Frankly Speaking: Martin Sorrell predicts end of major media holding companies, says model no longer working

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  • Middle East not exempt, as renowned adman specifically calls out WPP, IPG, Omnicom, Dentsu, and Publicis Groupe
  • Sorrell reiterates that, after Beirut and Dubai, Riyadh will be region's new advertising capital

LONDON: One of the most prominent figures in the advertising industry worldwide has warned of the end of the media holding companies model, which has been dominant for decades.

In an interview with Arab News, Sir Martin Sorrell also highlighted that Middle East affiliates of these groups were far from exempt.

鈥淲ell, there are four (five) big holding companies, which I think dominate actually in a Middle Eastern context, the market, at least currently. I don鈥檛 think that will be the case in the future,鈥� he told the "Frankly Speaking" presenter Katie Jensen.

鈥淭hose would be IPG, that would be Omnicom. You鈥檇 probably have to include Dentsu in there, as well as WPP and Publicis.鈥�

Sorrell is renowned for being one of the founders of advertising giant WPP and, under him, many believe it to have lived its heyday. He was the company's longest-serving CEO from 1985 to 2018 before abruptly leaving due to claims of misconduct.

Asked if his anti-holding company comments were directed specifically at WPP, and whether it was a matter of a personal vendetta, he said one only had to look at their numbers.

鈥淚 think, just look at the facts,鈥� he said. 鈥淛ust look at the stock market performance against the indices. And in fact, it鈥檚 clear for all to see if you look at the performance over the last four or five years."

 

 

As for why media holding companies would not work, he said the reason was the market was 鈥渟omewhat suspicious of the long-term structural performance of their models.鈥�

鈥淚 think that what the stock market is signaling in relation to holding companies is a general suspicion, a structural suspicion about their longevity.鈥�

Currently, these groups operated with several major subsidiaries that Sorrell claimed 鈥渄on鈥檛 work well together.鈥�

鈥淭hey鈥檝e made them more complicated because they鈥檙e more vertically driven and the verticals don鈥檛 work together to solve problems for clients, or to provide solutions for clients,鈥� he added. 鈥淔rom a personal point of view, I think probably a breakup of those companies will probably be the best response.鈥�

Sorrell currently runs the London-based S4 Capital, a new-age digital advertising agency, and has recently opened an office in 萝莉视频 where he serves major clients such as NEOM and Qiddiya.

鈥淭he scale of resources and the commitment is so great, and the quality of the resources are so significant, that I think they will be successful in the longer run,鈥� Sorrell said about 萝莉视频鈥檚 reform push as it continues with Crown Prince Mohammed bin Salman鈥檚 Vision 2030.

鈥淪o I think it鈥檚 a question of educating the world to the nature of the projects, the nature of the ambition.鈥�

Sorrell reiterated what he said in a 2021 Arab News interview, that he believed Riyadh would be the next advertising capital of the region, a title which has exchanged hands from Beirut to Dubai before finally ending in the Kingdom.

Sorrell is a big believer in growing local talent, as opposed to relying on imported expatriates, and he said he was trying to achieve this in his Saudi operations.

鈥淥ne has to develop national talent. But, of course, given the pace of development that鈥檚 being contemplated and the very ambitious goals that the government wishes to achieve, it probably has to be done by a mixture,鈥� he said.

鈥淲e鈥檙e putting in place a judicious mixture of talent from outside the region and inside the region.鈥�