WPP Spent 20% on Digital in '09, Building New Ad Tech

“There is no digital without data.” That was the mantra at WPP’s investor event last week, where the holding company said its media agencies spent 20 percent of their budgets in North America last year on digital.

The data-driven firm talked digital at an investor-focused event in London last week, during which senior WPP executives placed a firm emphasis on the company’s data and technology strategies, with emerging practices such as real-time bidding and sophisticated behavioral ad targeting forming a central theme of the day’s presentations.

Following an introduction from group CEO Martin Sorrell, speakers from the firm’s agencies including Wunderman’s David Sable, GroupM’s North American CEO, Rob Norman, and Brian Lesser, GM of WPP’s Media Innovation Group, presented on WPP’s outlook with regards to digital ad technologies, and the way the company is integrating and incorporating those technologies across its businesses.

According to Norman, digital accounted for 20 percent of the group’s overall media spend in North America in 2009, of which 18 percent went to paid search. While search accounts for a far greater portion of online ad spending as a whole, WPP’s clients typically are brand advertisers that don’t spend as much on search.

In Europe, the Middle East and Africa, the figure was somewhat lower, with digital accounting for 11 percent of overall spend compared with a global share of 13 percent. WPP’s search spending in Europe and globally accounted for around 19 percent.

The company’s focus on display media makes innovations in data collection ever more important, as technology continues to present opportunities to create efficiencies in media buying, suggested Norman.

“Technology is changing our marketplace enormously, and in the last 18 months we’ve seen huge leaps,” he said. “Now the whole notion of the context of media is only part of the possibility. We’re able to find audiences and get outcomes for our clients out of any particular given context, and that’s changed the value equation really significantly,” he added, referring to platforms such as demand-side platforms.

Lesser described how ad exchanges, data providers, and other technologies are making it essential for the firm to build a system to manage all those functionalities. He described a platform WPP is developing to accommodate those technologies, dubbed ZAP. The company is also developing its own proprietary demand-side platform B3.

“All of these companies in this space are confusing to clients. The technology strategy is to build a platform that can integrate and get the most out of any of these technologies, and to organize this very complex environment. Data is really the center of that platform…. We can swap partners out as the technologies develop,” he said.

Data from any testing of new technologies or approaches for specific clients is then run through that platform in order to inform future campaigns, Lesser said.

After presenting work from a range of major clients such as Ford, Microsoft, and Nike, Wunderman’s David Sable described how the group is placing data at the center of its work for those brands, stating repeatedly “There is no digital without data.”

He also emphasized issues of locality, despite the global nature of the Internet. “It’s the dichotomy of the Web,” he said. “At the end of the day much search is local, mobile is about local, and all of our global clients have serious and important sales needs in local markets. All relationships are local, and that’s a key mantra for us.”