Sorrell wades into Disney media review, criticises outmoded agency business model

S4Capital’s Sir Martin Sorrell gives good interview even though half the audience is probably scratching its head at some of the phrases he uses (he likes to introduce new ones on a regular basis.)

So attendees at an International Advertising Association event last week were treated to his views on the current $1.7bn Disney/Fox media review (he thinks media agencies are going to promise unaffordable and, maybe, undeliverable prices) and why agencies get themselves into trouble with “tentpole” marketing.

Disney first (the two things seem to be linked.)

Omnicom, Dentsu, WPP and Publicis are pitching for Disney (which now includes the Fox film business) alongside independent Horizon and, it seems, Wieden+Kennedy which is interesting. Omnicom’s OMD has handled Disney since 2013 and is looking after the lot on a temporary basis. Disney, as is nearly always the case, is looking to save substantial amounts of money after coughing up $71.3bn for Rupert Murdoch’s film business.

So where do tentpoles come into it? Tentpole marketing comes from the film business where studios try to cash in on the buzz generated by a blockbuster to sell all sorts of other stuff. But the tentpole effect only lasts so long.

Sorrell seems to be saying that agencies, in the case of Disney media agencies, do this too. They bet the house on winning a big account, hoping that this creates a tentpole opportunity that they can use to win other business (and boost the share price.) Even though the price they had to offer for the biggie may jeopardise the whole business.

An associated problem, of course, is that if they guarantee below-par prices to one big client, other clients and/or media owners have to make up the difference.

Sorrell said his S4C eschews tentpoles for an “iterative” model which comes from software: essentially it means starting with a simple model that then broadens in scope and takes on more tasks. It’s what management consultants do and there’s logic in S4C setting off down the same path. Conventional agencies have tried to do this but largely failed. As Sorrell puts it, there’s too much “internecine strife.”

Interesting stuff although, doubtless, self-serving.

As for Disney we’ll have to see who comes out on top. People may wonder what Sorrell would have done if he’d still been at WPP. But that was then..

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