The pandemic affected the entire world economy but it struck “unequally.” Companies with resources were able to overcome the hurdles more effectively than the ones that did not have. The world will have to live with the differential impact for many years.
Beginning his keynote with an emphasis on unequal pandemic impact, Sir Martin Sorrell, Executive Chairman, S4 Capital Group, at the Vibe Martech Fest, Day 2 said the common factor among all the affected businesses was the race to digital transformation and the growth in digital marketing. “The marketing landscape has been heavily affected. Digital crossed 50 per cent of the worldwide media market, which is around $650 billion this year
Calling it the “Tale of Two Cities”, the former WPP boss talked about the growth of digital industry and the no growth/slow growth traditional industry, detailing the changes across consumer behaviour, media, and enterprises. “We have seen very significant changes in the last two years. Consumers were buying goods and essentials online for the first time. The second change is in the media itself — Live events have become hybrid events, sometimes totally virtual. As we come out of the pandemic, we will see more hybrid events. Enterprises have changed, too. People who have been thirsting for digital transformation have been given more oxygen as a result of what happened in the pandemic.”
In Q2 of 2020, a big hole was blown in the profitability of most companies. Now what they have done in response is to change the barriers. “The lethargy has been removed by the speed of change that the pandemic has brought on, and all the barriers within companies have been brought down as those change agents get to work.”
Given these changes, how do companies adapt to growth? The ad mogul stressed on three critical factors.
According to Sorrell, agility and adaptability are crucial not only during the pandemic but particularly after it. “The C suite is talking about agility but their ability to get their organisation to change swiftly is often very difficult; particularly, an analogue company trying to change itself into a digital company.” Talking about the concept of horizontality, Sorrell said, “It was once a crude way of getting people to think about how to build one firm as opposed to multiple silos and multiple verticals but this is the critical issue.” The ultimate focus has to be on creating “one brand”, and Sorrell believes that agility can get the organisation there.
Taking Back Control
Taking inspiration from Dominic Cumming’s slogan, Taking Back Control, Sorrell emphasised the importance of doing just that in the marketing space. He said, “Marketers have lost control of the marketing process” particularly after the great financial crisis in 2008.
“It became very fashionable to talk about cost control and zero-based budgeting (ZBB), but it is being disapproved [of]. We’ve seen many ZBB companies focus on eliminating costs rather than building top-line growth.” Sorrell believes it is crucial to build top-line growth through innovation and branding.
“You can have innovation without branding, but you cannot have branding without innovation. Many ZBB companies throttled innovation and to throttle the investment in branding was critically important. In that environment, marketers tended to outsource a lot of their activities.” He called it a terrible mistake. In the digitally-driven world that we live in today, companies cannot afford to spend weeks briefing agencies, talking about specifications, and coming up with solutions. There is only time for hyperspeed innovation and branding, and continuous refinement of business strategies, and for it all, taking back control is critical.
While businesses discuss the cookieless world and the first-party data prospects, Sorrell urges marketers to effectively use the data by pooling all the consented data together and allow them to integrate for better insights.
According to Sorrell, who is now head of the UK’s sixth-biggest listed media company, with a value equal to a fifth of his bete noire WPP, adding more money, more investments, more measurement into the digital areas should be the top priorities of companies. He emphasised the need for genuine growth, driven by digital transformation and not by the impact of the pandemic, or a fiscal stimulus.
Sorrell reckons the digital media market will increase from 50 per cent to 70 per cent by 2024, for which further investment in digital is critical. Optimistic about the digital industry, he said, “I am bullish about the industry…The pandemic has driven the pace of change at hyper-speed, and I’m optimistic about the prospects.”