Recently, I caught a fascinating interview with Sir Martin Sorrell, CEO of multinational advertising and public relations giant WPP, on the rising media platform Cheddar. Jon Steinberg, former president of BuzzFeed and founder of Cheddar, was getting a read on the state of digital advertising and the performance of WPP moving forward, as it downgraded its projected growth for the third time this year.
Sorrell didn't blame Google or Facebook for cutting growth forecasts for WPP; he actually embraced them by saying Google and Facebook were his company's biggest media partners.
But he also said that because of the duopoly of Google and Facebook -- together they account for 75 percent of digital advertising -- clients want Snapchat, Pinterest, and other alternative media platforms to succeed. And it's not just his clients; people in general seem to be open to social trends and want to check out other options.
For example, just last week I was at the EY Strategic Growth Forum, where MeWe's CEO, Mark Weinstein, was one of the speakers. He talked about online security, privacy, and the annoyance of certain ads, and attendees reacted really positively. You can tell there's almost a distrust forming between audiences and these two powerhouses, and people are looking for other platforms to rise.
One thing Sorrell said in his interview that I couldn't agree with is the effect that smaller firms and consultants are having on the growth of WPP. I can speak for Influence & Co., and we are consistently getting business from the larger agency conglomerates.
There are still traditional models in place with traditional pricing, and up-and-coming companies have to be eating into the growth of these businesses. Technology has closed the advantage that the larger players had in the past, and when smaller firms come in with less overhead and greater agility, that can help them compete with these giants.
Sorrell is right, however, in saying that there's been a transformation of advertising and digital marketing that could have affected short-term challenges and opportunities -- but it won't stop brands from having to invest in innovation and marketing. In fact, when you cut or roll back your investment in branding and innovation, you end up hurting your sales in the long run.
Facebook's Monetization of Messenger
As I was catching the Sorrell interview, I also caught another Steinberg interview on Cheddar with David Marcus, VP of messaging products at Facebook, where he talks about Facebook's plan to monetize Messenger. More than half of people across all demographics (about 64 percent, in fact) now prefer messaging to talking on the phone or even emailing for brand communication, and Messenger is planning to monetize through advertising to the 1.3 billion people using the platform.
One of the questions Steinberg asked was if Messenger was going to become the new Facebook in that users can have pretty much everything all in one place. While Marcus said Messenger was different from the WeChat platform in China, for example, he also mentioned that communication between brands and people within Messenger is so much simpler and more streamlined than ways you might communicate outside the platform.
The two discussed an example of having airline issues and being able to get your problem resolved over Messenger within minutes rather than the long wait on the phone that many of us have experienced in the past.
One new feature is businesses' ability to add Messenger on their websites and continue the chat even after someone leaves the site. This is a trend I'm seeing that shows companies are moving toward the platforms where they can have the most comfortable conversation for their customers. Even five years ago, I would never have thought that this was even a possibility, but in this example, Facebook is giving companies a way to continue to develop powerful relationships beyond the site.
If these are the types of conversations that make sense to have in Messenger, then is it that far off to expect ads in the same medium? I'm fascinated by the developments of Facebook's Messenger tool, but time will tell how users will react to ads hitting a communication stream that once used to be ad-free.
Between the Sorrell and Marcus interviews, it was amazing to see the movement in the digital world right now. My challenge to readers and viewers is to keep going to online publications, social media, Cheddar, and other platforms to continuously learn about the direction of digital content. It could spark new businesses, software, and platforms that could challenge the current digital landscape's two behemoths.