Sorrell tips social media, branded content

07 January 2010

LONDON: Social media and branded content are two areas that will attract heightened levels of interest among advertisers, according to Sir Martin Sorrell, chief executive of WPP Group.

Speaking in an interview with Sparksheet, Sorrell suggested that popular preferences are continuing to change, requiring marketers to react accordingly.

In the US, for example, the web now accounts for a 28% share of the time consumers spend utilising any form of media, according to figures from Morgan Stanley, the banking group.

“That's good news, but it's also bad news because it's highly fragmented, and therefore you don't have large globs of ad revenue sticking to properties anymore,” Sorrell said.

More specifically, he argued portals like Craigslist have effectively “destroyed classified advertising” for newspapers and magazines, while Google's position remains “intimidating”.

With regard to social media, the popularity of Facebook, which has a global membership of over 300 million people, is demonstrated by the fact that it is equivalent to the “third- or fourth-largest country on the planet.”

Similarly, many companies are seeking to make an impact on Twitter, with JetBlue, which has 1.5 million “followers” on this site, one firm generating revenues by offering deals to its users in this way.

“The outcome isn't a surprise, but it tells you something about the power of the social media,” said Sorrell.

While this approach can “be very effective and cheap for everyone”, its ultimate efficacy may be dependent on the incentives offered by individual organisations.

“The answer to the JetBlue tweet example is that the price point – or the offer – is probably a big determinant to the success of the campaign,” Sorrell said.

“The JetBlue example shows you how violently media consumption – particularly amongst younger people – is changing, how it is likely to keep changing, and how specific it can all be.”

Furthermore, despite the fashionable status of these Web 2.0 services, the chief executive of WPP warned that social media and related areas were still in their infancy, and could thus be subject to change.

“These things are going to be fluctuating. I'm not saying they're going to be here today, gone tomorrow, but they'll fluctuate – it's early days,” he said.

Branded content is another “way forward” for the industry, but its implementation must be based on the understanding that “consumers are not stupid.”

As such, in order to make the most of the opportunities offered by this method of communication, placements need to be carefully integrated with content.

“I've seen some very crude product placement … like in a soap opera where a woman opens a fridge and there's only a can of Coke in there,” said Sorrell. “It can be much more subtle than that and it will be more subtle than that.”

“People have to understand that it's happening and brands have to recognise that the consumer can't be hoodwinked.”

Data sourced from Sparksheet; additional content by Warc staff