Sir Martin Sorrell on why advertising’s old signals no longer hold

For decades, advertising was read as a straightforward signal of economic confidence. When brands flooded television screens and newspaper pages, it suggested businesses were doing well. When advertising slowed, caution followed. That instinct still exists, but Sir Martin Sorrell believes the signal has fractured.

“I don’t think you are right,” says the executive chairman of S4 Capital and founder of WPP, pushing back against the idea that advertising no longer reflects economic health. “You are conflating two industries.”

Speaking during a visit to India, Sorrell frames the global advertising market as fundamentally split. Last year, he says, the industry was worth roughly one trillion dollars. About seven hundred billion dollars sat in digital advertising, growing at double digit rates across platforms. The remaining three hundred billion dollars, largely traditional media, was in decline.

“Yes, you would be right if you looked at the three hundred billion,” he says. “You would be wrong if you looked at the seven hundred billion.”

This division explains why advertising no longer behaves like a single economic indicator, particularly in fast-digitising markets like India. Overall industry growth remains healthy at eight to nine percent, but it is uneven. Digital continues to expand, while traditional advertising shrinks.

Within digital, spending power is increasingly concentrated. Google, Meta, Amazon and TikTok together account for roughly 500 billion dollars of advertising revenue. But Sorrell points out that these same companies are now directing vast amounts of capital elsewhere.

“They are spending not on operating expenditure, not on marketing spend, but on capital expenditure,” he says. “The projection for next year is about 530 billion dollars on AI capacity, compute and energy.”

That shift complicates the old relationship between advertising and the economy. Historically, Sorrell says, ad spend tracked corporate profitability closely. “If corporate profits were strong, ad spend was strong. If corporate profits were weak, ad spend was down,” he says.

“The analysis has to be more nuanced,” he adds. “You have to look at the three hundred billion and the seven hundred billion as two different industries.”

That nuance is critical to understanding the wave of consolidation reshaping media and advertising. Deals involving Warner Bros Discovery, Paramount and Comcast reflect stress in the traditional media economy. The IPG Omnicom merger, Sorrell says, sits squarely in that context.

For Sorrell, the real cost of such consolidation is not strategic confusion but human fallout.

“If it’s done violently, it affects the people and the clients,” he says. “If it’s done carefully and slowly, probably less so.”

Disruption also creates opportunity, particularly for independent agencies. But Sorrell is clear that not all services are equally attractive. He identifies content creation at scale, personalisation using first-party data, and algorithm-driven media planning as the most valuable areas today.

“Reducing the cost and time to market of content creation is one,” he says. “Using signals from platforms and first-party data is a second. And using algorithms for media planning and buying is a third.”

These opportunities matter especially for small and medium-sized businesses, which account for a majority of advertising revenue on large platforms.

“People forget that 60% to 70% of their revenue comes from small and medium-sized companies,” Sorrell says.

Scale alone, he argues, is no longer a durable advantage for agencies.

“Scale in media planning and buying is no longer a quid pro quo,” he says. “It’s about data and distribution and brain power.”

Artificial intelligence further complicates the equation. Advertising and services industries have historically benefited from labour scale, an advantage Sorrell believes will narrow as automation spreads.

“These are still tools that we use,” he says of AI. “In the short to medium term, machines are not more powerful than people.”

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The implication for India, he argues, lies less in scale and more in judgement and capability. Referring to the late Piyush Pandey, long regarded as one of Indian advertising’s most influential creative leaders, Sorrell suggests that talent of that calibre does not emerge from tools alone.

“If you have 1.4 billion people,” he says, “there will be a number of people of that calibre.”

 But cost based offshore advantages are likely to weaken, and technological capability will need to stand on its own merits.

“The technological skills have to exist in their own right, not because they’re cheaper,” he says.

Asked what advice he would give a mid-career agency professional navigating this environment, Sorrell avoids easy prescriptions.

“Learn Chinese. Learn Spanish. Learn code,” he says.

In a fragmented industry, he suggests, relevance will depend less on legacy scale and more on adaptability. Languages matter because economic and geopolitical power is shifting toward the Global South. Technology matters because AI, quantum computing and automation will reshape work. Cultural understanding, he argues, will separate those who endure from those who do not.

“The winners are people who understand cultural nuances,” Sorrell says. “And who understand the impact of technological change.”