Last Wednesday (2/25/09), I spent part of the day at Stanford University to check out the 15th Annual session – The Delta Conference: The Impact of 2008’s Dramatic Events on the World of Digital Media and Technology.
Much of the event was unmemorable until Sir Martin came up to the front of the room. Sir Martin should have been the keynote. He spoke in plain English about how the economy was doing and about businesses making a profit, i.e. organic revenue growth versus finance schemes. Not that he is any slouch in using the capital markets to buy growth or access to new technologies…just an interesting choice of how to view it all. Still, Sir Martin Sorrell packed a refreshing wallop talking about the state of the global economy, the advertising industry and even WPP (disclosure: I am currently affiliated with a WPP-owned agency Grey Advertising).
- Global Economy. While upbeat, he likened the recession to the Enlgand in the 1970s when there was just a 3-day work week.
- State of the Ad Biz. Sir Martin expressed amazement that for clients in grave financial situations, long-standing relationships often don’t matter saying, “We’re Not Dogs to be Kicked.” Though he did mention surprise that better-capitalized media companies were feeling that familiar pinch that agencies know with the recent call for 120-day payment terms. He continued saying that business has changed and it’s “not about the creative but the application of technology.”
- Analytics. He specifically talked about the rationale for the recent Omniture strategic alliance (including $25MM investment) and TNS (parent of Millward Brown, Dynamic Logic and others) as evidence of the kind of analytical capabilities and consumer insight that would be a bigger part of WPP in the future.
- Technology. In reference to the acquisition of 247Real Media, Sir Martin curiously pointed out that they couldn’t afford Doubleclick so they bought “the poor man’s choice.”
- VCs & PE Firms.A financial industry “winnowing out” is underway because in the past these firms have far fewer exit opportunities for their investments. In the past, they haven’t admitted their mistakes and just sold them off to the next buyer (greater fool theory). Sir Martin said “the music has stopped,” and the business climate has changed. Specifcally, he mentioned that ad revenue that was more concentrated will now be more fragmented and there will be a Darwinian culling out.
- Google as “Frenemy”. A question from the Silicon Valley audience mentioned his oft-quoted comment from 2007. He noted that while Google was previously gesturing towards providing their own agency services, with revenue now down and capital tight the reach up the food chain has diminished (from small advertisers doing search to large advertisers doing branding). This seems to have led to changing attitudes. He left it as the relationship is now of, “a friendlier frenemy”.
- Gratuitous and obsequious name-dropping.
- Annoying Stanford MBA students. NOTE: table-hopping interrogation is not a recommended networking technique.
- Most of the other sessions.