The Digital Revolution. Presentation by Sir Martin Sorrell, WPP plc 5 October 2009
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1 The Digital Revolution Presentation by Sir Martin Sorrell, WPP plc 5 October 2009
2 The themes I will aim to cover Introduction to WPP What has changed since the last Olympic Congress in 1994? The impact of the digital revolution on media The implications for brand owners and sports bodies The opportunity for the Olympic Movement 2
3 WPP 3
4 WPP has the leading global digital portfolio ($3.9bn) Global Agencies 4
5 #1 in global media billings Rank #1 $27.9bn Rank #1 $86.2bn Rank #2 $29.5bn Rank #1 $15.6bn Rank #1 $11.3bn +32% of global network spend #1 in offline #1 in digital #1 in pan-regional 5 Source: RECMA Global Billings Ranking 2008 July 2009
6 Strength in research, insight and consultancy Rank Revenue 2007A ($m) 1 Nielsen 4,707 2 Kantar/TNS 4,030 3 IMS 2,193 4 GfK 1,593 5 Ipsos 1,271 6 Synovate IRI Westat Arbitron 338 6
7 WPP Olympic credentials Advertising and Media Investment Management Branding, Design and Identity Direct and Digital PR Public Affairs Research and Insight 7
8 Changes in the media landscape since the last Olympic Congress Internet Population 1 : 16 million 1,500 million Mobile Phone Subscribers 2 : 55 million 4,000 million Online Advertising 3 : $0~ $55,176 million US Newspaper Circulation 4 : 62 million 49 million US Evening News Viewership 5 : 35 million 25 million 8 Source: 1-internetworldstats.com 2-International Telecommunications Union 3-GroupM 4-NAA.org 5-stateofthemedia.org
9 A new landscape of digital platforms Social Media Consumer Generated Media Online Video Search Marketing Mobile Widgets Web 2.0 Online Advertising Websites 9
10 Live sporting events continue to be must see television Ave. Global Audience Beijing Olympics Opening Ceremonies: 593 million World Cup Finals 2006 (average match): 411 million 2008 UEFA European Championship- Finals (average match): 166 million 2008 UEFA Champions League- Final: 145 million 2008 NFL Super Bowl: 104 million 2008 Brazilian Grand Prix: 80 million 10 Sources: Mindshare ; FIFA and UEFA; TimesOnline, 1,000,000,000: Beijing Sets world TV record, 5/10/09
11 Global sponsorship spend +13.7% +3.1% +10.5% 11 Source: IEG
12 Sports sponsorship increases brand value considerably Budweiser is worth an additional $9 billion because of its sports sponsorships Sports fans Not Bonding: 11% 4% Advantage: 42% 28% Performance: 53% 44% Relevance: 56% 47% Presence: 83% 81% 12
13 Global economic impact of sports Direct GDP Impact of Olympics ($ Billions) 84% Seoul Barcelona Atlanta Sydney Athens 13 Source: The Economic Impact of London 2012 Nottingham University 2006
14 The impact of the digital revolution on media
15 1.6 billion out of 7 billion online today 15 Source:
16 An increasingly global audience Broadband penetration by market 73% 25% 34% 72% 35% 13% 7% 27% 35% 22% 76% 10%.3% 7% 24% 22% 11% 81% Developed Countries BRIC & Next 11 Countries 16 Source: Digital %- GroupM TYNY 2008 Report Broadband- Internet World Stats
17 Mobile penetration even greater than broadband 4 billion out of 7 billion have mobile phones 17 Source: International Telecommunications Union
18 Resonating with young people in particular 18
19 A much more complex and interactive future Broadcast Passive Devices Addressable Interactive Ecosystems 19
20 The future of media Addressable Portable Searchable Social Interactive Transactional Ubiquitous 20
21 The implications for brand owners and sports bodies
22 Attention is an increasingly scarce resource Melbourne 1956 Beijing
23 Consumers are taking control Users as producers and distributors of content Users in control What I want; where, when and how I want it. Democratization of the tools of production, distribution, consumption and personalization. 23
24 Premium live events will still command a premium Cost per thousand (CPM) of Superbowl spot US$ CPM Source: Group M / MediaEdge:CIA
25 Sports brands remain some of the most powerful in the world Top 10 Most Valuable Global Brands Beijing Olympics Bonding 22% 19% Advantage 53% 63% Performance 60% 80% Relevance 68% 83% Presence 85% 86% 25 Source: BRANDZ 2006 Millward Brown Optimor
26 While broadcasters offer a lot of money, their audience is getting older Average Age of Viewers watching the Summer Olympics in Primetime on NBC Barcelona Atlanta Sydney Athens Beijing 26 Source:
27 Across demographics the Olympics perform better against women and older age groups Superior: Preferable: OK: Relevant: Tangible: Males 24% 62% 87% 91% 98% Females 34% 72% 91% 93% 98% Superior: Preferable: OK: Relevant: Tangible: s 25% 64% 87% 91% 98% s 32% 69% 91% 93% 98% 27
28 Beijing was the first digital Olympics 28
29 50% of London 2012 s YouTube channel viewers are under 35 YouTube's age profiles for London 2012 Olympics % 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 29 Source: London 2012 Keynote speech to Mobile Entertainment Market 2009, Alex Balfour
30 People are talking about it online Topic of online conversation 30 Source: MEC Access, London 2012: Is it a golden opportunity? An investigation to help you decide
31 To engage top brands, you need to do more $millions $100,039 $76,249 $67,625 $66,622 $66,575 $63,113 $61,283 $59,793 $53,727 $49,460 31
32 The opportunity for the Olympic Movement: 5 points to think about
33 1. Think like your consumers 33
34 Recognize the breadth of your competition 34
35 35 2. Create the rights franchise of content
36 Connecting with the average Olympian 36
37 3. Engage with the young in the right environments 37
38 The young interact with media in different ways Kids and Teens Watch TV on Other Devices Internet 27% 25% 33% PSP/Handheld Videogame System 12% 13% 12% ipod/mp3 Player 4% 7% 11% Cell Phone 4% 2% 7% 0% 5% 10% 15% 20% 25% 30% 35% Ages 8-12 Ages 9-14 Ages Source: MORe, Base = Youth who watch TV
39 Their interactions are more social 39
40 Get to know the new players 40
41 Example of how WPP s United and the IOC are working together to engage and interact with a global youth audience.
42 The Best of Us Challenge An online global competition in which young people can compete in a variety of different challenges against both Olympic athletes and their peers. The idea is to engage young people in the Olympic Games by giving them a chance to actually compete with Olympic athletes in a digital, grassroots forum. Among the Olympic athletes participating are Rafael Nadal (Spain), Michael Phelps (US), Lindsay Vonn (US), Yelena Isenbayeva (Russia), Shawn Johnson (US) and Carolina Kluft (Sweden)
43 The Best of Us Challenge Site Home Page A user can select to either compete against an athlete Challenge or create his/her own unique Challenge from the homepage. Young people will be able to go to The Best of Us Challenge via Olympic.org or through Please note: final copy, design and site interactions still being finalized. exposure from an online seeding and syndication plan being dedicated to Challenge promotion.
44 The Best of Us Challenge Site Athlete Detail Page A user can post a video onto their social media site through the share functionality, as well as scroll through other participants responses to the athlete Challenge. Here s Rafael Nadal s Challenge page he s challenged young people to see how many tennis balls they can pick up and hold in 30 seconds. Whoever can best match him or beat his record will win a signed t-shirt from an Olympic athlete, a The Best of Us poster and an official Vancouver 2010 video game. After viewing the athlete s Challenge, the user can decide whether or not s/he would like to best the athlete s Challenge and submit a response.
45 The Best of Us Challenge Rafael Nadal s Video
46 The Best of Us Challenge Social Media The Challenge will also have dedicated Facebook and Twitter pages with up-to-date information and Challenge content. Users will have the option of becoming a fan of the Challenge on Facebook or signing up to receive Challenge Twitter feeds Social media pages will also align with current IOC initiatives (such as the Olympics Facebook and Twitter pages) to cross-promote content and drive additional IOC fans and supporters to the Challenge for added exposure.
47 4. Understand the technology opportunity i. Get social MLB Advanced Media is largest live event producer in the world. Ability for MLB to show games not broadcast on TV. Initial investment (2000) $1million per team, now valued between $2 2.5bn. 47 Source: WPP
48 . And create communities 48
49 ii. Leverage new screens technology Community On Demand On Demand Linear network Linear network Linear network Past Present Future 49 Source: WPP
50 iii. Add value through mobile Android App for Wimbledon
51 51 iii. Add value through mobile
52 5. Think about what digital inventory you can offer sponsors and partners 52
53 It s not just about screens 53
54 In Summary
55 Thank You
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