Sorrell questions rush to social media

Sir Martin Sorrell, chief executive of WPP, the world’s largest marketing and communications group, has questioned advertisers’ rush into social media, citing concerns about Facebook’s handling of personal privacy.

Sites such as Facebook, which now has more than 400m users, are trying to attract brand advertising from consumer goods companies who have traditionally held back from online marketing. Pepsi redirected its advertising budget for the Super Bowl online for the first time last month.

But Sir Martin warned on Tuesday that social media sites are ”less commercial phenomena, they are more personal phenomena”, more similar to ”writing letters to our mothers” than watching television.


”Invading these [social] media with commercial messages might not be the right thing,” Sir Martin told delegates at the Financial Times Digital Media and Broadcasting Conference in central London.

This would make Facebook and other social media more of an opportunity for public relations agencies – a smaller part of WPP’s empire – than traditional advertising.

Sir Martin said that the combination of Mark Zuckerberg, Facebook’s co-founder, and Sheryl Sandberg, the ex-Google executive who is the site’s operating chief, was ”professionally and commercially extremely strong”. But more than once, Facebook has ”screwed up royally” on privacy by trying to introduce intrusive advertising systems such as its aborted Beacon service.

”My view is that [privacy] is still a social norm,” Sir Martin said. ”People are still concerned about it and the invasion of it.”

Privacy concerns are already attracting regulatory scrutiny in Europe and the US.

”As an industry, we can either self-regulate or risk having it regulated for us,” Sir Martin added.

Along with many in the advertising industry, Sir Martin has welcomed the investigation of Google’s online advertising system and search rankings by the European Commission, although WPP has not complained to Brussels itself.

”Google is a much more dangerous company as a competitor than it was 12 months ago,” he said. ”They are much slimmer. They are more focused on search and more focused on mobile search.”

While WPP, whose JWT agency worked on the launch of Microsoft’s Bing search service, would like to see more balance in the search market, Sir Martin added: ”Smaller companies are more likely to sing out about this than bigger companies.”

He also urged clients to address the ”disconnect” in the proportion of time consumers spend online and the share of advertising budgets dedicated to the web, blaming executives’ ”conservatism”.

WPP, like other agency groups, is relying on growth from digital platforms and faster-growing economies such as China to counterbalance falling revenues from traditional media and developed markets, particularly in western Europe.

WPP reports its 2009 full-year results on Friday.