Digital spends will be up by 57.5% by 2022: Sir Martin Sorrell
As part of the Masters Speak initiative by Future Generali India Life Insurance, Anant Rangaswamy, Editor, Melt and Wion TV, engaged Sir Martin Sorrell, Executive Chairman, S4 Capital, in a discussion on ‘COVID-19 - The Digital Accelerator’. The idea of Masters Speak comes from one of Future Generali’s core values – “Live The Community”.
People across the board have been anxious about the future with the COVID-19 pandemic in full swing. People have been worried about fate of businesses, healthcare and life in general. Masters Speak is an effort by Future Generali to help partners and communities at large find the answers to a better tomorrow. This series is focused on deriving insights from professionals and industry leaders to get these answers and help transform the lives of people.
In this discussion, Sir Martin Sorrell focused on the impact of COVID-19 on advertising and marketing services and how digital transformation can drive growth in the post COVID-19 world.
Transfer yourself to 24th 2021 and tell me what is the marketer doing today?
I think Q2 of 2020 is the bottom. In our own case, April was the weakest month so far of 2020. In January, we were up by 33%, 21% in February, 6% in March and 3% in April. In May, we did significantly better.
I think Q3 will be relatively better than Q2 and Q4 will be relatively better than Q3.
By this time next year, things will not return to normal because it will never be normal at least for a significant amount of time and there will be a new normal.
Thee times are closer to the War time than to the great financial slump or oil price bust that we’ve seen before.
People are leveraging digital more than ever. They are buying online. Facebook has invested in Jio, which will further drive digital transformation. Healthcare, financial actions, education – everything is done online now. Media owners are driving their digital transformation from traditional media. People like Rupert Murdoch are moving to digital models not only with an advertising base, but also subscription based models behind paywalls.
Streamers are further attacking free to air TV. A market like India, which is still dominated by newspapers, magazines and free to air television, will change significantly.
By this time next year, we will be in the new normal which will be dominated by digital. FT ran a story that digital is going to be more than 50% of the media spends worldwide this year. For the first time, digital will be more than half the market. We predict that by 2022, digital spends will be up by 57.5%. People will be spending more on digital and less on traditional media this time next year.
How does the marketer retool himself in these times?
It’s a new model. S4 is purely digital and the key is that we build the model around first part data. The data derived from consumers, which facilitates personalisation at scale according to the behaviour of the user. With Netflix, who we work with, we create almost 1.5 million executions. This data is pumped out programmatically after which we measure the response. It’s a big idea driving creative at scale driven and refined by data. The thought that data destroys creativity is nonsense and it, in fact, refines creativity. It helps make creativity more efficient.
The traditional enterprises that, from a share point of view, dominate the old industry, still don’t understand the massive change that has taken place and when they do, they find it difficult to adapt because they have the weight of the traditional process. You see this in every industry. How do you compete with a Tesla, which focuses on electric vehicles which is clearly the future, and at the same time adapt and focus on gasoline vehicles.
Tell us about the change in business from the marketers’ side. Do you think they will be able to adapt to the changes with the speed you suggest they have to?
If there was one thing that I had to point out was positive about COVID-19 is that it has disrupted the digital transformation. All bets are off. We have seen a change in the attitude of several clients towards digital transformation to be faster, better and cheaper. Speed is about agility. Every analog company that is trying to digitally transform is anxious to be agile and faster.
All CMOs, CFOs and CTOs of these companies are razor keen to shift as quickly as possible. I think COVID-19 has driven these companies to change faster. People have nothing to lose now, because Q2 has been that bad. The desire to change has gone up.
Catch the complete conversation here: https://www.facebook.com/futuregeneralilife/videos/704994356962265/
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