Sorrell warns of homogenous purpose campaigns, says COVID-19 is 'burning platform' for digital acceleration

Sir Martin Sorrell believes COVID-19 is the "burning platform" for digital acceleration, that it is becoming hard to distinguish between purpose campaigns, and that the US is in a "deeply disturbing" time, but will recover.

These are among the myriad topics covered during a live fireside chat with Campaign Asia-Pacific group director Atifa Silk during the Campaign Connect virtual conference Tuesday.

The S4 Capital boss—who believes his company to be more of a technology company than a traditional agency—spoke at great length about the acceleration of digital during COVID-19, and the adverse effect this will have on those unprepared for it.

He warned that those who delayed plans to implement digital transformation projects may be facing crunch time. And in usual form, he said that includes the 'big six' holding companies ("or five because Havas has disappeared into Vivendi")—which he suggested will either "get broken up, or go private".

"The existing structure cannot continue," he said. "They'd be better off going back to where they were when the cycle first started, let's say in the '70s and the '80s."

Echoing comments previously made to PRWeek, in which he argued that the old adage of brands ‘spending their way through a recession’ no longer applies, he said the current situation calls for a more "nuanced" approach.

"It's not like the dot-com bust, it's not like 9/11, it's not like the great financial crisis—it's most like war," Sorrell said. "And to suggest to clients when they're faced with an existential crisis that they should spend spend spend is, in my view, ridiculous. It has to be much more nuanced than this," he said.

Of the brands that are spending money on advertising, some are shifting to purpose, "quite rightly", but "even more" are increasing spend in online advertising.

"Online digital is accelerating at a prodigious rate, even in the teeth of this crisis," he said. "Consumers are educating their kids online. They're shopping online. They're communicating online. All the media, newspapers and magazines are going to shift their models to digital models. Free-to-air TV is going to have to shift to digital, deal with the streamers, the rise and rise of Netflix and Disney+. All of this means media is moving more to digital."

"COVID-19 is the burning platform for digital acceleration," he added. "It's going to happen faster and better and cheaper than you've ever seen before."

Citing a conversation he had with the ex-CMO of a major packaged goods company, he said in order to put over more effective, sales-oriented, measured messaging, "online digital is more effective because the CPMs have gone down extraordinarily—more probably than with traditional media—and performance-based metrics are even more important," he said.

Meanwhile, he warned of homogeneity in purpose-driven campaigns. According to the ex-CMO, "if you take away the logos, or the names of the companies from many of these campaigns, you can't tell which is which". 

"A lot of it is money spent almost exactly in the same way," he said.

His views contrasted with a later session, in which panelists including PHD's APAC CEO James Hawkins discussed the virtue of long-term brand-building in order to maintain brand affinity after a financial crisis recedes.

Elsewhere, Sorrell acknowledged that the US is facing a "deeply distressing time" as protests sweep the country following the death of George Floyd.

"The violence, the police brutality, is totally unacceptable...And this has caused a deep sense of outrage amongst, I would say, all the communities, and the reaction, including the violence and the looting that we've seen subsequently, by I believe, a minority, is also totally unacceptable. So we're in a really difficult time," he said.

Despite these "terrible events", coupled with the disruption caused by COVID-19, Sorrell said he remains optimistic the world is facing a 'V-shaped' recovery.

Catch the full session—plus insights from plenty of other executives, including top CMOs from Unilever, Mastercard, Burger King, Axa, DBS and agency leaders like Arthur Sadoun, Gary Vaynerchuk and more—by signing up here. All the Campaign Connect sessions are available after the fact on-demand.