WPP’s CEO Sir Martin Sorrell expects growth in digital ad spend to slow over the next few years as concerns over viewability, ad fraud and measurement impact budgets.
Speaking on the company’s earnings call this morning (24 August), Sorrell said brands are increasingly questioning their digital ad spend. He cited the example of Procter & Gamble, which is planning to cut investment in targeted Facebook advertising after admitting it went too far.
He explained: “What has really been happening is questioning digital growth. One of our major clients has talked about investment in Facebook and reducing that, not overall but investment on particular areas of activity.
“We have seen this before in arguments about viewability, ad fraud and measurement issues, not forgetting ad blocking. That is where the debate is.”
“Some clients are looking at whether they have over-invested in some new media alternatives.”
Sir Martin Sorrell, CEO, WPP
This has come, Sorrell said, because chief financial officers, procurement officers and media auditors are all increasingly asking for better metrics on the effectiveness of digital. He said digital now makes up on average 30% of brands’ budgets but for spend to increase further the likes of Google and Facebook will need to provide better measurement tools.
“We and our competitors want better measurement, not just offline but online too. The answer is not Facebook or Google data, we can’t have the players being the referees. There has to be independence in terms of measurement, that is a critical issue,” he added.
He also believes marketing trade bodies should be holding Google and Facebook to account. Sorrell said that although the ANA has investigated media transparency, it is not looking into issues such as Google changing its algorithm or Facebook altering what content appears in people’s news feeds.
“We hear [traditional] media owners complaining quite bitterly that [Google’s] algorithm changed and no one could explain why and how, yet this is the transparency era,” he commented.
Sir Martin Sorrell will be opening the Festival of Marketing, which is running on the 5 and 6 October at Tobacco Dock, London. For more information about the event, including how to book tickets, click here.