This week was the MIPTV show in Cannes, the largest entertainment content congress in the world. Sir Martin Sorrell, CEO of communications giant WPP took the stage for an hour to share his view of where the media and advertising business is going, and what he believed will be important strategies for companies going forward.

Fundamentally, Sorrell believes that the global economic meltdown combined with serious ongoing structural changes will fundamentally change the nature of the media and advertising business forever. This will be especially difficult for some media owners: “If you are a media owner, you are in the perfect storm, caught between the severest recession in the past 40 years and a technical revolution. If I was a media owner that only addressed a single media in a single country, I would be very nervous.”

But he also cautioned advertisers that becoming totally conservative and risk averse at this time might be the wrong move: “all research shows that companies that invest in these times are the ones that come out stronger with stronger brands - yet almost all people naturally tend to cut (budgets) at a time like this.”

There were three main areas that he discussed as being important for companies such as WPP to focus on going forward.

• New Markets The coming years will see the growing power of the so-called BRIC countries (Brazil, Russia, India, and China), as well as several countries in the middle east, eastern Europe and Africa. Consumers in many of these countries have tended to be “savers” rather than “borrowers”, so they may well come out of the recession first and fastest.
• New Media The level of activity in the mobile and internet areas will continue to become increasingly important. Sorrell pointed out that people spend generally 20% of their time consuming “new media”, but advertising in this area represents only about 12%. So two effects will happen simultaneously - brands will increase their new media spending to align more with today’s consumer preferences, and at the same time consumer preferences will continue to shift towards new media.
• Consumer Insight and Addressability With the continuing fragmentation of consumer communication channels and the increasingly individual media consumptionn patterns, it will become more and more important for brands and agencies to understand their consumers in a more detailed way and to learn to effectively use new channels for targeted, personalized, “individually addressible” advertising. This is clearly one of the biggest potential strengths of the mobile channel.

Branded Content
Sorrell also talked about what he sees as one of the big opportunities for WPP - branded content. With Group M having a media buying share of 20% to 30% in many markets, he looks forward to working with local content partners to develop better branded content which will not only be very cost effective, but it will also be a great way to communicate with today’s fragmented, hard to reach audiences.

Final Thoughts
Throughout his speech, there were a number of interesting observations and thoughts about this rapidly changing industry. There were two which I thought were particularly applicable today:

• Green Although in past economic recessions “green” and “sustainability” issues have often been viewed as less important, he believes that they will remain very important for consumers even during this severe recession. These issues are now so strongly ingrained in today’s consumer that they brands must continue to address them.
• Media Habits are changing incredibly rapidly today, and are often age dependent. Trying to keep informed is difficult, but relying on your own instinct can also be misleading. Speaking to an auditorium full of mostly 30-40-50 something media and entertainment people, he reminded everyone “don’t look at your media habits and think that they apply to the next generation.”

Read more about the MIPTV conference.