The coronavirus has accelerated digital transformation and many are scrambling to adapt to the new working culture - Martin Sorrell weighs in on the impact.
Sir Martin Sorrell has worked as the longest serving WPP CEO and he calls the COVID – 19 a ‘Black Swan’ event – something unprecendented that changed the way we work and consume content. On Day 2 of the virtual conference hosted by Advertising Week, JAPAC in collaboration, the founder of S4 Capital sat down with the FT's Angela Mackay to talk about the different issues for brands, agencies and the economy today that have come up as a result of being locked down and working from home.
The coronavirus pandemic has accelerated digital transformation and many companies have had to scramble to adapt to a new environment where all bets are off in terms of business as usual and people might not fully understand what the new normal is. At the beginning of his session, Sorrell solemnly announced that the COVID – 19 is unlike any other recession the world has faced before. Many sectors are seeing mass layoffs and those who are still employed are navigating working remotely, from a space traditionally shared with their families.
He points out that the biggest tension involving China before the virus outbreak, was the trade war with USA that’s been going on for nearly 2 years now (since 2018). Sorrell added that not every industry/economy in the world is going to undergo a ‘V’ shaped recovery. There are some companies in sectors that have been adversely affected by the coronavirus (such as airlines, hospitality, hotels, etc) which will undergo a ‘L’ shaped recovery, taking time to return to levels of normal, seen before the virus hit.
He holds an optimistic point of view on how S4 Capital would weather the storm. He claims that he has a ‘glass half full’ outlook because technology dominates the company’s work portfolio. “We’re a purely digital company. Clients may be cutting budgets, but they’re shifting money online. People are moving to digital faster than ever – if you thought it was quick before, wait till you see it now,” he challenges.
He elucidates his point, explaining that technology, entertainment, healthcare, gaming are all part of the spectrum of ‘online content’. Viewers are consuming online now more than ever – one third of US households are consuming groceries online for the first time, educating kids online, telemedicine, educating kids online. Sorrell adds that time is the most valuable element of the essence – people now have more flexibility while working from home, increased time from their commute, etc.
“Technology is improving, but spending on traditional media is under very heavy pressure right now. With the mixing of first and third party data, clients are going to be driven back to platforms like Google, Facebook and TikTok. Those platforms were strong, but they’re going to become stronger than ever now. First party data is driving personalisation at scale which is what we specialise in,” says Sorrell.
He goes back to his favourite catchphrase while explaining the benefits of using the digital medium for visibility at this point in time – “It’s faster, better, and cheaper,” he says. Sorrell emphasises on the importance of agility for companies and how it is paramount now that they understand the digital ecosystem in order to be able to function within it, more efficiently.
He takes the example of tech companies like Microsoft, Apple, Spotify, Snap Inc etc and explains that these companies work so well within the digital medium because they understand what they do. “The holding companies are past their sell-by date. 50,000 people are going to be put out of jobs in their holding companies, worldwide. While they cut costs with these resources, we will be taking them in. This is the end of corporate culture as we know it and we hope to be able to maintain this culture, going forward,” he says.
On the topic of Minneapolis resident George Floyd’s murder and the Black Lives Matter protests that have currently engulfed the USA, Sorrell calls it’s a ‘heinous crime’. He likens it to the Me Too movement that saw media mogul Harvey Weinstein’s arrest in 2018.