To accompany this article a series of interviews were recorded with such business leaders as Supporting the online drive
Sir Martin Sorrell and Nick Hynes share their views on the role of the agency.
Transforming a global giant
Sir Martin Sorrell is one of the world’s most authoritative figures in marketing. The company he founded, WPP, is a FTSE 100 giant with over 100,000 employees in more than 100 countries. The group’s renowned brands in advertising, marketing and communications include Ogilvy & Mather, JWT and Group M.
“Online is almost a quarter of our business. Out of our $55bn (€40bn) of billings, a quarter is digital, interactive and internet, or influenced by them in some way.
“WPP has three objectives. A geographical objective in relation to the faster growing markets. An objective to grow non-traditional forms of advertising and marketing. And an objective to grow measurable areas, such as internet market research, because we think measurability will be increasingly important.
“The mark of success will be if WPP in five to ten years is more Asian, more Latin American, more African and Middle Eastern, more Central and Eastern European, more outside traditional advertising and more measurable.
“It comes down to two things that are critical. One is geography and one is technology. Those two issues – or opportunities or challenges or threats – dominate everything that our clients do and that we do as a result. Those are the issues that we all have to deal with in a more concerted, assertive way.
“The smaller agencies that started from scratch have an advantage because they have a clean sheet. The older agencies have an advantage too because they have a database of clients, and the resources and networks to deliver across the board.
“In the last few months we’ve noticed that the new agencies have become quite frustrated because they can’t break into the larger budgets without the help of these more institutional frameworks.
“Mergers and acquisitions that bring the two sets together are not easy but it’s what you have to do. Even if you start something from scratch inside a network agency, you have the problem of integrating the two different ways of thinking.
Sir Martin Sorrell l Listen to the podcast
“Our acquisition of 24/7 took us full frontal into the new technological areas. I think many traditional agencies don’t understand that the business has changed. It’s still about people but it’s about a different kind of people.
“I think the medium is becoming – or has become – more important than the message. You have to tailor the message to the medium and increasingly WPP is becoming a media company, a purveyor of media where we advise clients how much to spend and where to spend it, and tailor messages for individual media – and that’s very different.”
A huge mathematical load
Nick Hynes is a pioneer in search marketing. In April 2000, he led the European launch of Overture, a year after the company transformed the American search environment through its then groundbreaking pay-for-placement model. From May 2004 to December 2007, Hynes was CEO of the IMW Group, which includes The Search Works, Europe’s largest agency dedicated to search marketing services.
“The search marketing industry is very young and it's had a fast-changing environment to live with. The principles are similar to direct marketing and therefore a mathematical and financial set of skills are required to succeed.
“For some clients, The Search Works manages up to a million key words that are entered into search engines. Many travel clients, such as First Choice Holidays, have tens of thousands of products. And when a consumersearches for a villa on Rhodes, they're not interested in hearing about a holiday in Barbados. It's our job to ensure that whenever they search for a product the First Choice option is near the top of the list.
Nick Hynes l Listen to the podcast
“On behalf of clients, we calculate the best words to list against and how much we should pay for that consumer to click on that search result. To work that out, we need to understand how many of the consumers that click on the search result actually buy a holiday. And we have to record all that sales activity to calculate what sort of margins First Choice is achieving through the search engine route to market.
“For tens of thousands of products, working 24 hours a day, seven days a week, that's a huge mathematical load. To do it, you need technology. A big difference from most forms of marketing is that technology is absolutely crucial. If you've got it, and have the skill to know what really works, you can achieve huge returns on investment – far in excess of anything else you can do in the world of marketing.
“But the costs are high – in skilled staff, training and technology. And that kind of investment is not usual for big network agencies, which tend to be professional services environments.
“That’s why independent search specialists continue to win huge chunks of the online marketing budget. The 2006 rankings for New Media Age showed The Search Works is twice as big as its nearest competitor, which was another independent. You didn't see a network agency until number three or four. We're relatively small but we have the knowledge, skills and technology to fight our corner very successfully.”