• by Joe Mandese  @mp_joemandese, October 17, 2013

During a free-wheeling interview with 4As chief Nancy HIll, WPP founder-CEO Martin Sorrell talked about the logic (or lack thereof) of the proposed Publicis Omnicom merger, new Madison Avenue threats like “patent-trolling,” and how and why data is transforming the world of advertising services. Noting that WPP already is the most diversified agency holding company in terms of consumer data assets, Sorrell said it still is essentially a people business.

To put some round numbers around that, he estimated that WPP’s current “capital investment” in data is “about $450 million a year,” adding, “Our capital investment in people is $12 billion.”

While that statement shows how little Madison Avenue has changed from the days when Foote, Cone & Belding (now Interpublic’s DraftFCB) founder Fairfax Cone quipped, “the inventory goes down the elevator at night,” Sorrell noted that the new Madison Avenue requires new kinds of talent capable of performing in a more data-centric world.

“We’re not great data engineers, historically,” he conceded during the interview, which opened the 4As Data Summit in New York Wednesday. “We have to have different people. We need to invest more in technology.”

Sorrell cited two giant business services organizations -- management consultant McKinsey and investment banker Goldman Sachs -- as role models for recruiting and retaining the next generation of talent necessary for Madison Avenue to remain competitive, and he said big agency organizations have to emulate more of their methods, including recruiting aggressively from the best universities, and even shifting the agency “ethos” toward talent.

“[Their] ethos is up or out, while we’re not very good at either,” Sorrell said, adding, “Evaluating, assessing, and telling people where people are good or not, we’re not good at that 360-degree evaluation. You win a piece of business, you nick the talent from the competition.”

Sorrell even went so far as to characterize Madison Avenue’s approach to talent management as an “anti-intellectual thing,” suggesting the advertising world functions more by heart than mind.

One way WPP is getting around -- and innovating versus its competition -- in the area of data science is through acquisitions, including big investments in companies such as TNS, Kantar, etc., but Sorrell implied the other big agency holding companies -- especially arch rivals Publicis Omnicom -- don’t see all the smaller investments WPP has made in data-centric companies in which it holds less than a 20% stake.

During the interview, Sorrell took more potshots at the logic of the Publicis Omnicom merger, implying it was done more as a means to pad the pockets of their top managers than for the good of clients or even their agency organizations.

In terms of new threats to the agency word, Sorrell said WPP increasingly is concerned about the practice of "patent-trolling," which which entities acquire patents and wait for other companies to execute something they feel is in violation of their intellectual property mainly to sue them.

"We can't be responsible for patent-trolling being done by other people," he asserted.


Sorrell still takes the stairs.