The six global ad holding companies (WPP, Publicis, Interpublic, Omnicom, Dentsu, and Havas) are basically legal roosting boxes for advertising agencies, but a few years hence we may see them very differently. Or, a few of them anyway.
Speaking with AdExchanger today, CEO Martin Sorrell said, "I think our business has changed dramatically in the last 5 years, and a lot of people aren't prepared to accept that."
Sir Martin is prepared, as he showed yet again this week with a $70 million investment in Latin American software developer Globant. The Buenos Aires-based company employs 2,500, mostly engineers, who work on Intranets, data architecture projects, and mobile integrations.
We spoke with Sir Martin about the Globant stake and WPP's direction…
How far afield of traditional marketing services is WPP willing to go? Do you aim to become more competitive with technology consultants like Accenture and Deloitte?
SIR MARTIN SORRELL: Less so the Accentures or the Deloittes and more the Sapients and Cognizants. Our traditional target is the marketing function or the CMO – now it's moving more toward the CIO and the information and technology function. What's happened is CMOs have started to build websites … I liken it to the back of the television set. You get a little spaghetti at the back of the TV set and it's very confusing. We're trying to do a common platform on the back end. CMOs can play on the front end.
That's where a Sapient or a Cognizant have played historically, they've attacked the business on the back end. We've had a number of good technology partnerships for years. We've made inroads on the backend.
Can you talk about those partnerships?
Some of it we'd rather not go full frontal on. We've had three major examples with big clients in the last three to six months where we've gone in with technology partners. Our industry's issue is that we're seen as being artistic and creative and not technological. Globant has 2,500 engineers dotted around Latin America and the U.K.
It really goes back to when we bought 24/7, and that has morphed into Xaxis and our [media trading] platform. We take a very different view from our competition. Our position is that we should apply the technology in such a way as to give us proprietary insights… and then leverage that insight in a more meaningful way.
In a Latin American context, we're trying to work more closely with clients…. on audience measurement of all sorts. Essentially we've always been regarded as being one wing low on the technology side. If you look at Sapient, they made an acquisition of Nitro [to add "above the line" creative capabilities].
It appears there's not much of the old Nitro left within SapientNitro.
That's right. The technology side of the business overwhelmed the creative part and iust squeezed it dry. It never really worked. But it was an interesting case study.
We've been working with Globant at JWT, Y&R, Kantar. We've been working with Globant for many clients.
Does Xaxis eventually become more integrated with the fabric of the media agencies?
Xaxis is up and running in 14 countries. We've been very vigorous in expansion. It's quite explosive. This year we're seeing it rolled out in China and other countries around the world. The only company that did it was Havas, and on a much smaller scale.
Nobody has put together the online platform that we have. We are very aggressively expanding it. We have to be very transparent. We don't go down the opt-out route. We go down the opt-in route. Clients opt in to be a part of it.
This is a proprietary tool that our agencies will use. Its success or failure will be determined by client demand.
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