CANNES – Sir Martin Sorrell says marketers are changing their attitudes toward programmatic media buying at the same time as the growth of alternative content continues unabated. In this interview with Beet.TV, he also talks about WPP’s investments in content producers and how advertising “in one form or other” is seeping into Netflix.
In the aftermath of the television UpFront season, Sorrell thinks traditional networks have done pretty well price-wise. ““I think they’re quite bullish about the UpFronts in the U.S. They’re seeing reasonably significant prices increases in the mid single-digit area at a time when we’re seeing deflation elsewhere,” says Sorrell, who is Founder & CEO of WPP. “So I think owners of the inventory feel pretty good about it.”
He then cites “obviously broader and much more significant opportunities” for advertisers in the programmatic space. It’s an area where WPP has made significant investments in its Xaxis unit and [m]PLATFORM technology.
“We’re offering something a little bit more than programmatic as it overlays brings in data and technology inputs, which make it far more sophisticated in terms of targeting,” Sorrell says.
Clients that had been concerned about some aspects of programmatic buying are thinking differently, he adds.
“We are seeing I think the start of a groundswell of change in attitude toward programmatic,” Sorrell says, citing marketers’ in-house operations “perhaps becoming less attractive” for reasons that include the need to keep updating the technology.
Turning his attention to newer content providers like Amazon he notes, “The amount of money that these companies are willing to invest in content is quite considerable.”
He says it’s not uncommon for Amazon to spend $10 million on one, hour-long episode, “Netflix maybe $7 million and the more traditional producers spending about three.”
As for whether Netflix, which according to Sorrell loses money on a cash flow basis, can ever turn that around, the answer will lie in its subscription and advertising policies. “In a way Netflix is already advertising, it has product placement warnings in front of some of its series already. So we are starting to see advertising in one form or other start to invade the Netflix platform.”
Companies like WPP, which traditionally had concentrated their investments outside of the content creation sector, have changed their thinking and are ramping up on the sell-side. Sorrell points to investments in Vice Media, Refinery29, 88rising and Mic as examples of his company’s need to experiment “to see how we can learn more and how are clients can be involved in it.”
This video is from The New TV Ecosystem Forum at Cannes Lions 2017, presented by FreeWheel. For more from the series, please visit this page.