Article

Mike Shaw
Mike Shaw 7 June 2018

Changes at the top: what Sorrell’s departure can teach us about digital transformation

Rapid change driven by technology is now a fact of life. The so-called Fourth Industrial Revolution that we are living in, is changing society at a much faster rate than human history has ever known. How do marketers and advertisers – and all businesses, for that matter – ride the wave of digital transformation and make sure they come out on top?

The very first step to adaptation is observation. In the words of Arthur Sadoun, chief executive of Publicis Groupe, “the consumer has changed, the media landscape has changed, our clients have changed.”​

Digital transformation is a quiet, but powerful, driving force

In the wake of the recent departure of Martin Sorrell from WPP, the group has quickly looked to dispel talk of a breakup. But the speculation is not just another case of a micro-economic rise and fall within the industry. It is directly related to the profound forces at work in society, leading businesses to consider just how much we will need to shake things up to adapt and transform.

Arthur Sadoun explained to The Drum in late April that – in light of changes in WPP’s leadership – the structure of holding companies will need to change. He stressed that everything has changed, and holding companies will have to transform accordingly. Only by taking stock of how the wider landscape has changed, can we begin to think about change within our own business model.

And the evidence is that Publicis – the world’s third-largest advertising agency – is practising what it preaches. In recent weeks, the group announced it is setting aside €300m-500m to be invested in both data and creativity, particularly acquisitions and creating solutions hubs. For Publicis, digital transformation is firmly on the radar, and is a guiding beacon for the future of the agency.

Analysing megatrends to identify new business opportunities

But a more fundamental question remains – how do we detect the subtle forces that are re-shaping our world in the first place? Just as Publicis’ Chief Executive hinted, change requires a wide perspective of the entire landscape. And when it comes to digital transformation specifically, that means taking account of the broader societal landscape. 

Every significant societal change is motivated by three key factors: generational, technological and economic shifts. Understanding if new services or solutions are aligned with these shifts is the first step towards your digital transformation.

Rapid urbanisation is a good example: new technologies, economic needs and different ways of thinking across multiple generations have led populations to increasingly move to cities. As a consequence, cities are larger and more numerous than ever and have given rise to countless new market opportunities and a huge impact on resource availability. Innovations that have accompanied this megatrend includeshared working spacesclothing rental services and Uber.

The allies of transformation: breaking old habits and forging new partnerships

Another major step in the process of adaptation will be the ability to identify sources of creativity. True creativity stems from collaboration and diversity, with the perspective of external players. Innovation in marketing can only stem from brands and agencies working with partners who can help them adapt to society’s megatrends. Publicis already demonstrated an awareness of this, by opting to fully acquire Sapient in 2015, with a laser-focused approach to digital transformation.

Linked to creative thinking will be the ability to harness the power of data. Developing and relying on partnerships with technology experts will be the most efficient way to reinvent businesses to adapt to the new reality. In the the weeks since Sorrell’s departure, all eyes have turned to Kantar – the data arm of the holding company – following reports of its potential buyoutas the first stage of a break up of WPP. No doubt Kantar stands as one of the most expensive – and valuable – assets to a media agency.

The reality is that in today’s world attention spans are getting shorter, and consumers expect ever more personalised experiences. Data will stand as one of the major enablers for businesses in all sectors – especially in marketing tailored products and offers to consumers. And when it comes to beating the competition, data will also be key to campaign management and ensuring that marketing is providing robust ROI.

The best way to look at WPP, is to take stock of where the advertising industry has come, and where it’s going. Immediate reactions from the industry aren’t just hearsay – when looking closely, they are a litmus test for the way in which businesses will have to adapt in the rapidly-changing world in which we live. The broader forces at work shaping society are constant. But only with a major movement – like the departure of Sorrell – do we really find time to take a step back, and listen to what’s really going on across the landscape.

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