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Tag: sir martin sorrell

  • The 43rd IAA World Congress in Beijing China, WPP's Sir Martin Sorrell took the opportunity to present to the gathering his key-note address

    WPP’s Sir Martin Sorrell outlines 10-point keynote at IAA World Congress

    By a correspondent

     

    With some of the powerful and influential names like Jim Elms, Global CEO, Initiative; Andrew Ward, Vice President Marketing, Etihad Airways; Ben Hughes, Deputy Chief Executive, Financial Times; Doug Pearce, CEO,OMG China; MykimChikli, CEO Zenith Optimedia China; Tim Andree,Executive Chairman, Dentsu Aegis Network etc gathered at the 43rd IAA World Congress in Beijing China, WPP’s Sir Martin Sorrell took the opportunity to present to the gathering his key-note address, which was more a ‘ten-point list’ on issues concerning the ad industry.

     

    The points included: 

    – Shift to East, South and East – meaning a potential shift in power in the world. The USA is still the center, but undeniably power is beginning to move. With a focus still on “BRICS and the next eleven”. WPPsees a G2 world in the future.

     

    – Overcapacity and shortage of human capital – in key industries such as automotive there is massive capacity, but changing lifestyles, and aging populations.
    – Rise and rise of the web – 12 years ago WPP’s web business was close to zero and now it is 30 per cent.

     

    – Growth of retail power – and the changing relationship now between retailers and consumers as populations move to urban areas, with busy two earning families using the e-commerce more and more.

     

    – Importance of internal communications – data – people talk about “data” and we are now applying more technology to data and its role in our organization’s communications.

     

    – Global and local structures – WPP sees the rise of Africa -which represents significant opportunities with a dramatic shift in power taking place.

     

    – Relative power of finance and procurement – the balance of marketing functions and finance is now very much out of balance, and this needs to be addressed- in all parts of the world. Not just the western economies.

     

    – Growth of government – WPP has government clients in almost every country.They are more significant players than ever. In some parts of the world, such as China, there is also an element of “Government run capitalism”.

     

    – The acceptance of social responsibility – the issue and attention towards sustain ability is considerable now. And for companies to “do good” is still”good” for business.

     

    – Industry consolidation – this was a big news day with the announcement that the Publicis Groupe and Omnicom Group merger is not proceeding.

     

  • Sir Martin Sorrell's WPP may buy 60% stake held by Arun Nanda and Ajit Balakrishan in Rediffusion Y&R India

    Is WPP close to a full buy of Rediff?

     

    By Pritha Mitra Dasgupta

     

    MUMBAI: WPP may acquire the 60% stake held by Arun Nanda and Ajit Balakrishnan in Rediffusion Y&R India, said two persons with direct knowledge of the development, adding that both sides are in negotiations over a possible deal.

     

    The London-based advertising and marketing communications company, which already owns 26.67% of the Indian agency, has been trying to buy out Messrs Nanda and Balakrishnan since 2002. When contacted, WPP CEO Martin Sorrell said queries about a stake purchase were speculative and therefore “there are no answers”.

     

     

    Win-win for both, say industry observers

     

    By A Correspondent

     

    Sir Martin Sorrell is not known to lose battles with easily. So, even though he nearly tired of all attempts to buy the equity of original founders and promoters Arun Nanda and Ajit Balakrishnan, he got back at them by moving two prized clients to other entities in his empire.

     

    The saga starts in 2000 when Y&R, 20 per cent co-owner of Rediffusion (along with Dentsu) from 1994, was acquired by WPP. Starting 2002, when Mr Nanda was inducted into a larger Y&R leadership council, attempts were being made to woo him and get him to part the balance 60 per cent.

     

    With time, Dentsu became a passive partner, albeit a partner with 13.33% stake. The Japanese giant’s interest in a jv with Sandeep Goyal and later on its own, didn’t deter the Rediffusion interest from staying on, even as the D from Rediffusion DY&R was dropped.

     

    However, when Sir Sorrell realised that Mr Nanda wasn’t going to give in easily, he gave his Indian partner the shock treatment. Prized accounts of Colgate Palmolive and Airtel moved to other WPP entities a few years back.

     

    The loss of accounts coincided with a crisis in creative and business leadership in the agency has been an issue for Rediffusion. Despite a wealth of talent having worked with the flagship agency, it’s Everest,  under the baton of ex-JWT Dhunji Wadia, which has taken rapid strides.

     

    Rediff-watchers believe a complete buy-out will be a win-win for all stakeholders and energies being spent for the right reasons.

     

    Although the article alongside quotes an amount of Rs 150-200 crore for the stake sale, a few others with some knowledge of the development say it will be less than Rs 100 crore.

     

    Guess we’ll need to wait for things to happen.

     

    Arun Nanda, CMD, Rediffusion Y&R, said talks between the two companies were an ongoing process. “There has been no sale of any shares to WPP, nor any agreement to sell concluded,” he said. However, a WPP insider said David Sable, global CEO of Y&R, and Matthew Godfrey, president, Y&R Asia, helped Mr Sorrell take talks forward during their recent visit to India.

     

    ‘Around Rs 150-200 crore for stake’

    WPP is on the verge of closing the deal, this person said. Nanda refuted speculation regarding his agency’s financial performance.

     

    “We are a profitable agency, in the top 10, with good clients and strong brands. We have been profitable year on year, every single year since 1973!” he said. “We have clients in our portfolio who have been with us for 37+ years and we are not dependent on any one client.”

     

    Mr Nanda’s comment was in response to some observers saying that the agency had lost some of its sheen. Based on this, one WPP executive said the price for the additional 60% stake may be about Rs 150-200 crore. This writer wasn’t able to independently verify this valuation.

     

    Dentsu, which owns 13.33% of the Indian agency, said it wasn’t aware of any likely deal. “We haven’t received any official intimation on this,” said Rohit Ohri, executive chairman, Dentsu India Group.

     

    Nanda also dismissed talk regarding a possible Tata group corporate pitch.

     

    “The Tata group has recently asked a few global agencies (based abroad) for a presentation for their brand work outside India,” Mr Nanda said. “This assignment has nothing to do with the Indian market. Rediffusion is not involved in this pitch.”

     

    Rediffusion Y&R India fully owns ad agency Everest Brand Solutions and allied businesses such as VML Qais, a digital agency, and Brand Asset Valuation. If the deal goes through, Mr Sorrell may not consolidate the businesses as he has always encouraged separate, competing brands under the WPP umbrella. However, there could be a name change to reflect any new ownership.

     

    Source:The Economic Times

    Copyright © 2014, Bennett, Coleman & Co. Ltd. All Rights Reserved

    Licensed to republish

     

  • PR is clearly the main aim, as the WPP statement contains a number of legal flaws, NDTV notes, asking WPP to correct its "badly damaged and dishonest ratings system in India"

    Battle of courts spills to media statements, as NDTV rubbishes WPP claims

    By A Correspondent

     

    It was meant to be a battle fought in the courtrooms, but not unexpectedly, it’s now got down to the streets. It started with a statement issued by WPP on Wednesday, and on Thursday, news broadcaster NDTV too issued a statement.

     

    We publish it as is, so that none of the finer details are lost:

    NDTV is baffled and amused by the PR effort by WPP. PR is clearly the main aim, as the WPP statement contains a number of legal flaws.

     

    It is indeed strange that they term the suit as hypothetical as it is available for everyone to read in full on the website of the Supreme Court of New York (as reported first by the Hollywood Reporter and read by many since). In fact it appears as though WPP must have read it too as they refer too many details in the NDTV complaint and respond with several false denials!

     

    Moreover, while they claim that the suit has not been served, they surely know, or should know, that service was indeed made on the 10th of August in New York, and processes under the Hague Convention are also underway as is the normal procedure. Moreover, the lawyers for Kantar Media Research (UK), have already confirmed to NDTV that the service on their client was acceptable in New York. In fact, matters have progressed much beyond ‘service’; the lawyers for Nielsen have been in touch with our lawyers and have requested for an extension. In addition, the CEO of Kantar has been in touch with us and has acknowledged receiving the complaint. NDTV has affidavits to substantiate this.

     

    While many may attribute sinister motives to WPP’s Statement which is full of factual and legal errors, NDTV would give them the benefit of the doubt and assume WPP has made a silly error which simple cross-checking through their internal systems will soon correct. If all else fails, for details of the complaint we suggest they visit the Supreme Court of New York’s website where the “non-hypothetical” complaint is detailed in full.

     

    We suggest WPP refrain from using their massive PR machine to make baseless threats against NDTV. Instead we request that WPP should focus on honestly fixing (for want of a better word!) their badly damaged and dishonest ratings system in India – which in their Statement they acknowledge they have control over and is their responsibility.

     

  • He also hinted at boycotting Cannes next year if a proper investigation was not undertaken by the organizers of Cannes for this year's jury decisions

    I’m not sure if DDB will participate in Cannes next year: Amir Kassaei

    By A Correspondent

     

    DDB Worldwide Chief Creative Officer Amir Kassaei has indicted some Cannes Lions 2012 jurors of bias. Mr Kassaei alleged that judges of certain global holdings had been ordered to vote for work from their respective groups. In a video interview to Campaign Brief, Mr Kassaei said that the integrity of Cannes was at stake and the authority as well as the value of the festival was being undermined. In the same interview, he also hinted at boycotting Cannes next year if a proper investigation was not undertaken by the organizers of Cannes for this year’s jury decisions.

     

    [youtube width=”400″ height=”225″]http://www.youtube.com/watch?v=t27gPMSJND0[/youtube]

    Mr Kassaei said: “We (DDB) as the most awarded network in the history of Cannes will go into a very tough discussion about next year because we cannot accept that the people are willingly voting against the best work in the jury.”

     

    Mr Kassaei’s accusations follow claims by WPP’s Chief Executive Sir Martin Sorrell that Cannes judges could have been pressured into block voting, which has damaged his agencies chances of winning. Sir Martin Sorrell was quoted in The Guardian saying he had heard rumours of certain jury members being pressured into voting for selected entries and dismissing quality pieces of work from the judging process without due cause.

     

    The jury in question was chaired by Mainardo de Nardis, the Chief Executive of OMD Worldwide and Manning Gottleib OMD, Omnicom-owned media buying agency won the Grand Prix award for a Google Campaign.

     

    Reacting to Sir Martin Sorrell’s allegations that Omnicom somehow rigged the Media Lions award in favour of Manning Gottlieb OMD’s work for Google, Mr Kassaei said that WPP executives were ordered to discriminate against Omnicom agencies’ work in the jury voting: “I have since been notified by no fewer than 12 jury members that people from other holding companies this week are being briefed to kill Omnicom, especially BBDO, DDB and TBWA, this is a fact.”

     

    He added, “What differentiates Omnicom from WPP is the creativity and innovation. I would respect them if they did the better work. Just look at the objective facts, in the media category, WPP is doing better than Omnicom, so accusing us that we’re playing silly games is not right.”

     

    Furthermore, Mr Kassaei said: “The problem we have at the moment is that Cannes used to be the World Cup of advertising because of the qualification and the result of the juries, and at the moment I don’t have a feeling we are at the World Cup of advertising because a lot of people are playing politics instead of judging the best work of all.”

     

    In an interview to Afaqs on the judging of Media Lions, Dominic Proctor, President, WPP’s media holding company, Group M, said: “I’ve heard a lot of whisperings in bars and restaurants that there did seem to be some kind of strange voting…I heard rumours that certain blocs of votes were being encouraged. If that’s the case then it would be a worry because if Cannes wants to be taken seriously as a media and a creative platform, then we need to make sure that the process is not in any sense corrupted.”

     

  • The GroupM boss unplugs to Anil Thakraney on commission (v/s fees), corruption, creatives & more

    Creative agencies have allowed themselves to be dumbed down: Vikram Sakhuja

     

    By Anil Thakraney

     

    Vikram Sakhuja heads GroupM, India’s largest media buying conglomerate. In a long and animated discussion, the ace number cruncher shares with us insights from the Indian media industry. As well as his own organization’s approach to the various challenges staring at the media business.

     

    Fifty-year-old Sakhuja is an IIT/IIM grad, and he did a number of years in marketing before he shifted to the world of media in 2001, when he signed up as Managing Director of Mindshare Fulcrum. During our meet, I could see that the outspoken GroupM boss is extremely passionate about his work, and is someone who could get easily agitated over provocative questions. Thankfully, we had a smooth run. Guess it’s all thanks to Yoga which Sakhuja has recently taken up. 🙂

     

    You were a hard-core marketing man at one point. What prompted the switch to media?

    I believe in taking the career as it goes, and taking decisions at different points of time. Let me take you through my career graph to explain this. After IIM, Calcutta, I was pretty clear I wanted to get into the marketing side of things. So I joined P&G and did eight years there. When I joined them, Richardson Hindustan Limited (RHL) was becoming Procter & Gamble (P&G). So when I started out, the company had RHL values and very quickly the organization got Procterised.

     

    And you were not happy with that?

    I was happy with that, but Procter believed in the system of specialization. So the guy who gets into sales, stays in sales. The guy who gets into advertising, sticks to advertising. I was in research and they extended that to marketing services. I learnt a lot there, but later on I wanted to move to brand management and P&G wasn’t allowing me that. And I didn’t want my epitaph to read ‘Marketing Researcher’. So I moved to Coca-Cola which was more flexible in these areas. Out there I managed the entire brand portfolio. That worked very well for 5 years. I was reporting to Sanjeev Gupta in those days, and he was handling both, marketing and bottling. And later he went on to take up a bigger job. So they got Shripad (Nadkarni) to head marketing, and I felt my job would get undermined a little bit. And so I left to join Star TV.

     

    And you lasted there for just one year.

    It was a mistake. I call it jawaani ki bhool. Peter (Mukerjea) said they wanted to start a strategic marketing function there, and it would include marketing of the creative product as well as on-air marketing, which is where the bulk of the spending goes. But it didn’t pan out like that because the programming department had a territorial interest in the programming piece. So it became very clear to me this was going to be an off-air game, and that didn’t have too many legs. And I left Star without a job. Later, Ranjan Kapur introduced me to Andre Nair (this is year 2001) who was looking for people to start Mindshare in India. We had a drink and one thing led to another. I felt a little trepidation in the beginning because I perceived ad agencies to be a little unprofessional. But later I thought about it rationally and it made sense. And so here I am.

     

    There are large media shops under the GroupM umbrella. How do you manage to give personal attention to each one?

    I am running GroupM, I am not running Mindshare or Maxus. There are capable people running those. I am a management by objectives kind of a person. One aspect of my deliverable is Profit & Loss, there’s no getting away from it. I have told my guys we should get growth from our existing clients. We should have the source credibility to go to them and manage 100% of their marketing investments. That is the agenda I drive. Then, I have to create an eco system for technology, talent and on how to do things better. The scope of service has actually dumbed down, clients are paying peanuts and they are getting monkeys. So I go and tell my clients if they want the right kind of talent and want to get the value out of it, then this is how it works.

     

    I suppose you operate more as a coach than as a player.

    Do I meet clients? Yes, I do. Am I directly involved in the day to day plans? No, I am not. Unilever is our biggest client. So every year at least one or two deals I will sit in on. Also for other clients. I love to be there for the sheer passion of it.

     

    What is Sir Martin Sorrell’s brief to you?

    Martin is pretty hands-on in most of the businesses. I rely on him more for counsel. I whet my new plans with him. For example, I went to him with the idea of celeb endorsements. And he felt it wouldn’t work, but asked us to try it anyway. And it didn’t work. Then there was a time we were offered some sweat equity in the IPL Deccan Chargers team. I took it up to Martin and he didn’t think it was a good idea, because he didn’t know the nature of the animal. But he’s brilliant, he is one of the few guys who understands our business, he wants to get in deeper.

     

    What is your stand on the shift from the commission system to the fixed fee system for media agencies?

    I definitely support the fee system. Though I would prefer a balance of commission and fee. Because in a growing economy you win with commissions. But when spends are not looking good at all, as is the case this year, fee bails you out. In principle, however, I like the fee system.

     

    How are the clients reacting to it?

    The people who take their marketing seriously believe in the fee system in letter and spirit. The top notch companies like Unilever, Ford, Pepsi, etc, totally get this. I believe clients should pay us Cost + for service, and a factor of that for the value we are able to demonstrate.

     

    What qualities do you look for in a media buyer in today’s time?

    You must understand that in our organization we don’t just buy media. I would like to believe that our agencies are actually driving the marketing agenda, probably more than the creative agencies. Most of the creative agencies have allowed themselves to be dumbed down, most of them are only interpreting briefs in a TV commercial format. They are only driven by the tactical creative idea rather than a long term view of the brand. All these wonderful creative minds should spend a little time thinking brand stewardship. Out here, we want people who can think account planning and communications. People who can understand the brand, the consumer, and then have the ability to unlock all the media solutions. So the media person needs to understand content, activation, digital, conventional media, and then he has to see how all this comes together.

     

    Key challenges ahead for media agencies?

    The clichéd one of course is that the commissions we earn are not allowing us to invest in the best talent. But we have to all individually work ourselves, show value and then ask for stuff. The other challenge is in the digital space. The erstwhile DNA of the media companies excluded digital. I believe integrated media planning is the way to go. This is distinct from multimedia planning, which had the TV plan, print plan, radio plan, etc, all working in silos. But with the increasingly multi media environment, the key is integrated planning. And digital is allowing that seamlessness even more. We have embraced this some time back.

     

    And yet, the media buying business, after the unbundling, has got totally commoditized. Shashi Sinha said to me the media planner has become a zombie.

    I was the first guy to bring the AOR into the country. So you can blame me for the disintegration of the full service agency. (Laughs) I would say each of our agencies has its own planning way. Maxus has something called ‘Relationship Media’, MEC has got ‘Navigator’, and so on. Each of them talks the consumer journey. They talk much more about the communication challenge. I am actually finding the plans looking more different now than they were earlier. So I disagree with my dear friend Shashi Sinha. Maybe I am not cynical. The planner is alive and kicking. It’s in fact the most exciting time to be in the media because of the large amount of fragmentation and the large amount of media choices.

     

    You did a stint with television. Do you foresee threats to this medium in the near future?

    Yes. The problem with TV today is that it has become a media game of the value of the inventory. At the end of the day, there are only about four million commercial GRPs being broadcast every year at an all India level. And that’s growing at 2 or 3% per year. This is the market for TV eyeballs. So like it or not, you have to extract value out of this. Today, at last count, we have 500 or 600 channels, and it’s getting fragmented. If an Imagine TV dies, someone else will pick up ratings. And if someone else launches, there’s further fragmentation. So the problem is that the same money is chasing some eyeballs. Until the new ratings system comes up and there’s a tectonic shift, you are talking about a metastable equilibrium. Now if the value has to go up, either you have to deliver more reach, or you have to deliver some associated imagery or sponsorships or incremental value.

     

    When do you expect the shake-out to happen in television?

    We’ve been expecting a shake-out since 1996. I guess some people seem to be having deeper pockets. I am not a finance guy so I don’t know how it works. But I can’t imagine many of them are making money.

     

    Think the IPL is losing some of its sheen?

    No. The ratings this year were a tad higher than the last year. But for all practical purposes, have held on to last year’s levels. It has stabilized at about 5 rating points. In fact, this year was the best year primarily because of the games, which went down to the wire.

     

    And it’s a good investment for team owners?

    For them it’s going to be a slow burn. You have do it sensibly, like the KKR franchise does, and I think they make money. Whereas a large number of other people don’t make money. It’s about how you manage the entire franchise.

     

    There’s a perception that you guys are not passing on bulk rates you get from the media to your clients.

    We have something called the WPP Compliance. And we take it very, very seriously. So we are making sure that we do everything as per our contract with each client. In letter and spirit. We are definitely not holding back anything which is due to a client. We have a media owner invoice and it’s backed by an agency invoice. If the clients want to audit us, they are most welcome to do so. We are a global leader in this space doing global deals, we won’t mess around with something where there’s a breach of trust involved. We can’t afford that.

     

    Perhaps this was one of the reasons Reckitt Benckiser came up with the idea of agencies paying to pitch, and compensating them in case of a drop in ratings.

    They invited us to pitch and we asked them if they were being ridiculous. We turned them down. If somebody has an obscene point of view, I cannot subscribe to it.

     

    And yet, some agencies pitched for that account. Isn’t the industry united in these things?

    I thought we were united on that but obviously we weren’t. What do I say now?

     

    You’ve done many years in this business. Ever thought of starting out on your own?

    The thought has crossed my mind but I didn’t pursue it. I am not a very entrepreneurial guy. My philosophy is: Don’t fix it unless it’s broken.

     

    Does the lack of adequate talent in the media industry frustrate you? Is it a constant battle to find the right people?

    Yes, it is. But we have to be able to pay right to get the right talent. And for that we have to work our own internal financial structures. The level at which we work, there’s only so much we can afford to pay people at the entry level.

     

    Is there corruption in this business? There are allegations of planners taking money and other favours.

    One hears about these things from time to time. There is an opportunity for something like this, and clearly we have to plug it. This is where I believe organization culture is very important. If conversations in an organization involving integrity are strong, then the one or two people who entertain these thoughts will find themselves in a very uncomfortable situation.

     

    Have you ever fired people from your company because of this?

    Oh yes, I have.

     

    I saw a Youtube video of yours where you mention something about getting stressed out at work.

    I tend to be very animated and passionate, and I do get worked up. But I have been doing Yoga and stuff like that. And that’s helped. I have also started taking it a bit easier now, we have a good team. And at the end of the day, tension lene ka nahin, dene ka! (Laughs.)