Agency bosses too old and change resistant, claims Sorrell

Sorrell says brands are not spending enough online
Sorrell says brands are not spending enough online

NEW YORK - WPP chief executive Sir Martin Sorrell claims that brands are not spending enough online because the people who run their agencies are too old and resistant to change.

Delivering the opening keynote session at ad:tech New York, Sorrell criticised brands for investing an average of just 13 per cent of their marketing budget online despite the rapid increase in digital media consumption.

The WPP boss claimed that brands are being prevented from spending online due to a lack of understanding on behalf of the agencies handling their media budgets.

"The people who run agencies tend to be of an older vintage - to put it politely," said Sorrell. "They tend to be resistant to change and want to spend the last three to four years of their careers travelling around the world rather than dealing with fundamental strategic issues on a daily basis."

Digital media already accounts for 25 per cent of WPP's $14 billion revenues, but Sorrell claims this will increase significantly over the next five years. He estimates that brands will boost their online spend to upwards of 20 per cent of their media budgets by 2015.

Outlining WPP's five year plan, Sorrell said the company will be more focussed on developing Eastern markets, more involved in non-traditional media and more geared towards helping clients qualitatively justify their media spend.

"WPP's strategy can be summed up in one simple sentence: new markets, new media and consumer insight," he told ad:tech delegates.

Sorrell also claimed the shift from traditional to digital media will be helped by the fact that brands are becoming increasingly focussed on ROI.

"I have never seen clients more focused on cost than they are now," he said. "New media gives us a way to quantatively evaluate media in a way that we've never seen before."

Sorrell claimed that WPP is "certainly not an advertising agency any more" and insisted that "technology is at the centre" of its development. "The companies that win are those that innovate successfully," he said.

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