Martin Sorrell Bets Amazon Will Reach $100 Billion In Ad Spend

Overall, media spend will continue to flow to platforms such as Amazon, Google, Facebook, Tencent and Alibaba for the foreseeable future. While regulation is the only feasible way to stop their dominance, GDPR has only helped the big platforms in Europe, Sorrell said.

“Companies pulled out of Europe because it’s too expensive [to comply with GDPR],” he said. “The irony about that is it’s made Google, Facebook and Amazon more powerful.”

Amazon’s growth in the media plan inevitably means more valuable data for marketers will be trapped behind another big walled garden. Of all the major platforms, Amazon is the most resistant to sharing data, followed by Facebook and Google, Sorrell said.

To fight back against their dominance, clients are investing more in first-party data by creating platforms or acquiring direct-to-consumer companies to get closer to their customers. Sorrell pointed to Unilever’s acquisition of Dollar Shave Club as a prime example.

“That fight to control first-party data is really critical,” he said.

Despite his bullishness on Amazon, Sorrell still saved some of his classic “frenemy” rhetoric for the platforms.

“One of the reasons their margins are under pressure [is because] they masquerade as tech companies, but they’re really media companies,” he said. “They’re selling inventory.”

S4: from peanut to coconut

Learning from three decades at WPP, Sorrell said his new company, S4, will focus on just the growth areas of the industry: first-party data, content and digital media planning and buying.

“A client once said to me, ‘Agencies talk about data but they don’t know what they’re talking about,’” he said. “So we’re going to try and get more depth in that, particularly first-party data.”

S4 will approach creative differently than WPP and other holding companies, where many agencies are “looking back with rose-tinted lenses at the Don Draper era,” Sorrell said. While the “big idea” may have been 80-90% of the business 30 years ago, it’s now the minority.

“We’re talking about creativity in the broadest sense of the word,” he said. “The balance between the big idea and distribution is shifting.”

Another key tenet of S4 will be to do things for clients “better, faster and cheaper,” Sorrell said, which “is a very crude way of putting it, but it’s at the heart of everything we’re talking about.”

“Whether you and I like it or not, that is the way the world is going,” he said.

While Sorrell didn’t specify what’s next for S4, he said he’d like to do two more things “fairly quickly,” but he did not specify what they were.

“Then I think I’d probably like to rest,” he said.

And as for his old kingdom, WPP, Sorrell said he “can’t remember a time when it’s been so intense.”

“Look at what happened to WPP last week: Six accounts moved in six days,” he said. “It seems to me when the tide goes out, all boats are exposed.”

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This post was syndicated from Ad Exchanger.