Every Friday, The Big Smoke presents industry news curated by MediaScope. This week, we look at what keeps the world’s largest CEO up at night, the new advertising way and how Zuckerberg rules us all.
Sorrell: What keeps him up at night – And it’s not his 3-month-old daughter (Lara O’Reilly – BusinessInsider)
As the CEO of the world’s largest advertising group, WPP’s Sir Martin Sorrell has been interviewed an awful lot during his long career. And he often gets asked the same question: “What keeps you up at night?” Speaking on WPP’s fourth-quarter earnings call, 72-year-old Sorrell – whose wife recently gave birth to a daughter – shared his response. “The answer to the question ‘what worries you when you go to bed at night and wake up in the morning’ isn’t a 3-month-old child – it’s Amazon – which is a child, but not three months,” Sorrell said. Sorrell has good reason to be worried. Right now, Amazon’s advertising business pales in comparison to the likes of Google and Facebook. Amazon doesn’t strip out its advertising unit specifically in its financials. Amazon’s “other” ad revenue in North America – believed to mostly consist of ad revenue – grew 60% to $US1.3 billion in 2016. E-Marketer predicts Amazon will generate $US1 billion in ad revenue in the US in 2017. That compares to estimates of $US34 billion in revenue for Google and $US15 billion for Facebook.
Zuckerberg World President (Jean-Louis Gassée – MondayNote)
From a Harvard dormitory at the ripe age of 20, Mark Zuckerberg created one of the most successful companies of the Internet Age. He is liked and respected by his employees and leads what is probably the Valley’s best run organisation. Today, Facebook has become so powerful that it challenges established political structures and threatens to undemocratically twist the will of The People. I used to greatly admire Mark Zuckerberg. Now, I fear him. Here’s why: Facebook is now a supranational company.
Advertising in the 4th industrial revolution (Tom Goodwin – AdAge)
If the CES Event shows us the canvas for advertising, the Mobile World Congress (MWC) gives us the toolkit. MWC this year was built on the theme of the 4th industrial revolution, the idea that connectivity will be the key element that empowers business transformation and a paradigm leap in what’s possible. So what keys to marketing came out of the conference? What’s interesting about new technology displayed isn’t the human needs it reflects, but the behaviours it enables. Brands can now have access to information they’ve only ever dreamed of: knowledge of what people are feeling, what their plans are, their moods or intentions. We need to rethink the roles of brands in this world. How do brands keep top-of-mind? How do we make replenishment work for us? Brands need to be cautious in a time where the roles of memory and purchase change. What does this mean for advertising? I think it means we need to revisit every assumption.
Confessions of a digital agency exec: Consulting firms are coming (Tanya Dua – Digiday)
Over the last 12 months, the agency marketplace has been fundamentally altered. We are right in the midst of it now, and I see it continuing over the next two years. We will see some agencies survive and some get acquired, and a lot of shakeout in the market as we know it today. There will be many dead bodies along the way and a lot of roll-ups as well. If we look at the list of companies that play in the space, it’ll look very different in two years. We ourselves lost a very large project to a consulting firm late last year. They’re coming right on our heels, and they have C-level relationships, and money and resources to procure what they don’t have.