During the INMA World Congress of News Media in London last week, Sir Martin Sorrell, executive chairman of S4 Capital, had a rather gloomy message for those in legacy media.

“Many are dependent on traditional media, linear media,” he said. “The train has left the station. I wish I could tell you that the garden is rosy, but it isn’t.”

Linear TV ad revenue was down 5% to 15% last year, he said, while the digital realm raked in 65% of the US$950 billion advertising market in 2023.

Nearly half of that went to just six large tech firms: Alphabet (US$225 billion), Meta, (US$125 billion), Amazon (US$50 billion), Bytedance (US$90 billion), Microsoft (US$15 billion) and Apple (US$7 billion). Alibaba and Tencent are also expected to have brought in several billion in ad share, but “we don’t get great data for those,” said Sorrell.

Sorrell expects this trend of inequality in ad share to worsen for one reason: “consumers.”

However, he suggested “there are ways of stilling this social and digital takeover,” primarily encouraging traditional media companies to use big news events to their advantage.  

Specifically, he mentioned the U.S. and U.K. elections and the 2024 Paris Summer Olympics as potential events for traditional media to claw back some revenue: “That is an opportunity for traditional media to shift the needle.”

5 ways AI will impact media businesses

Sorrell presented a five-point plan for how AI affects the business of a media or advertising company.

1. Visualisation and copywriting: “The time it takes to do an ad has been compressed. What we used to do in three weeks we can do in three hours. My bet would be reduced employment, as there are less hours of work needed,” he said.
2. Personalisation at scale: Borrowing the Netflix model of advertising, which he called “the most powerful model that we see from our modern technology point of view,” Sorrell suggested ads can be hyper-personalised in the future. To do this effectively, though, a company must have its own first-party data, due to the decline of third-party cookies. “All of you have to get your first-party data organised. Then we know what the consumers like, and we recommend things based on that. The Internet is the mechanisation of individualised communication — personalisation.”
3. Media planning and buying: Sorrell noted that Big Tech firms such as Google and Meta are already providing algorithms and services for media planning and buying: “Lots of jobs [in media planning and buying] are currently being done manually or semi-automatically. This is not going to happen anymore. You are going to see tremendous compression of jobs [as a result of AI].”
4. Efficiency: Sorrell pointed out that the use of AI will lead to tremendous cost reduction for those who implement it effectively. 
5. Democratisation of knowledge: “You will be able with AI to educate everyone in an organisation. AI will flatten organisations, de-silo them. It will bring you a much more agile, leaner, flatter organisation.”

AI’s broader societal influence

On the overall impact of AI on the future, Sorrell said: “Every technological innovation has good stuff and bad stuff. Just look at social media.  

“The only way you regulate AI is not by imposing regulatory restrictions, but through self-regulation — both individually and together.” 

He also referred to the work of 20th-century economist John Maynard Keynes, who predicted automation would decrease the number of hours human beings work.

“We’re gonna end up having more holidays. AI will alter the work-life balance, which may be a good thing. We may all be as happy as the Scandinavians as a result,” he joked.

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