MUMBAI: WPP CEO Sir Martin Sorrell feels that the shift toward the east and south will continue. Apart from China in the East and India in South-East Asia, Sorrell feels that the Germany-Poland-Russian cluster in Eastern Europe will be a force to reckon, along with Russia, as long the price of oil stays above $100 a barrel.
In the southern hemisphere, Latin America and Brazil hold significant opportunity. Other significant areas would be the Middle East and Africa, particularly South Africa.
Sorrell was sharing his perspective on the key global trends facing marketers and agencies at the Association of National Advertiser‘s annual Advertising Financial Management conference in Florida.
Disintermediation would be an important trend as the web will continue to create new business models and an attractive destination for consumers, according to a Forbes report on Sorrell‘s talk at the Association.
Sorrell also pointed out that there will be shrinkage in capacity in human capital. In many categories there continues to be a supply overcapacity because of the growth of South Korean, Chinese, Indian and Brazilian manufacturing. Though there is no shortage in capacity, human capital is becoming scarcer. The main reason attributed to this is aging population which will make it harder for companies to find, incentivise, and motivate talent 20 years from now.
According to the WPP CEO, major retailers like Wal-Mart, Tesco, and Carrefour are likely to lean harder on manufacturers of consumer packaged goods as they face a tough competitive environment. The CPG manufacturers will in turn apply more pressure on their suppliers.
Sorrell predicted that there will be an increase in the importance of internal communications as more CEOs focus on it and make sure that people understand and live ‘the brand‘ as well as the vision and strategy of the company. This will be a key challenge and an opportunity in the coming years.
As companies are centralising power in response to the increase of local influence, he foresees regional management becoming intermediated and this development will be accelerated technology.
Observing the fact that the collapse of Lehman Bros. in 2008 impacted corporate more than consumer behaviour. Sorrell predicts that companies are likely to maintain a cautious financial stance for the foreseeable future as finance and procurement play a more active role than marketing.
In Sorrell‘s opinion, governments will continue to play a bigger role as has been the outcome of the financial crisis.
Also, sustainability is the central issue for every CEO. Lastly, agency consolidations are driven primarily by compensation pressure, and the relationships and the advertising industry‘s structure are determined by that pressure.
