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WPP's Sir Martin Sorrell on the Future of Virtual Advertising

'The medium is becoming more important than the message'

"The hurdle for offline is much higher than the hurdle for online," says WPP CEO Sir Martin Sorrell. Getty Images

BARCELONA, Spain—Sir Martin Sorrell is a fan of virtual reality. So far he's driven a rover on Mars, been strapped to the side of the International Space Station, visited a Syrian refugee camp in Jordan and even attended a performance by Bono—all by way of VR.

The WPP CEO, who also happens to be one of the kingpins of the advertising industry, says VR and artificial intelligence are perhaps the most important technologies to keep track of in 2016. Speaking with Adweek in Barcelona on Wednesday, Sorrell said VR hardware has come a long way.

"Whether it's 2016 or beyond is another question, but I think the VR thing is really very interesting," he said. "Maybe I was just very influenced by what I saw at Sundance with Ridley Scott's film The Martian, but I think that it is sort of game-changing. The technology is sort of getting there; the software is the key issue. Although I think that's going to come. If you're thinking about travel, sport, live events, it's phenomenal. Gaming? Entertainment? Fantastic."

Many say this will be the year the idea becomes more mainstream, but the reality of virtual advertising seems a couple years off. However, there's a lot of potential, and when the tech and software are ready, Sorrell said he can see WPP investing in the platform. After all, he said, virtual reality has elements of technology, data and content—all areas where WPP already spends plenty of money.

"It will come," he said. "But it's a question of what's right for us, and what catches our attention. And there's a little bit of serendipity about this. I mean, although we peg out technology, content and data, a lot of what we do is serendipity in the sense of where the molecules collide."

At Mobile World Congress, mobile is of course the mantra. And with the continuous convergence of media and tech, Sorrell says the time has come to conclude that the medium is becoming more important than the message. The massive four-day expo, where industry executives—along with an increasing number of creatives—discussed, and sometimes sparred, over a digital future.

"It's not just another channel," he said. "[Mobile] is probably the most important channel that has been developed, and it changes the way you live your life, by virtue of the fact that it's always on, it's 24/7, and we've never had this. It's not just a question about how you consume media, but it's how you buy things, it's what you buy … It's a way of life."

Sorrell said the advertising industry's investment in mobile is lower than it should be.

"It's an adjustment, in part, because you've had traditional ways of doing it," he said. "Just like the Internet, traditional companies take time, it's generational. But having said that, I think that part of the responsibility lies with us. We haven't developed creative in effective ways, we haven't contextualized it from a media point of view or a creative point of view as well as we should, but it will come."

For its part, WPP has ramped up its allocation with major tech companies. In the past year, the London-based holding company's spend with Google went from $2.9 billion to $4 billion. Facebook's rose from $640 million to $1 billion. Digital publishing investments have also increased. Last year, WPP spent $150 million with AOL and plans to spend $250 million this year.

Digital spending around the world is on the rise. According to eMarketer, mobile video advertising in the U.S. increased 80.6 percent in 2015 and is expected to continue double-digit growth through 2019. This year, mobile digital video ad spending is expected to total $4.08 billion. In China, total digital ad spending is expected to increase by 58 percent this year to $24.99 billion.

And yet, measurement is still an issue. It's something Sorrell has become somewhat known for criticizing, especially since his Dmexco talk last fall in Cologne, Germany. He said all media owners are concerned with it, while simultaneously expressing excitement for mobile's potential.

"The hurdle for offline is much higher than the hurdle for online," he said. "The new media owners—Facebook, Google—are less worried about it because they get an easier ride. But it has to change. I mean, it's in Google's and Facebook's interest for us to develop a better measurement mousetrap, or metric. Media owners are unhappy, clients are unhappy, agencies are unhappy."

WPP is trying to change that by investing in ComScore, which acquired rival measurement service Rentrak in September. Sorrell said the combined company's new measurement developments are already seeing traction, with Publicis and GroupM now both using ComScore data.

"I think some of the new media owners are being flexible in their approach, and attentive," he said. "Some are not. And I think the general feeling, if you went around and asked, is that those three communities—media owners, clients and agencies —are not happy."

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