Martin Sorrell, WPP chief executive officer, appeared on
CNBC's Squawk Box to talk about the future of advertising and how
it's doing in relation to the global economy. Currently, WPP has
advertising deals with companies in 110 countries.
Like all businesses, advertising has seen their share of ups
and downs to to the rocky economical climate around the
"It's sort of steady. It's a bit of a slog in the west, and
the faster growth markets to the south, the Latin America, in the
southeast in Africa, and the Middle East. The Middle East is
patchy, but overall okay, and of course in the east, places like
China, India, still much stronger. So geographically, you have a
very different picture," said Sorrell.
He said that it's been a three-speed world for the past four
to five years. Sorrell called the advertising industry
"hand-to-hand combat," in that it is extremely competitive and
According to Sorrell, digital media is where you'll see growth
in advertising. He said that companies are looking to optimize
advertising expenses, while becoming more efficient. Digital
media is the most effective way to do that.
Companies need a whole portfolio of digital media to get their
money's worth in digital advertising, and Sorrell said that
companies like Google (NASDAQ:
) lead the way.
"Google, because it's rooted in the five areas. It's not just
search, it's display, it's not just display, it's video, it's not
just video, it's social, it's not just social, it's mobile. So it
has it's five-legged stool as we call it," said Sorrell.
"So it's well-rooted. Now, other companies like Facebook
), like Twitter, like Apple (NASDAQ:
), like Amazon (NASDAQ:
), are trying to emulate it."
Sorrell said that search will be a very important part of
everything that's to come in digital media.
During this week, one of Sorrell's biggest clients, who
currently spends 25 percent of their advertising budget on
digital media, now wants to make it 50%, reallocating much of the
budget from legacy media owners.
"There is a switch taking place, and the legacy media owners
have to grapple, just like we as agencies. You know, ten years
ago zero percent of our revenues came from digital. Today it's 34
percent, so a third of our business is coming from areas that
didn't exist," said Sorrell.
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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