Martin Sorrell predicts good year for ad industry

MUMBAI: WPP Group chairman and CEO Sir Martin Sorrell, in a recent interview with Fortune magazine, has opined that one of the biggest pressures on clients today is the lack of inflation. He said, "A nice bit of inflation - let's say four or five per cent - would give pricing flexibility."



In the interview, Sorrell says that 2004 will be a better year for the ad industry. He is of the view that political advertising (US president George W. Bush is up for re-election this year and he alone is certainly overloaded on the campaign funds department) will help the industry as will as the Athens Olympics. Sorrell also voiced his worries about the US government's ad spend. He was quoted in the inetrview as saying, "It's rising faster than anytime since 1967. After November, spending may be so excessive that whoever gets in the White House has to pull in the reins."

According to Sorrel, the one thing that the clients are most worried about today is distribution and the growing power of retail. He cites the example of the world's biggest advertiser - Procter and Gamble. "18 per cent of P&G's sales go through Wal-Mart. If you look at just their US sales, it's probably 25 per cent to 30 per cent. And it's safe to say that one-third of Sony PlayStations are sold through Carrefour," says Sorrel.

Sorrel believes that the next big economic rival off the US will come from Asia - China to be precise. "Two-thirds of the world's population will be in Asia by 2014. Anytime a country has had relative hegemony to the extent that America has, something always pops up to replace it. Clearly that thing now is China," he is quoted as saying.

Apart from building WPP's Asia business, Sorrell is now looking at changing the WPP's functional equation from being half traditional advertising and half other marketing services to one-third advertising and two-thirds other. "Our clients are going that way because TV advertising continues to go up in cost. We want to expand in market research and direct and Internet marketing. We call these areas quantitative aids to decision-making. People aren't going with their gut as much as they used to. Direct or interactive marketing is more measurable than traditional advertising - so it's more pleasurable for the decision makers," says Sorrell.

Sorrell has been instrumental in assembling one of the world's largest communications conglomerates, which includes ad giants Ogilvy & Mather, J. Walter Thompson, and Young & Rubicam plus Burson-Marsteller in PR and Landor Associates in corporate-image making. WPP now spans 104 countries.

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