It’s the Age of Google and Sorrell has no time – or money – for Twitter

April 29, 2013

Martin SorrellThe most interesting thing about WPP Group’s first quarter financial results were not the numbers, but its chief executive’s obiter dicta.

The numbers themselves were a curate’s egg. They beat the revenue forecast, bizarrely enough they delighted in Britain, but they disappointed in the United States. Which is just about the only part of the world economy currently showing signs of dynamism.

The obiter dicta, on the other hand, were curiously memorable. WPP CEO Sir Martin Sorrell used the occasion (well, near enough: he was actually speaking at the FT Digital Media Conference the previous day) to highlight a singular phenomenon. So far as his company is concerned (and it  is, after all, the number one spender of advertising money in the world), Google will soon become a bigger destination for his clients’ money than the biggest traditional media owner in his stable, News Corporation. Google is currently in receipt of $2bn of WPP’s quarterly spend; while NewsCorp gets about $2.5bn. But, given the Google figure represents a 25% increase year on year, it can only be a short time – Sorrell assures us – before the search giant moves into pole position.

I say “search giant”, but that of course is history. Sorrell’s underlying point is that Google – after some initial fumbling – has made the transition from a techie company, peopled by nerds, into a multi-media corporation with global reach. He calls it  “a five-legged stool”: there’s search (of course); display advertising; social media (google+); mobile (via Android and AdMob); and video through YouTube.

Note well where Sorrell places his chips, however. From an advertising point of view, the Age of Google (as he calls it) is primarily defined by video. YouTube has made big inroads into what traditionally would have been television viewing. He’s bullish about mobile, too: Android is now the most popular smartphone platform and in some developing markets, like China, it accounts for two-thirds of all mobile sales.

But social media: Oh dear, what an advertiser’s no-no! Yahoo, though generally lacklustre these days, garners about $400m of WPP spend. Facebook, infinitely more successful with its audience figures, receives only $270m. And Twitter a lot, lot less. What’s the logic? Well, Yahoo “gets” the commercial need for a five-legged strategy (indeed, TechCrunch speculates it is about to buy Dailymotion, a smaller competitor to YouTube). Whereas Facebook and Twitter do not. Facebook, Sorrell reckons, is important for brands – but in a negative sense – absence of criticism, which has little to do with any advertising content. Twitter, on the other hand, is simply a PR medium with almost no value to advertisers.

“It’s very effective word of mouth,” Sorrell told Harvard Business Review last month. “We did analyses of the Twitter feeds every day, and it’s very, very potent…I think because it’s limited in terms of number of characters, it reduces communication to superficialities and lacks depth.”

Maurice Levy, CEO of Publicis, speaks during the Reuters Global Media Summit in ParisThat last may sound a little harsh. And is certainly not a universally accepted view among admen. Significantly, it is not shared by Sorrell’s deadliest rival, Maurice Lévy – chief executive of Publicis Groupe. Lévy has just announced a four-year pact with Twitter which will involve PG’s media planning and buying arm Starcom MediaVest Group committing up to $600m of client money to monetizing Twitter’s audience. Details, at this point, are sketchy.  It is clear, however, we are not just talking “pop-ups” here. Lévy makes specific reference to video links and “new formats” yet to be developed. He admits to there being “some risk” involved in the project, though whether this relates to his own reputation, clients’ money or both is not apparent.

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Ryanair’s two-fingered salute to social media

February 2, 2013

Michael O'LearyI was amused to read that the incoming head of comms at Ryanair (forgive the oxymoron) has “deliberately” ruled out a social media strategy.

New boy Robin Kiely tells us – apparently without irony –  that such an initiative “would not be helpful” to Ryanair as “we would have so many people looking for a response.” A dedicated Facebook account, for instance, would probably mean “hiring two more people to sit on Facebook all day.”

Just two, Robin? Surely a legion would not be enough to handle the sycophantic email that would inundate your site.

As an after-thought, Kiely mentions that customers of Ryanair are, in any case, handsomely provided for by the budget airline’s “customer care line”. Has anyone ever managed to find a living being on the other end of this, without being connected to the ether for half an hour beforehand? Just checking.

Social media is, as you can imagine, heavily populated with accounts trading on the Ryanair brand, few of them complimentary. A quick trawl revealed an official PR Twitter account which has been dormant since August. By contrast, one altogether busier account, on Facebook, is that of the RyanairPilotGroup. It’s replete with commentary on Ryanair’s alleged infractions of European working regulations; tax evasion; and imminent strike action.

A bit worrying really, if these people really are Ryanair pilots…

You know what they say, Robin: journalists, like Nature, abhor a vacuum. If you’re not there, you’re not a player.


Cameron The Brand Slayer

January 25, 2013

BorgIf it weren’t for the fact David Cameron watches so little television, I would be forced to conclude he has been modelling his recent behaviour on Borg, the Viking Himbo now fronting Tesco’s advertising.

How else explain his assault on multinational brands in recent days – which has all the subtlety of Thor laying about him with his hammer after a particularly drunken binge?

Last week, it was Coca-Cola that got stomped all over, when Cameron told the House of Commons that he regarded it as his solemn paternal duty to prevent his children consuming “excessive” amounts of the sugary beverage.

This week he was at it again, telling the World Economic Forum in Davos that brands which avoided paying their fair share of corporation tax needed “to wake up and smell the coffee” – an unvarnished reference to Starbucks and those other egregious “tax dodgers” Amazon, eBay, Facebook, Google (and, er, Coca-Cola). And the tirade didn’t end there: so sick and tired is the British public of the multinationals’ fiscal chicanery that Cameron has decided to make clamping down on corporate tax-avoidance a central plank of our G8 Group presidency later this year.

Whoa, Dave. Is this your idea of a soft close? Britain shut for business before you oblige us to pull out of the EU?


Zombie epidemic infects adland

December 1, 2012

imagesI’m deeply indebted to the international Epica creative advertising awards – on which I served as a juror – for giving me nightmares. Every year, the awards betray certain cultural themes – performing dogs, hyper-animated babies, whatever – that have successfully invaded the collective unconscious of the creative community. This year, alas, it is Zombie Apocalypse, in which an epidemic number of the flesh-eating undead manage to bring society as we know it to its knees.

Here’s one particularly absurd example of the genre, which didn’t in fact make the prize-grade. It’s called “CPR makes you undead” and hails from the Heart and Stroke Foundation of Canada. Yes, you read right.  The premise? You’re a survivor in a post-Apolcalyptic landscape and you have a cardiac arrest – after, as it happens, catching sight of an army of hungry Zombies coming your way. Well, who wouldn’t? But wait, here’s the twist. The Zombie is your friend, the one who calls 911 for a (non-existent) ambulance and proceeds to carry out emergency resuscitation. After all, what use are you to a Zombie if you’re actually dead?

“Regardless of age, everyone can benefit from the lesson embedded in humor in the video,” H&SFC director of health promotion and public affairs Mark Holland tells us, “As zombies covet only the living, they need to move quickly to bring cardiac arrest victims back to life. We all should do the same.” He truly is having a laugh isn’t he? After watching this, you might prefer to be dead.

Have no fear, though: civilised society is fighting back with every manner of golf club, fishing rod, tennis racket and football that Norwegian sports equipment supplier XXL can furnish:

This commercial (my thanks to Messrs Stephen Foster and George Parker; I’m assured it’s a direct rip-off from Shaun of the Dead) has just been banned on Norwegian TV prime time after a Facebook campaign of vilification. Apparently, it’s “stupid and provocative”. Not to mention derogatory to the human rights of zombies. If they have any.

Most disturbing by far, however, is this gory viral for ZombiU – a survival horror video game which leans heavily upon the freeze-frame reveal technique used with such great effect by Philips’ “Carousel” Cannes winner a few years back. “ZombiU” won Ubisoft, which edited it, a gold in Epica’s Animation category. Arguably it’s most haunting element is the soundtrack…

Happy dreams everyone. And more on the other Epica winners anon.


Agencies pick over Ewanick’s GM legacy

July 30, 2012

“He failed to meet the expectations that the company has for its employees,” said General Motors spokesman Greg Martin cryptically. That looks like being GM global marketing supremo Joel Ewanick’s epitaph. The marketing whirligig quit abruptly last weekend, after two years at the steering wheel of one of the world’s biggest car companies.

But just what did Martin mean by failed expectations? It appears that Ewanick fell down badly on the small print in the 5-year sponsorship deal he signed with Manchester United. Details remain sketchy, although they will undoubtedly emerge over time. Some financial liability is likely involved should GM fail to deliver on its side of the bargain; this seems to be what Ewanick ‘forgot’ to disclose to his superiors.

GM may be glad to see the back of him, but we hacks will miss Ewanick – with his uncanny ability to manufacture a headline. Here is the man who said ‘No’ to extortionate prime-time Super Bowl advertising; and put two-fingers up to Facebook – commercially speaking – just before it foundered in a very rocky public flotation. The Manchester United sponsorship was to be his masterly counter-coup: Ewanick bringing in the vibrant Old World (China and emerging markets included) to redress a marketing overspend in the tired old New.

Alas, attention to detail seems foreign to Ewanick’s nature. Now we shall never really know whether he was a marketing visionary with a bold grasp of the Big Picture, or simply a publicity-hungry megalomaniac revelling in world-renown.

What matters from here on in is the unpicking of Ewanick’s legacy. Hundreds of millions of dollars of revenue are at stake for the agencies that signed up to the Ewanick dream. Doubtless their lawyers are already assessing the strength of the contracts they co-signed with him. What now for Carat’s tenure of the $3bn global media account? And for Commonwealth, the complex advertising vehicle set up so that Goodby Silverstein and McCann Erickson could jointly service most of the global Chevy creative account? The holding companies of all three agencies – Aegis Group, Omnicom and Interpublic – have already made substantial investments in staffing up in and around Detroit to service the newly streamlined accounts.

Advertising relationships in the auto-industry have traditionally been very personality-driven. Despite a thick coating of metrics-speak in all their public utterances, this has been transcendentally true of Ewanick and his advertising coterie.

Goodby looks particularly vulnerable, given the close personal relationship between Ewanick and Goodby founder Jeff Goodby – who shared the stage at this year’s Cannes International Festival of Creativity.

All eyes will now be on Ewanick’s (at least temporary) successor, Alan Batey, head of US sales and service.

Little is known of him other than that he was once a car mechanic. But of one thing you can be certain. Agencies, on and off the GM roster, will be doing their damnedest to find out more. Just in case.

UPDATE 31/7/12: The problem with the Manchester United shirt sponsorship deal is that Ewanick paid too much, it has emerged. He committed to a 7-year deal at £25m ($39m) a year without disclosing how “full” the terms were to GM’s board. $300m represents a premium of 25% to what the current sponsor, AON, is paying – and is a lot more than Ewanick seems to have implied to his colleagues during negotiation.


Social media explained – with the help of some dubious statistical illustrations

May 28, 2012

If only the maximum character count were 200, 90 million Germans could finish a sentence on Twitter… Already, 150 children have been given a first name starting with @…. 27% of Facebook server capacity is taken up storing “LOL”… The second biggest lie after ‘I love you, too’ is: ‘You have been successfully unsubscribed from our database’.

These and numerous other imperishable social media factoids are to be found on a video made for satire site The Poke. It purports to be a parody of a promotional video for Erik Qualman’s book, Socialnomics, though the parallel is light and the irony heavy:

My thanks to George Parker, at Adscam, for that. And here’s the video Technology Will Kill, for Qualman’s latest:

What will The Poke do with this I wonder?


Forget General Motors – Nielsen’s online currency metric will bail out Facebook

May 22, 2012

With Facebook’s share price in an 11% freefall (when I last looked), thank goodness for OCR. That’s what I say. And maybe it’s the mantra nervous Facebook investors should be chanting, too.

OCR? No not Optical Character Recognition, silly – Online Campaign Ratings. It’s the new Nielsen media metric with which the research giant hopes to corner the elusive online ‘currency’ market. And it’s being backed by one of the ad industry’s biggest traders, WPP’s GroupM – which is a good start if OCR is to gain credibility.

Acquiring a universally accepted trading ‘currency’ – sometimes referred to as a “gold standard” – is an important breakthrough for a new medium. No matter how fast it has been growing, or how trendy it has become, its effectiveness will be (rightly) disputed by advertisers and media traders alike in the absence of any agreed benchmark. The result being a tethered and volatile ratecard.

It might seem a fine distinction, but there is a world of difference between what we have at the moment – which is a medium whose value is defined by analytics – and one which is regulated by currency. Analytics are proprietary: they do not command universal respect and are therefore open to debate. The finer points of currency may certainly be subject to academic criticism (look at the BARB ratings system governing UK commercial TV) but no advertiser or trader seriously questions its status. If they did, we might have a pocket version of the euro-crisis on our hands.

With a currency in place, a behavioural change takes place in trading. The key word is “guarantee”. In the network TV market, for example, all three elements to the media deal – media owner, advertiser and trader – have sufficient confidence in the system to make “upfront” or forward commitments into the future, usually a year ahead. The guarantee is the delivery of a specific kind of  audience in sufficient numbers; failing which, a financial penalty will be imposed on the media owner and, increasingly, on the trader.

In that sense, AOL’s recent decision to offer guarantees on online advertising delivery, covering certain agreed demographics such as age, gender and social type, was highly significant.

As is GroupM’s proposal to make joint TV-digital “upfront” buys, the plan being to compensate any shortfall on the TV-side with OCR-defined ratings acquired from digital platforms.

So what has all this got to do with the Facebook share price? With over 900 million registered users, among them half the population of America, Facebook forms the backbone of the online display advertising market. No advertiser can easily afford to leave it off the schedule. Dean Evans, chief marketing officer of Subaru of America, is typical in his attitude: “If half the US population is on Facebook, you have to work it to learn it.” Hence Nielsen’s decision to make Facebook data its OCR “tentpole”.

But what if one of the world’s biggest advertisers defies the orthodoxy, and pulls out of Facebook display – what then? There’s no doubt that General Motors’ announcement last week has had a profoundly destabilising effect on Facebook, all the more so as it came shortly before the much-hyped market flotation.

Actually, GM spends very little of its advertising budget on Facebook display: about $10m a year out of an estimated $3bn. Indeed, it spends more on its Facebook pages ($30m a year in content provision), to which it says it is still firmly committed. But that’s not the point. What if other advertisers, taking GM’s lead, start a Gadarene rush to the Facebook exit? GM’s announcement has, in a nutshell, reinforced a growing conviction within the investment community that the Facebook IPO is “Muppets’ bait” (to use Business Insider founder Henry Blodget’s singular phrase).

In point of fact, many fellow advertisers (particularly those in the auto industry) see GM’s surprise move as motivated less by an ideological stance on Facebook display ratings than by its global chief marketing officer’s desperate determination to wring $2bn out of marketing costs over 5 years. Joel Ewanick (for it is he) has a well-attuned eye for catchy headlines, and few could have been more catchy – as the lengthy piece in the Wall Street Journal clearly demonstrated – than his bombshell last week before the IPO.

But now that the second shoe has dropped, we have a better idea of what Ewanick is up to. He has just announced (to his favourite journalists at the WSJ again) – and presumably at his new media agency Carat’s behest – that the Super Bowl is way too expensive as well, and he won’t be participating in that either. Some doubt that he means exactly what he says. They believe he will only pass on the Super Bowl in the sense that Nike passes on the World Cup. But let’s put that aside for now. Taken at face value, what Ewanick is telling us is that neither Facebook nor the Super Bowl sell enough GM vehicles, because they are both massively overpriced.

That may well be trivially true. But display advertising has never been simply about shifting metal (or any other branded product for that matter). It’s also about maintaining and propagating your image. The question for Ewanick is not whether he can afford to skip Facebook and the Super Bowl, but for how long.


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