COLOGNE — The world’s biggest ad agency holding group may soon spend more money with Mark Zuckerberg than with Rupert Murdoch, as it aims to shrink its reliance on Google in the media mix.
But its CEO is still searching for other horses to back, in a digital ad world that is increasingly led by just two runners.
Sir Martin Sorrell reveals to Beet.TV that WPP will shift the ratio of its ad spending allocated between Google and Facebook from 4:1 in Google’s favor last year to 3.5:1 this year.
“With Google, we will probably spend about $5.5bn, $5.6bn this year against $4bn last year, and Facebook $1.7bn versus about a billion last year,” he says.
“Google is our biggest media investment. There are a number of traditional media owners that we’re spending $1.7bn on, or as much as $2.25bn on.
“But I would expect in 2017, either Facebook becomes number two to Google or maybe that will take (until) 2018.” During Cannes Lions in June, Sorrell said WPP was spending around $2.25bn with the combined global activities of Fox, News Corp, Star and Sky.
Still, the shift at the top is not the end of the story. A Morgan Stanley report recently concluded 85% of all digital ad spend goes to just Google and Facebook. And Sorrell is searching for more diversity.
“We need more balance in the marketplace,” he tells Beet.TV. “Our clients want more choice, they don’t want restricted choice.”
That leaves WPP looking for other big publishers to spend with. Scale matters because, in Sorrell’s words: “We don’t traditionally work with the long tail. We are focused on big spenders as opposed to SMEs.”
Still, the WPP founder has some idea who may front up to Google and Facebook.
- “The other third force is around Snapchat,” he says. “When you speak to people at Google, they clearly believes that Snapchat is the potential third force.”
- “AOL, Yahoo and Verizon (combined), we would very much like to see gather traction and become a third force. They are a potential threat to the duopoly … but (AOL CEO) Tim (Armstrong) has a lot of work to do. There may be some other pieces they have to put in to the jigsaw to make it stronger.”
WPP isn’t just sitting back and hoping these players gain scale. WPP also has stakes in a series of content companies. “The shareholding we’ve taken with Vice … is a good example of us trying to broaden the marketplace,” he adds.
This interview was taped at DMEXCO ’16. It is part of a video series of industry leaders. The series is sponsored by Videology. For more Beet.TV coverage of DMEXCO, please visit this page.
