It’s been about two years since Sir Martin Sorrell, chief executive of the advertising conglomerate, WPP Group, visited Mumbai last. Much has changed in the interim, with the onslaught of the global recession and its impact on everything, including the communication business. Sorrell’s prognosis: the growth decline has been much sharper in developed markets than in developing ones, which in turn has meant that growth opportunities for the next few years would come from developing and untapped markets.
The trend-spotter says, “Both the Chinese and the Indian economies have coped pretty well with the recession in general and that has reflected in our business also.” He points out, though, that India, like many growing economies, is an under-advertised and under-branded market, and advertising spends as a proportion of the GNP (gross national product) are lower than the worldwide average.
“India is half the size of our Chinese business, which indicates the relative under-investment in advertising and marketing services here,” he states. “A lot of people say that Chinese statistics are inaccurate, but I don’t think so. Rather, I think that the Chinese tend to under-estimate rather than over-estimate what they do.” He adds that not just India and China, but the focus could soon be on the “Next 11” economies that include Bangladesh, Egypt, Indonesia, Iran, South Korea, Mexico, Nigeria, Pakistan, the Philippines, Turkey and Vietnam (according to a Goldman Sachs report).
Specific to advertising, all the turmoil, remodelling, shrinking brand spends, ROI-led marketing spends have also meant that the digital medium has had even better environment for faster growth. Sorrell continues to be gung-ho about the power of the digital media and the impact of technology on the advertising business. He had started talking the digital language much before many others did in the advertising business. However, he is equally ‘partial’ to the traditional media such as print and television.
Eventually, he says, it is not about making a choice of one or the other, but about the intelligent use of the various media. Lest anyone think that the future of advertising is going to be all about tools and technology, Sorrell has a word of caution: “Our business will continue to remain a people business and talent will still be critical. Now, we will need to have people who will understand technology in a more effective way.” Citing the WPP instance, he adds, “We invest 60 per cent of our revenues in people, which is $9 billion (Rs 40,000 crore) a year. Technology has become more important but it will never replace what we invest in people.”
Globally, he expects 2010 to bring some cheer, “thanks to the Winter Olympics in Vancouver, the Asian Games in China, the World Cup in South Africa, the global Expo in Shanghai and the mid-term elections in the US. Combined, these five things could bring about a growth of around one per cent, overall.”