Ad giant WPP fine tunes its digital media strategy

Despite a profit rise in the first six months, every night the head of the world’s leading advertising agency, WPP, is still paranoid about his future.

In last week’s exclusive interview with Suthichai Yoon, chairman of Nation Multimedia Group, Martin Sorrell, founder and chief executive officer of WPP, admitted that the disruption in the new media business was among his greatest concerns as this new media was one of four key strategic priorities to drive his advertising powerhouse to growth in the next five years.

“What brings you here, Sir Martin?” Suthichai asked the WPP boss at a cosy corner of the 135-year-old Mandarin Oriental hotel.

Sorrell said he was on a visit to Asia-Pacific to update himself on trends and market information and take those insights to the New York office for next year’s budget plan. He toured Jakarta, Singapore and Thailand.

“Although Thailand is the last destination, it’s not less important,” he said.

In Bangkok, WPP has about 1,500 staff, generating annual revenue of more than US$150 million (Bt4.9 billion).

WPP has a strong presence in Asia-Pacific. China is increasingly becoming an important market with a 1.4 billion population, so he has to visit the country six times a year. China is considered a new market.

The big growth for his business is in the new markets so WPP aims to increase the share of revenues from faster-developing nations to 40-50 per cent by 2019. Other developing markets are Brazil, India, Indonesia and Thailand.

Besides emphasising new markets, WPP also prioritises new media, data investment management and horizontality as its strategy for business prosperity in five years. 

It aims to increase new media, including digital media, to 40-50 per cent of its business and to increase more measurable marketing services to more than 50 per cent.

Horizontality is ensuring that teams in each market can work through client teams for the benefit of their clients. WPP’s digital accounts amount to more than $6 billion or 36 per cent of total revenue.

Consumer behaviour has changed due to the digital revolution, driven by the rise of mobile Internet users.

“Thailand also relies heavily on smartphones,” he said. This trend presents huge opportunities for digital activities, shoppers, retail marketing and e-commerce.

Asked about the future of traditional media, he said ad spending via some classic media channels was migrating to digital media. 

TV remains dominant but young viewers are now watching their favourite TV programmes on smart devices rather than TV sets.

“Even me. I had never thought before that I have to watch a full format TV show via my mobile phone,” he confessed.

He advised  brands and media owners to learn how to optimise benefits from multi-screens in order to engage more with audiences with classic and digital formats and social media across platforms.

Though WPP is banking on revenue from digital media, he is still concerned about costs for the short term. While for the long term, with the digital revolution and the disruption to new technology is the biggest threat for WPP.

“I stay paranoid and insecure  every night about digital disruption in new technology,” he said.

“How to deal with this situation? Do you have any advice for us?” Suthichai asked.

The WPP CEO said: “To deal with the rapid change and uncertainties, we have to move fast, take risk, and be paranoid.”