Traditional media and the Internet

WPP's Martin Sorrell gave a speech at the IAB recently where he is quoted as saying "I think there's a certain amount of panic among media owners ... . Most of these companies, ours included I suppose, are run by 50- or 60-year-olds who have trouble getting it, and who really don't want to see change on their watch".

Many people have seized on these words as an opportunity to bang the usual old-media-is-dead drum, as part of the fashion for criticizing established companies. That is facile commentary, predictable and wrong. It is pretty obvious that this is the kind of speech you need to hear for yourself, rather than rely on a few sentences taken out of context by Reuters. Fortunately, PaidContent did this, and point to the speech here.

Some comments about WPP and Martin Sorrell:

• Sorrell is not a fool walking around wondering what this Internet thing is. All those people who remarked on his disarming honesty and his shocking confession, please calm down - this man is king in a world that is all about messaging and manipulating what you think. Watch the video - he starts (at a conference where Bill Gates is also speaking, so no lightweight event this), by claiming that he ditched his original speech in the taxi and will just improvise. He claims he is just "programmed" by others to give boring speeches at conferences, as if he was some helpless spokesperson for invisible speechwriters. And he makes a joke of how wittily deceptive he can be, right through the first five minutes.
• Just before giving his speech, Sorrell had spent two weeks in Asia (of course, he spends a lot more time there than two weeks - WPP has around 20 companies in South Korea and around 30 in Japan). That means exposure to a market so advanced that most internet pundits in "the west" (including myself) cannot really understand it. Naver's Knowledge Search, Asian-scale MMORPGs, keitai culture - these things are a generation beyond anything we see day to day.
• If there is one thing (other than manipulating people) that you have to be good at in advertising, it is keeping up with rapidly changing fashions. Don't think that WPP will be unable to adapt. All analysis of how the internet will cause WPP's demise assumes that WPP will sit around doing nothing for the next ten years.
• There is a lot of blog commentary about people like Sorrell who "get it" or "don't get it", especially because Sorrell himself suggests he does not understand the internet (sure, sweet little old WPP doesn't understand an advertising platform ...). It is too early to say that WPP has lost in the online world, especially when everyone who writes off WPP happens to be playing in a much lower league. Nor is "getting" the internet the only priority. Battelle, Beattie, Scoble all get it but I am sure would be daunted by the prospect of running WPP.
• WPP does have a number of companies devoted to the internet. None of them top-notch, but it shows that the company is aware of the internet: Center Partners, EWA Bespoke Communications, Hill & Knowlton Netcoms, Outrider, Qi, Syzygy.
• Sorrell and Murdoch have their own relationship, perhaps similar to that of Wenger and Mourinho. Sorrell has spoken before about the rising cost of television advertising in the face of decreasing audience size.
• One of WPP's aims in general is to sell more consultancy work, for which it helps to create fear and uncertainty if people are going to hire you. In fact, Sorrell did joke that Murdoch must have been close to panic because he, Murdoch, was thinking of hiring McKinsey.

Onward. According to Reuters, Sorrell "singled out the recent Internet acquisition spree by Rupert Murdoch's media conglomerate as one sign that media conglomerates are scrambling to catch up, saying News Corp has been making Internet acquisitions 'almost willy-nilly'". So, some comments on Murdoch:

• Sorrell probably has no idea why Murdoch has made his acquisitions, so it is too early to suggest that they are willy-nilly. Even if they are, willy-nilly acquisitions are not an old-media preserve. eBay bought Skype, either a pointless acquisition or a shudderingly expensive one, most likely both. Google bought a company that helped law firms set up websites and no one knows to what purpose.
• Murdoch is also far from an internet know-nothing. The fact that he is old is irrelevant. Even without MySpace, News Corp online has more monthly visitors than Walmart, MySpace, Comcast, Monster, Earthlink or Wikipedia. In the UK, News Corp has more unique visitors each month than Expedia, Lastminute.com, Wikipedia, Tiscali or Tesco. Not forgetting the stake in BSkyB, the most successful interactive digital television company in the world. And now Murdoch owns the biggest source of internet page views in the US that could be bought (i.e. outside the likes of Google and Yahoo).

So enough about how Sorrell and Murdoch are dinosaurs.