There will be a lot of acceleration between sales, marketing & IT: Sir Martin Sorrell

In a conversation with Rahul Kanwal, News Director, India Today, and Aajtak, India Today Group at the World Economic Forum in Davos,  Sir Martin Sorrell, the Founder and Executive Chairman of S4 Capital plc, weighed on a variety of topics. 

The longest-serving chief executive of any FTSE 100 company shared his thoughts on advertising and marketing trends, the future of print and TV in the age of digital, Elon Musk’s Twitter takeover and his vision for India. 

On quizzed about the ad trends that he will keep a close eye on this year, Sorrell had this to say: “Two things – One is moving down the funnel as we call it to activation and performance. So there will be an emphasis on volume, revenue growth, ROI, media mix modelling, and digital spend which is easier to measure.”

The second thing he will keep an eye out for is digital transformation. “Because margins are going to be under pressure. Most analysts are forecasting that earnings will be down this year. There will be a correction on earnings and there will be pressure on margins.”

He noted that there will be a lot of acceleration between three functions: sales, marketing and IT. “They’re coming together and they have to come together to make a case to procurement and finance – which have more power inside corporations.”

Sorrell boils it down to two crucial goals: “Top line growth and getting the cost down.”

Kanwal also asked Sorrell about his outlook for traditional media, but the advertising wizard said that his forecast is “pretty gloomy.”

By 2025, he believes that the ratio of advertising earnings to GDP (as per the US) will be around 1.5% and a large chunk of the same will come from digital media. 

He added that the grip of traditional media on younger viewers is loosening and clients have been shifting their ads to platforms that are accessed more by the young. 

“So the clients are saying ‘why am I spending an inordinate amount of money on classical TV or analogue TV and repeating the problem?’ Why don’t I cap it and move money to digital?’” he added. “Digital as a medium is easier to monitor, measure and perfect. Ultimately, everything will be digital in some way, shape or form.”

Kanwal also quizzed him about the growing relevance of AI in marketing. “Do you think that in the way marketing is evolving, that ultimate distribution comes down to artificial intelligence?”

Sorrell responded by saying that it will take some time. He also explained the distinction between artificial intelligence (AI) and artificial general intelligence (AGI), stating that AI is more mechanical and AGI is more sophisticated. 

He also agreed with Kanwal saying that one day a programme like ChatGPT can do the media planning and it would be very effective. 

Sorrell also weighed in on tech-dominated ad marketplaces that are calling the shots in advertising in recent years, especially in the age of Google and Meta and Twitter.

He also noted that Elon Musk should have stuck with a 10 per cent shareholding at Twitter, “because the upside is very little for him,” while commenting on the Tesla CEO’s struggle with advertisers. Sorrell also said that he’s “quite bullish” on India. “Two reasons, Modi has been an inspiring leader and has made brand India a greater force.”

The other reason for Sorrell’s optimism is concern about security around Taiwan and China. “India naturally benefits from this equation. It becomes the primary beneficiary of the redistribution of the supply chain.”