BARCELONA — The boss of the world’s largest ad agency holding group has come out fighting against back-handers and kick-backs that are rapidly becoming a stain on the advertising industry – and which could ultimately hurt it.
“There are some things going on in the industry which are just unacceptable in my view, in terms of competitive behaviour,” WPP CEO Sir Martin Sorrell tells Beet.TV, in this video interview during Mobile World Congress.
“For example, we won one contract, a substantial contract – the defending agency offering signing-on inducements to the client to sign on again, giving unattainable cash guarantees on media pricing. It makes no sense, it’s suicidal.”
In the last couple of years, murmurs and grumblings have echoed around the ad industry at practices like the kind Sorrell is talking about – but few executives have gone on public record in opposition, for fear of biting the hands that feed them.
Then, last year, the Association of National Advertisers (ANA) published a report lifting the lid on widespread rebates and other non-transparent dealings, finding “evidence of fundamental disconnect in the advertising industry regarding the basic nature of the advertiser-agency relationship”.
The report has caused shockwaves, pushing a new clamour for transparency that looks like being 2017’s watchword.
Sorrell appears deeply worried. “I would say, our industry has to watch itself,” he tells Beet.TV. “There are some really crazy things being done. That can’t do anybody any good in the end. It’s short-termism gone crazy.”
To him, it’s a kind of industrial self-destruct, precipitated by the irresponsibility of peers and rivals in the business.
“I remember speaking to Arun Sarin, who used to run Vodafone many years ago,” Sorrell recalls. “I said, ‘What’s the thing that most worries you?’ He said, ‘The acts of irrational competitors’. You’re only as strong as your weakest competitor.”
This video was produced in Barcelona at Mobile World Congress 2017. The series is sponsored by Turner. Please visit this page for additional segments from MWC.