Wednesday, September 20, 2006

WPP and Google partnership

Advertising giant WPP is trying to get into bed with Google.

Sir Martin Sorrell WPP Group PLC chief executive said yesterday:
'We are working very closely with Google Inc but it is very difficult to work out if it is a friend or foe.'
WPP is Google's third largest customer and helps clients maximize their advertising effectiveness in Google's many functions.

About $1.5 billion of WPP's 2005 revenues of $10 billion were related to online: "About 15 percent of our business is internet, and this will be 30 percent in 10 years," he is quoted as saying.

In a Reuters article last march, Sir Martin made this compafrison between the two organisations:

"Google is at $5 billion in revenues and capitalized at $100 billion, we're at $10 billion in revenues and capitalized at $14.5 billion. They have 5,000 people, we have 72,000. They have 25 offices and we have 2,000 offices. Clearly they have a different model and are smarter than we are."

It might also be noted that at the end of August Google had $10 billion of cash sloshing about with no place to spend it.

Google has been on the mind of the WPP chief for a long time. Something is cooking.

WPP has recently taken a 10 pct stake in Spot Runner, a US online business that enables small businesses to customise their own TV ads at a much lower cost than if they used an advertising agency.

Sir Martin also made the comment yesterday that:
'TV is not dead. It is still the most effective medium for reaching the largest number of people in the shortest time at the lowest cost. There are more TV channels but stable viewing figures and fewer mass market vehicles.'
Or put another way, people are making it clear to the Marketers that they are not a 'mass audience' at all.

A real revolution would be WPP involvement in Google Video.

It will be an interesting bed.

This, of course is advertising. PR has a much bigger opportunity. It is tough for a company as big and diverse as WPP to understand the relationship value model and what that means to advertising over the next few years.