Dive Brief:
- Speaking at the UBS Media and Communications Conference on Tuesday, WPP CEO Martin Sorrell said his company is spending approximately $70 million with Snapchat, according to a report in The Wall Street Journal.
- Sorrell also said his company will increase its spend with Facebook, which is concerned about Snapchat’s growth and is “trying to undermine” it, the Journal quoted the exec as saying. He suggested Facebook could grow to become WPP’s second-biggest media supplier next year, supplanting News Corp. and Twenty-first Century Fox, according to a report in MediaPost.
- On the topic of Trump, the CEO said his potential impact is hard to measure but that it could be more positive than many expect, at least in the short term, per MediaPost. If the relationship between the U.S. and China worsens — something that now seems a possibility given how Trump’s conversation with Taiwan has been received — it could put a dent in the global economy, he added.
Dive Insight:
As the chief executive of WPP, Sorrell’s prognostications are often closely watched as an indicator of where the industry is headed.
During his comments, Sorrell addressed the balance of power among digital marketing platforms, with 75% of all digital spending concentrated in two companies — Google and Facebook. The CEO joins others in the industry in voicing his desire for a third substantial force in digital marketing, suggesting Snapchat is a contender for this role.
While the $70 million WPP is spending on Snapchat is good news for the up-and-coming platform, the amount is dwarfed by the $5.5 billion WPP expects to spend on Google this year. The conglomerate will also spend $1.75 billion on Facebook this year.
With Donald Trump's surprising win in the presidential election, there has been significant uncertainty about what his term might mean for the advertising industry. Some brands have seen a swift backlash from consumers for messaging perceived as either in support of or against Trump. The president elect’s stance on trade relations is also making some nervous.
Sorrell’s comments about Trump suggest that, in the short term at least, business does not have anything to worry about. The bigger concern is the longer term implications if Trump were to damage trade relations. In the midst of continued global uncertainty originally driven by Brexit as well as the political climates in Italy and France, the ad business must be ready to adapt to the direction that Trump elects to take.
