Latin America may not have “fulfilled its promise”, but WPP chief executive Sir Martin Sorrell remains confident that the region will navigate the economic “bumps on the road”.
Opening the first day at the Festival of Media LatAm 2015 in Miami via video link, Sorrell was questioned by C Squared founder and chairman Charlie Crowe about the economic problems facing many emerging markets.
Having claimed we would experience “the decade of Latin America”, Sorrell pointed out “it took the US 100 years” to become a superpower. He anticipates markets currently undergoing economic turbulence, such as China and Brazil, will emerge stronger.
“Latin America has not fulfilled the promise we anticipated three or four years ago, but to be fair the rest of the world hasn’t either,” said Sorrell. “These are short term stutters, and in the longer-term we will see a maintenance of that improvement.”
“If you look at the prospects longer term for Brazil and Mexico, or Argentina, or Colombia, Peru, Chile, Ecuador, the prospects I think are very strong. If they are not then we are all in trouble, because these areas will provide growth in the longer term.”
Sorrell insisted WPP is still enjoying growth in Latin America, with other markets growing at a faster rate to Brazil, beset as it is with political and currency troubles. And while Mexico has not matched the “tremendous amount of optimism” many felt a few years ago, it should not be placed in “quite the same category” as Brazil, he added.
When asked about the recent flood of media reviews, Sorrell painted a picture of clients struggling to cope with disruptors on the one hand, and budget squeezes on the other.
With media a significant investment for global advertisers, and uncertainty over issues such as ad fraud, viewability and measurement, it is no surprise that CMOs wish to reassess their agency arrangements.
“Clients are facing the pressures I mentioned – it is only natural they would look at one of their biggest, of not biggest, cost on P&L,” said Sorrell. “These are all issues coming at clients with increasing rapidity, and they want to sort it out. I think this leads to tremendous uncertainly and a desire to improve performance. You can’t fight it.”
One thing the industry must fight, however, Sorrell said, is the rise of ad blockers. Apple’s recent iOS 9 update has brought the topic to the forefront, with many in the industry concerned it could severely damage the sector.
“If you do the maths, ad blockers would affect about 20% of the digital market, so it is significant, it is a concern. What we have to do as an industry is to make sure the creative products and ideas are even more powerful, and overcome any technological threat,” he said.
“There was a time when advertising was more entertaining than the programmes it interrupted. So we have to do a better job of engaging consumers.”
