Sir Martin Sorrell: I Want Zero Exposure To MarTech and AdTech

Sir Martin Sorrell is back at Cannes and has a glint in his eye and a spring in his step as he shows off his famous raconteur style speaking at a side event for global video marketing platform Innovid.

Speaking on a star-studded panel including global president of Accenture Interactive Operations Nikki Mendoca, Corporate VP, global media, CRM, digital merchandising, McDonald’s Bob Rupczynski and XANDR CEO Brian Lesser, Sir Martin left moderator, founder and CEO, LUMA Partners, Terence Kawaja, with precious little to do as he basically took control and started directing questions at his fellow panellists and offering his opinion on their various businesses and strategies.

Speaking on McDonald’s $300 million acquisition of AI startup Dynamic Yield, Sorrell offered his opinion that the move was one of the fast-food giant retaking control.

“I compare it to Brexit, and that might seem a strange analogy … it was the law of unexpected consequences … it’s not just in-housing, there’s a much broader trend here. Marketers, because of this threat for the control of data [from the platforms Facebook and Google], whether it’s brand safety, or the control of elections, whether it’s a fig leaf or genuine, this battle for control of the relationship.

With the rise of e-tailers [brands] thought it would make it easier to control the relationship with clients, well it’s made it more difficult. Facebook and Amazon are controlling more, and in it’s even China it’s worse, so I think it’s about taking back control.”

When Mendoca suggested it was a matter of building execution muscle and better connected expereinces, Sorrell offered her advice as well. He suggested that the trend to companies building in-house capability was a revenge ten years in the making since the recession of 2009.

“To be efficient is critically important, but in and of itself it’s not efficient, so we’re seeing a revenge.

“Take back control, innovation and branding. To be fair about it, you can have innovation without branding, but you can’t have branding without innovation; innovation is the key. And that got crushed a little bit, not a little bit in the ZBB [zero based budgeting] movement and that’s come off now and we’ll get to ZBB in a better form, because Lehmann and all the others that espoused it are very bright people and they will come back, but the balance is shifting.”

When XANDR’s Lessor discussed the impact of Netflix on television and the entire video market, Sir Martin could once again not help himself and started questioning him as well.

“Do you think Netflix is a sustainable model? With Disney coming in with Disney+ at half the price, do you think it’s sustainable at its current price? I know this is a terrible thing to suggest, but do you think they’re going to have to take advertising?”

Lessor’s answer was: “They will take advertising. What will happen is they will innovate and it won’t look like advertising . . .”

Sorrell then jumped back in and suggested “product placement is the vanguard of advertising”.

However he also offered a very clear insight into his investment strategy.

“I am very sensitive to having any exposure to adtech or martech. I don’t want to have anybody pull the plug on S4. In other words there’s three things when we’re looking at deals. Top line growth: critical. Decent margin, I don’t want top-line growth at the expense of margin, a balance of the two and thirdly, no adtech march exposure. We have to be agnostic. We will resell technology and the ecosystem is the ten companies; the big 5, plus Apple and Microsoft and the three technology companies Oracle, Saleforce and Adobe. Those are the ten that we’re focused on and that’s in our ecosystem.

“I don’t want to have any exposure to it. I am very nervous about being exposed to it.”

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Cannes 2019 innovid Sir Martin Sorell