WPP CEO Martin Sorrel: It’s Latin America’s Time
My previous chief Martin Sorrell, CEO of power network WPP is not impressed by political tensions in Argentina or economic setbacks in Brazil. It’s Latin America’s time he stated.
In 27 years, Sorrell has not only built the world’s largest advertising network. Becoming 68 on 14 February (Valentine’s Day), he does not want to talk about retirement. He’s seeing opportunities to extend in Latin America.
In 2007 WPP acquired 3 of my companies, and I have had the pleasure to meet him plenty of times. So I can assure you: Sorrell is always putting his money where his mouth is.
Digital and technology is his main focus, and he’s always keeping his eyes on the prize: Economic affairs and emerging markets.
In a recent move, WPP has invested $70 million in Buenos Aires-based information technology services company Globant, in exchange for a 20% ownership stake.
“This is Latin America’s time,” Sorrell stated. And WPP that also acquired AKQA in 2012, has already acquired Chilean, Mexican and Brazilian agencies over the last two years, including F.biz and Gringo.
WPP’s new investment in Globant gives it increased access to social and gaming technology development, a focus of the Argentine start-up and an area the company has been aggressively chasing.
“We’re not in the business of creating technology,” but applying it more to our clients, Sorrell said.
Based on forecasts, spending in Latin America is estimated to increase by 10% in 2013, to $41.78 billion. That compares with a projected growth rate globally of just 4.11%.
The WPP investment values Globant at about $350 million, according to Mr. Sorrell. Globant, which was founded by four Argentines in 2003 with $5,000, said its revenue in the first half of 2012 was $57 million. Clients include Google and several WPP companies.
Globant has also bought four smaller companies, including the Brazilian technology company Terra Forum last year. Globant has also influenced Argentina’s nascent start-up scene.
WPP will keep investing in Latam and Mexico in 2013. And they should. Digital, social and mobile are growing extremely fast in Latin America and also the BRIC markets could be a focus for WPP.
Most marketers around the globe have embraced social media, but they failed to integrate it. Organizing social media in an integrated way seems to be very difficult for brands.
The same goes for Creative, Social, PR, Media agencies and consultancy firms, which are all offering shattered social services to their clients.
Their lack of big-data analyses does not get their clients the highest ROI on their media investments by using a smart mix of POE. That is step one towards an integrated social approach. WPP has certainly taken steps on big-data.
And by sticking to fragmented insights, step two towards an integrated social approach will keep failing at many brands as well.
Brands that want to take the next step towards becoming “social by design” aka a true social business, will need to think beyond campaigns or channels and will need to move from reaching people to building mutual beneficial relationships between people and their brands.
The relevant question to CMOs at leading global brands for 2013 and beyond is: Who is best positioned to help brands take steps 1 and 2 above? Fragmented specialist agencies or global networks like WPP?
My vision is clear: Global networks like WPP offer the research, insights, tools, technologies and global integrated power and scale that fragmented players simply cannot afford and offer.
What About You?
What technology companies or markets would you invest in? And more important, why? I’d love to read your opinion in the comments below.
About the Author
Igor Beuker was CMO at 3 listed companies, chairman at the IAB, jury member at Webby, AMMA and Esprix awards, founder of 3 agencies (sold to WPP) and global chief social officer at Mindshare. Now he is ‘freejack’ consultant and a sought after keynote speaker.