Instant Alert: Martin Sorrell says WPP will spend $5 billion with Google this year — and they're better to deal with than Facebook

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Martin Sorrell says WPP will spend $5 billion with Google this year — and they're better to deal with than Facebook

by Lara O'Reilly on Oct 31, 2016, 8:08 AM

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WPP will spend at least $5 billion (£4.1 billion) of its clients money on Google ads this year, the advertising agency holding company's CEO Sir Martin Sorrell said on its third-quarter earnings call on Monday.

That figure is up from $4 billion (£3.2 billion) WPP spent on behalf of its client across Google's properties in 2015.

Sorrell said the relationship with Google is "good," adding: "Google search and YouTube video continue to be very powerful mediums, particularly in high-penetration TV markets."

He said that some of the issues Google has had to deal with, regarding regulation and taxation in Europe in particularly, "probably made Google more responsive" in the way it works with advertising companies and takes their feedback on board.

"Maybe even the success of Facebook, in building out a video business and a mobile business, quote-unquote 'catching up with Google' probably makes Google a little bit more responsive [too]," Sorrell said.

As for Facebook — where WPP spent $1 billion (£830 million) in 2015 — the relationship isn't quite as good.

Sorrell said: "Facebook, I think because it has been so successful, is probably, to be blunt, a little bit more difficult to deal with. I think that's not a view we are alone in having. Others would too if you ask around. My view is that is going to change because they will see the benefit and the merit."

In terms of improvements, Sorrell said he'd like to see Facebook open up more access to its data in order to justify why advertisers should be increasing their mobile and video budgets and placing them on its platform.

Earlier on the call, Sorrell said of Facebook's data:

"Facebook puts great emphasis on outcomes and ROI [return on investment]. The data has to be independent data that justifies the position. Facebook has a very close arrangement with Nielsen ... something increasingly we are going to ensure that comScore [in which WPP has a near-20% stake] has that similar relationship with Facebook to provide alternate data because clients are investing now a lot of money."

He pointed out that Unilever CMO Keith Weed has called on digital media companies, including Facebook, to provide what he calls the "3Vs" — viewability, verification, and value — to prove they are being transparent about the success of ad campaigns on their platforms. Sorrell said: "And he's on [Facebook's client] council, saying you have to have better measurement!"

In Facebook's defense, Weed also publicly commended Facebook last year for striking a partnership with analytics firm Moat, which now acts as an independent third-party that measures its video ads. And in September this year, Facebook announced a set of new partnerships — including with Nielsen Catalina and Oracle Data Cloud — to add to the growing number of third-party measurement firms that work with the platform.

WPP beat analysts' expectations for its third quarter, with reported revenue jumping 23.4% to £3.61 billion ($4.7 billion) in the three months to the end of September, with the gains largely thanks to a weak pound. On a constant currency basis, revenues rose 7.6%.

The company said like-for-like revenue growth in the UK slowed to 2.1% in this quarter, compared to 3.5% in the second quarter — which it remarked could reflect "the first signs of Brexit anxiety."

SEE ALSO: The world's biggest advertising company spent a whopping $4 billion with Google last year — and $1 billion with Facebook


 
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