Sir Martin Sorrell and Google-the-Gorilla

08 April 2014

With thanks to Arif Durrani whose ‘Media Week’ article provided many of the direct quotes in this post.

Sometimes you just get lucky. I was scouring the web for ideas when I stumbled across a live feed of last week’s Advertising Week discussion between Sir Martin Sorrell, and News Corp’s CEO Robert Thomson. Thomson was in mad-swivel-chair mode, swinging around so fast that he often appeared to face in several directions at once; Sir Martin was perfectly still and yet somehow and most unusually appeared rather unsettled.

I connected at just the moment when Sir Martin started to discuss transparency. It was “laughable” (his word) that anyone would think that Xaxis, his media technology business was anything other than totally transparent (“Advertisers aren’t laughing” was one immediate response on Twitter). I must say I wondered if somehow technology had informed the great man that I had joined the feed, so pertinent were his comments to stuff I’ve written here recently. I checked my camera was turned off. And hid behind my desk just to be sure.

Then he started on Google. Martin’s stated problems with Google are first that they are “not transparent” and second that “their sales force has been in trying to disintermediate us and hang us out to dry”. We’ll come back to the transparency point in a minute, but what’s behind the disintermediate issue?

Basically it would appear that Google has been going to see GroupM’s clients without involving GroupM. This is a bad thing as, in Sir Martin’s words: “There has to be somebody who has to evaluate the amount they [clients] spend and where they spend it”. Indeed there does; total objectivity is the cornerstone of every media agency/client relationship.

Having said that, media owners have been going to see clients directly forever and a day. Generally, if there’s a trusting, strong relationship between client and agency the client picks up the phone to the agency as soon as the meeting is finished, and together agency and client agree a course of action – maybe doing the deal direct might benefit the client more, which is something most agencies have no problem with. After all they get paid just the same and have to do less to close the deal.

Of course sometimes agencies of all shapes and sizes do have a problem with the direct sell – as such deals can mess up agency deals based on total volumes. These are deals constructed to benefit the agency as the rebates generated occasionally have been known not to find their way back to the client.

In any event, if you’re an advertiser why not go and talk directly to key media owners? You might finish up with a better or a broader deal. And anyway, it’s your money and your prerogative to speak with your key suppliers and partners if you choose to do so.

Then there’s the subtext that the GroupM guys have sought to involve their boss. Here’s the complete Sir Martin quote from the AW stage: “The problem is we have these lovely conversations at senior levels in nice parts of the world and then I go to the markets and our people tell me, ‘Martin you don’t know what you’re talking about, their sales force has been in trying to disintermediate us and hang us out to dry’. That is the problem”.

I can imagine the hollow laughter from various sales directors at this as they recall how often they’ve been assured by someone at the top of an organisation how important they are to their business, only for the same organisation’s buyers to beat four bells out of them the next day. It’s kind of how it works.

Then there is the lack of transparency point. Surely it’s hypocritical for Sir Martin Sorrell, one of whose operating units refuses to allow client-appointed auditors in to the business (despite the point that: “There has to be somebody who has to evaluate the amount they [clients] spend and where they spend it”), and which sees no reason to tell clients what was paid for the space purchased on their behalf, to accuse Google of not being transparent?

On what basis does Sir Martin make this accusation? Because (and I paraphrase): “When we went to see them they wouldn’t share their algorithms with us. So they’re not transparent”. 

I do believe that WPP and Sir Martin personally have been a source of good for the business. It’s largely through his and his peers’ efforts that the advertising business is these days taken as seriously as it is by the likes of financiers and the politicians. I also think that WPP is the most impressive of the holding companies, something I pointed out here. Plus, I worked for one of his companies, met him several times and was most impressed. But really this is nonsense.

I await Sir Martin’s assertion that Coca-Cola is a non-transparent organisation for not sharing the Coke formula with their partner agencies.