Martin Sorrell has vowed to "start again", weeks after his abrupt departure from WPP, the advertising, marketing and communications group he built over 33 years.
Speaking at the Techonomy conference in New York, Sir Martin said he had been “extracted” from WPP but that he was “going to start again. I’m not going into voluntary or involuntary retirement”.
WPP did not impose a “non-compete” condition on Sir Martin when its long-term chief executive resigned in April after an investigation into his conduct, allowing him to set up in direct competition with the holding company or any of the businesses he acquired and expanded.
Perspective
Leaving WPP had given him a better perspective on which parts of the industry were growing and adapting and which were held back by the “warts and problems that legacy companies have”, Sir Martin said, noting that countless clients had asked him “what is the new agency model”.
That model would be “more agile, more responsive, less layered, less bureaucratic, less heavy” than traditional advertising companies, he said, with a focus on technology, data and content.
Asked on the sidelines whether he intended to create such a “new agency model”, he replied: “We’ll see what happens.” He would not comment on whether he was raising money for a new venture or intending to start one by acquiring a shell company or other vehicle, much as he built WPP from a shopping basket company.
Sir Martin made clear he intended to “stick to his last” by staying in an industry he knew well and enjoyed, and that he would not wait long before making his next move.
He described the advertising and marketing industry as being driven by the rise of "seven sisters" of technology – giant companies from Apple, Amazon, Facebook, Google and Microsoft to China's Alibaba and Tencent. "These companies have so much power," he said, but were also discovering that this power brought responsibility, especially for the content flowing through their networks.
‘Frenemies’
At WPP Sir Martin helped popularise the idea that Google and Facebook were “frenemies” to media companies as they came to dominate digital advertising, but on Tuesday he said the two groups faced a rising threat from Amazon, which generated almost $2 billion (€1.68 billion )of advertising revenues in its last quarter and also accounts for a majority of all product searches in the US.
Alex DeGroote, analyst with Cenkos Securities, told CNBC last month Amazon’s advertising revenues could grow to $20 billion by 2020.
The rise of voice-activated devices such as Amazon’s Echo would also have profound “formidable” implications for consumer relations and the control of data, Sir Martin said. – Copyright The Financial Times Limited 2018
