What Makes Martin Sorrell Angry?

Image: Gireesh GV for Forbes India
Martin Sorrell,64, CEO of WPP Global

What’ll it take for that to change?
People’s attitudes will need to change. There is still an anti-intellectual element in our industry. Charles Saatchi [founder of advertising firm Saatchi & Saatchi] said in his book, “You don’t need academic qualifications in this industry.” Well that may be partly true, but all things being equal, I see someone who’s taken the time to go to a good design, art, business school or university or even engineering school… I’d prefer them to someone who didn’t. There is this sort of anti-academic, we haven’t had in agencies like Ogilvy, JWT and Y&R that are in a sense blue-blooded.

So I think it is an issue. Therefore when I started our Fellowship programme my biggest worry was that people would copy us, but the fact is they haven’t. So nicking things, stealing things or people is the way we operate, which ultimately isn’t a good idea and we won’t build a healthy or vibrant business unless we change our attitude.

Clients say they’ve been clamouring for years that agencies aren’t bringing in the best talent to the table. You also admit that the problem is an issue even within agencies.

There’s strategic thinking, lets call it planning. There’s creative execution, and then there is distribution. There are specialist skills required in all these areas. I don’t think you can make a broad generalisation about creative agencies not investing. But if the leader of an agency is doing what you mentioned [in the question], then he or she won’t last very long. Because you have to make those investments.

I do think on the talent side the biggest issue is we don’t consistently recruit people from the best places, and I’m not talking about only India.

So what are you doing at WPP to change that?
I mentor some of our fellows — my mentoree was assigned to me today morning. And we will continue to do that. We have about 100 of them floating about in the business, which I don’t think is enough. I think we have to change otherwise in the long term we will lose out. The war for talent will get more intense with all the demographics going against us, even in a country like India that has this massive young population. But we remain nickers and stealers. (Laughs)

We invest each year, $9 billion in our people.

We spend a $1 billion on property, we spend $350-400 million on fixed capital investments. We spend less time on the $9 billion than we do on the $350 million. Number of times we agonise over buying this computer, or that software. But the human investment that we make is made just like that (snaps this fingers).

We have instituted 360-degree evaluations throughout the company, we do regular succession planning, we do look at the top 300-400 people in the company… but we don’t do enough of it. Goldman invests in people virtually the same as us, 58-59 percent of their revenues while we’re at 57-58-60 percent. Yet they spend eons on evaluating their people, and you know that if you’re at Goldman and you don’t co-operate inside the business with your fellow people, you’re dead.

But isn’t Goldman much more homogenous?
Well, they are uni-branded that’s true, and they’ve grown less through acquisitions than we have, and they’ve been at it longer than we have… not compared to our individual companies, but WPP. So they have that advantage, but it’s inbred. It’s not inbred in our industry, and that has to change.

You’ve used acquisitions to expand your footprint in the digital space very aggressively.
Probably in digital the primary growth has come from [acquisitions], may be it’s 50:50, but organic has been a very strong component.

How successful have you been in cross-pollinating the acquired capabilities into your existing businesses?
They’ve broadly been three buckets. One has been a very strong view that Ogilvy One is one of only two digital interactive agencies that are truly global. And then you have Wunderman and Ogilvy both around $800-900 million each, you’ve got G2 at around $300-350 million and RMG Connect with about $150-200 million. Those four networks you have to continue to grow.

Two is acquisitions such as Blast Radius, VML, Aqua Online or Blue which you graft on to those networks.

The third is standalones like 24/7 Real Media that we’ve merged the search expertise with GroupM, and investments like a JumpTap and Visible Technologies.

But how’re you are taking digital to other group companies that aren’t already focused on the space?
There isn’t a company in the group that doesn’t have some form of digital expertise. There is no company within WPP where digital is zero percent of revenue. There are companies where it is 100 percent, there are companies with 50 percent and those with 25 percent. There are three strategic priorities for us at the global level — new markets, new media and consumer insights. The message is very clear, I mean it might be the wrong message, but it is very clear. So you know what your marching orders are.

Those companies that don’t respond to that, suffer. Not from any action we take but in the marketplace. Because those three things are only an expression of what we believe clients want. If I was running, or trying to run, one of our clients, those are the three areas I would focus on.

After having been spun out, media companies are now aggressively expanding their capabilities and offerings. Meanwhile digitisation will increasingly force advertising, media and digital to work together under the same roof. How will you handle the ensuing conflicts?
Yes, we have those territorial [conflicts], and there have been a couple of articles that have been written on this topic. That’s because the trade press loves to leap on this stuff. We say no. We’ve had a couple of proposals within the group when media companies wanted to set up creative. It is a very blurred line, it’s like saying what is television today, what is Internet-delivered TV, is it TV or is it digital? And the answer is that it’s all becoming blurred.

Yes, but there have been cases of clear, explicit attempts to develop creative services that sit more inside a JWT, Ogilvy, Grey or Y&R than they do in a Mediacom, Maxis, Mediaedge or Mindshare. But join the club, as you are likely to have a group of highly motivated people who are trying to expand their businesses and there is naturally going to be some collision.

And you’re okay with that?
I’m not okay with it. Do I find it fun? No, I don’t like it… but it goes with the territory. The other way is to have everything, like with a McKinsey or a Goldman, within a uni-branded company. But that would be a disaster. If we abandoned all our brands and made ourselves uni-branded, we’d have a nice and efficient system but probably no revenues.

Like all these things it’s a question of balance. I’d rather have strong pillars on which I would put the integration roof than weak pillars and very strong integration on top. I’d rather have the daily struggle of trying to get people to work together, either functionally or geographically, and have strong functions. That is a stronger structure than having an elephantine company where everybody marched to the same brand.

You’ve been pursuing an acquisition-led strategy for over a decade now…
It sort of goes into phases. 1985-90 we were aggressive on the acquisition front, we did JWT in 1987 and Ogilvy in 1989. Then in the 1991-92 you had the recession which was a very tough time. We had nearly a decade, eight years, with no major acquisitions. We were then fairly aggressive in the decade of the new millennium, but I wouldn’t say we were as aggressive as we were between 1985-90. So there’ve been those phases.

Now our organic growth is 0-5 percent, earnings or profit growth of 5-10 percent. With acquisitions we take that to 5-10 percent top line and 10-15 percent bottom line, which are very aggressive numbers at our size, even though we are a medium sized company.

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