite, cable and the web – have proved somewhat more resilient, the long-term prospects for media owners remain uncertain.

"I don't think it will ever be the same. To use Jeff Immelt's phrase, the industry has been ‘reset‘. Anybody who believes that we [will] go back to where we were, say, 10 or 15 years ago, I think is deluded,” said Sorrell.

With regard to current trading conditions, WPP's chief executive stated "things are less worse. They've stabilised. I think as we go into 2010, 'stabilise' means we're seeing, top-line, like-for-like sales growth flat to last year."

He added that clients in the US will also "have to feel more confident" before the broader situation improves, a development that is not wholly evident in the market as yet.

"I think what we've seen, if you look at corporate results ... when they've been good, they've got there what I call 'ugly', by cutting costs rather than by growing revenues," Sorrell said.

In this environment, many brands are "looking for alternatives" when it comes to marketing, often taking advantage of the cheaper prices offered by the web as budgets are stretched. 

"New media offers … a relatively low-cost alternative," Sorrell stated. "The amounts of money involved are not as big as in traditional media. So they're willing to experiment, but to a limited degree."

Social networking services such as Facebook, and mobile marketing, are among the channels benefiting from this trend, although some larger companies have proved slow to adapt thus far.

Another major "opportunity" lies in ads developed by consumers, an approach successfully employed by Doritos for its Super Bowl spots over the last two years. 

"User-generated content is a fact of this new medium, and we all have to get used to it. What you have to do is use it to advantage," Sorrell said.

"You have to take … these ideas and try and develop them in the context of client strategies and execution, development in an effective and sophisticated way. I don't think it's a threat. I think it's an opportunity."

Looking forward, the adland pioneer predicted the main challenges facing marketers will be different in more developed regions, like the US and Western Europe, and emerging economies. 

"I think one of the things we have to get our minds around, particularly in the West … is the fact that ‘more' may not be what you're seeking to encourage people to do. You're maybe encouraging them to consume in a much more responsible way," Sorrell suggested.

"We have to do that in the West because one of our problems has been we got ourselves into trouble by borrowing too much and spending too much. We overspent. We have to learn to save and the Chinese and the Brazilians have to learn to spend."

Data sourced from PBS; additional content by Warc staff