Sorrell questions value of Facebook, Google ads

The pendulum has “swung too far” towards video and online content and may swing back in favour of traditional media, Sir Martin Sorrell, founder and chief executive of the world’s largest media agency WPP, told delegates at the Future Forum at the Sydney Hilton Hotel.

Sir Martin also questioned the effectiveness of advertising on digital platforms like Google and Facebook, criticising the relatively low audience measurement standards used online, compared to the engagement of newspaper media.

“About half of all video is watched online without the sound. The scale that is used for viewership is three seconds. Now that I would even say is ludicrous in relation to the hurdle that a TV viewer … or newspaper readership has to reach,” he said.

During his half hour Q&A session at the forum hosted by The Newspaper Works, Sir Martin canvassed a range of issues including new online companies that are in the “disruption business” and the rise of programmatic trading.

“You wouldn’t give your media plan if you’re a client, to a media owner. So why do you give it to Google? Google monetises its inventory just like any media owner. Google is not a technology company it is a media owner, the same thing applies to Facebook.”

Speaking about future of journalism, Sir Martin said media companies should avoid viewing print, online, radio and TV as segmented assets. He said companies need to experiment, drive their traditional assets towards digital and develop further opportunities for their online products.

“You have to change the engines on the aeroplane as you’re flying,” he said.

“It’s not going to be like it was and we have to get used to that. It’s not going to be as profitable, it’s not going to be done in the same way. It’s been disrupted so we have to fashion what we do to the new environment.

Sir Martin said there had to be more restructuring, reform and consolidation in traditional print, “but there is a very big opportunity in digital print and mobile print.” However, he said that in some respects the pendulum had swung too far towards digital and noted the enduring influence of print media.

“There’s been some very effective work in the UK showing, for example, that newspaper audiences are as big, or even bigger, than audiences of Google,” he said.

Sir Martin’s session created differing views among domestic agencies. Fusion Strategy chief executive Steve Allen said clients and their media agencies jumped on and followed trends like lemmings, without due regard and respect for the brand objectives or their markets and target audience’s behaviour.

“We, and many of our clients, ask critical questions like measurement criteria of viewed, opening rates, completion rates for every digital product or channel we consider,” he said.

“You would be crazy not to think about the issues, trends and analysis Sir Martin touched on.”

Carat Australia and New Zealand chief executive Simon Ryan did not want to comment specifically on Sir Martin’s speech but said newspapers work, and were a vital part of Australian media consumption habits.

“Newspapers deliver awareness, sales and an opportunity to advertise in a topical daily environment. It’s an important part of the media ecosystem and one that delivers a message along with other media that all reaches the required audience,” Mr Ryan said.

Zenith Optimedia Australia and New Zealand chief executive Ian Perrin said Sir Martin’s comments would not motivate any change in his media agency’s spending patterns or behaviour.

“Given the complexity of the modern communications landscape, it doesn’t make sense to make blanket, one-size-fits-all statements about spend profiles,” Mr Perrin said.

“We will invest our client’s dollars in the way that best delivers against their objectives, not based on dogma of whether we believe a channel is either over or under invested.”

Sir Martin also cautioned against traditional media companies having a “stuffy attitude” towards new forms and platforms for journalism.

The BBC, The New York Times, The Guardian have a very traditional, in my view, approach to news and to journalism which has to change.

“If you look at Vice, if you look at Refinery 29 … you will see a totally different approach. And that’s what journalists I think have to understand.”

“People are still going to read, people are still going to watch but they’re going to read and watch in different ways.”

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