Wednesday, April 04, 2007

Sorrell: Only 50% Of Ad Money Targets Traditional Media

WPP's Sorrell: Mobile and New Media to Lead Ad Spend

By Enid Burns | April 2, 2007

“Start experimenting with mobile, test, refine, repeat,” was the advice offered by Sir Martin Sorrell, chief executive at WPP, at the Mobile Entertainment and Advertising Summit held by the GSM Association.

Sorrell reported about half of WPP-owned media buying agency GroupM's business in advertising is spent on traditional media, while the other half is spent on outdoor, new media, market research and public relations. “Those other areas are growing by and large faster than those traditional media,” he said.

Newspaper is the media most threatened by new media, followed by radio and TV, though “cable and satellite give more flexibility,” he said. “Probably the least affected is outdoor and cinema, though the question is raised as to how we’re all going to consume films [in the future].”

New media, and especially emerging channels like mobile, must define standards and reporting practices. “For good or evil, clients are going to not make big decisions in media unless they have measurable data to back it,” Sir Martin said.

A forecast released by GroupM late last year places mobile ad spending in the U.K. at £30 million, or $59 million, for 2007. Mobile is becoming a priority for the larger Internet companies like Yahoo, Google and eBay. “Today there are twice as many mobile phones as Internet connections,” said Sir Martin.

He added growth will be driven by the decline of mobile data costs, adoption of mobile search, and higher data speeds enabled by 3G networks. The opportunity for marketers lies in finding ways to lower the cost of data services through advertising.

On a global scale, growth in the ad spend will come from developing countries, Sorrell said, adding that he prefers to classify the identified countries as quickly-growing markets. He said to look beyond the "BRIC" nations -- Brazil, Russia, India and China -- to “neo-BRIC” countries like Pakistan, Latin America, Africa and the Middle East. “We’ve seen mobile developments in Africa and elsewhere,” he said. “Latin America and Africa, those two will become not just politically important, but economically important.”

No comments: