Ad Asia Lahore 2019: US-China rivalry a threat to advertising, other industries, says Sir Martin Sorrell
LAHORE: Sir Martin Sorrell, global digital media trailblazer, cautioned on Tuesday that the US-China trade rivalry could potentially pose a threat to advertising and other big industries; it might undermine economic recovery and slow down global economic growth in 2020 if the dispute lingered on.
He was in a conversation with Richard Quest, CNN’s foremost international business correspondent and host of Quest Means Business, at one of the sessions at the inaugural day of AdAsia Lahore 2019 conference.
The two experts, who are dubbed as the most forthright corporate speakers, shed light on the world business and digital media roadmap.
Martin Sorrell spelled out the global business and digital media roadmap, outlining importance of emerging communication tools and integrity of top industry leadership as key areas shaping up international commerce landscape.
Sir Martin Sorrell is founder of the world’s largest advertising group, WPP, which owns GroupM, J Walter Thompson, Ogilvy, Grey and Y&R. The WPP and Martin Sorrell have been synonymous for over three decades. Sir Martin Sorrell led WPP as the chief executive officer (CEO) for 33 years. He took on a million-pound company and transformed it into the world’s largest advertising and marketing services company, boasting revenues in excess of 15 billion pounds and a company strength of over 200,000 across 113 countries today. Sir Martin set up the S4 Capital in May 2018 just a month after quitting the WPP, the advertising group he founded three decades ago.
Conversing with him, CNN’s foremost international business correspondent and the most instantly recognised and hugely admired member of their team Richard Quest brought style and panache to the world of business broadcast. He not only covers the World Economic Forum at Davos every year, he’s quite literally the face of it.
Richard Quest said: “My new venture is aimed at really trying and developing what is being the new era model, as the media industry is changing. If you look at the growth of the media industry, the critical issue is that the top-line growth is not coming from traditional media.
“In the UK at the moment, the industry is growing about 6 or 7 per cent and digital is growing at about 15 to 20 per cent. Traditional media is not showing growth and similar trend can be witnessed in America, where in the first six months of this year, industries went up about six per cent, while the digital media was up 20 per cent. However, traditional was down three per cent. So digital media is not the future, but present of the industry.
“It’s important to understand that in the digital landscape, 225 billion dollar of 500 billion in media is in digital, last year. Of that 225 billion Google ad revenues were 125 billion, Facebook were 52 billion, Amazon as the best we can determine about 15 billion and growing fast.
“So in relation to the big three or the fearsome five if we throw Alibaba and TikTok, which is now running at about 7 billion and has surpassed as best as I can determine in terms of advertising revenues.”
In this scenario, he said: “It’s a fact that all industries have been challenged by business transformation or digital transformation by what Klaus Schwab would call the fourth Industrial Revolution. But this massive technological change has repercussions that go way beyond the economic realm and becomes a political issue. The fundamental reason is the fear of the working population about being displaced by the new technology, which would not create jobs but destroys them.”
To a question raised by Richard Quest about his new digital marketing venture S4 Capital, he said: “Interestingly what we’ve done at S4 is sort of coalesce, the private equity model with a listed company with a control share as well because I do believe controlled ownership is the critical issue like Rupert Murdoch, who would be much criticised over the years but he has been a phenomenally successful share owner.”
About where does S4 stand, Sir Martin said: “We firstly is purely digital firm as we are not interested in any traditional work. So S4 is totally about technology. I want to push on an open door and don’t want to push on a closed door.”
Talking about economic outlook, Sorrell said in 2020 we will see economic voice tighten as worldwide economic growth shrinks in view of the problem between the US and China. The fundamental problem is not accepting the rise of China. So it’s this tension between the two nations and trade war will drive down worldwide economic growth and, therefore, the pressure on the holding companies.
Responding to a question from the audience, Sir Martin said in countries like Pakistan, it’s actually a challenge how do we convince our businesses and our leaders and investors that even the digital is incredibly trackable; it’s incredibly effective.
Richard Quest’s animated speech in a later session mesmerised the audience. He threw light on leadership and how the core values of leadership do not change the core values of integrity, calling it a moral compass outlining qualities of integrity, compassion, forgiveness and responsibility. The most important among these qualities has been integrity which means doing the right thing without telling anybody.
He also mentioned campaign against Muslim travel ban when business leaders in the US have taken a stand against the government’s policy decision. Such initiatives reflect the idea of a true leadership. In today’s world where political leaders lack moral values, it is the business leader who’s going to be the moral leaders, having moral compasses because your employees are going to be the ones that you are looking after.
About the fake media, Quest hit hard the US government, especially Donald Trump, saying the fake media term was coined by him to target mainstream reputable media organisations. He regretted that foul-mouthed Trump had divided the American society in two parts.
Raymond So, chairman of the Asian Federation of Advertising Association (AFAA), said in a session that Lahore was a lacking in his life which had been filled with a visit to the city. He said Pakistan had been a mystery for him earlier, and he had only heard stories about it. But now he would never be able to forget the hospitality extended to him here and the delicious dishes of Lahore. He promised that AFAA would continue helping AdAsia in future as well.
At the end of session, Pakistan Advertising Association Chairman Waqar Haideri and Senior Vice Chairman Jawad Humayun presented a note of thanks to the guests.
Speaking at another session, Javed Jabbar said advertising is a mirror of the economy and culture of a country, as it flourishes in expanding the economy and comes under stress when the economy is down.
Appearing as the special speaker at AdAsia Lahore-2019, he said advertising was also the mirror of the culture of the country, exploited only by a few.
The event is being organised after 30 years in Pakistan and Lahore. In 1989, when the event first came to Pakistan, Jabbar was the chief organiser and Sarmad Ali, the current organiser, was a grooming young talent.
Javed Jabbar said that advertising had always been part of the media, but its paid contents depict the story of the sponsor. The other part of the media, he added, is the news content. He said both should remain separated but, unfortunately the advertising part had started influencing the news content. He said we should promote and appreciate creative advertisers.
AdAsia Lahore 2019 Chairman Sarmad Ali said Pakistanis are a resilient nation. “We do go down periodically to rise again. The advertising industry of Pakistan is also going through a lean period, but it has the same national spirit to rise again,” he added and praised the services of the late Mir Khalilur Rehman and Majid Nizami for the cause of the advertising industry. Similarly, he added, Mir Shakil-ur-Rahman and Hameed Haroon are rays of hope for the industry.
He said there were two Pakistans for foreigners. He said those who dared to visit the country were surprised to see a Pakistan that had no connection with the negative image of the country, created by the media. He said the perception of the country created by the media was far from reality. “About 70 per cent of the population of the country of 220 million comprises youths below the age of 30 years,” ha added.
Actors Fawad Khan and Atiqa Odho held an interesting talk on showbiz industry of Pakistan. Fawad said acting was not a bed of roses as one had to compromise his personal and family life in this field. He regretted that entertainment industry had become a liability in the country. He said the new media had facilitated people, but social media divided humans in two personalities mostly.
After the inauguration of the three-day AdAsia conference, the organisers distributed awards among various personalities over their outstanding work in the field of advertising. Khawar Masood Butt was awarded the AdAsia leadership award. Javed Jabbar was admitted into the AdAsia Hall of Fame. Sarmad Ali was bestowed with the Merit Award. Jonathan Chen also got the Merit Award. Tariq Rashid was conferred the Merit of Service Award.
The AdAsia Lahore conference would continue on Wednesday (today), the second day of the moot.