Sir Martin Sorrell, CEO, WPP, is in India for a handful of reasons, among which include meeting clients, his people, speaking to the media, and meeting government officials. His stopovers in India include Delhi, Mumbai and Bangalore.
At a press meet in Mumbai on September 5, Sorrell shared his views on the economic climate around the word, India as a market for WPP, WPP’s worldwide market, the various media streams and how they were shaping up in India – be it digital, advertising, public relations or public affairs.
On his gatherings from his latest India visit, Sorrell observed that a lot of Indian executives were concerned about the recession and its impact on India.
He said, “India is surely impacted by the recession. However, at the time when the recession started, the general feeling out here was of optimism that India is resistant or immune to global recessions.” Sorrell, palpably made this comment in the context of the growing Indian economy and on the basis of what he thought was the mindset of people here. He felt that India was a growing market, and the fact that he was here speaking to possibly all forms of people within the media-advertising circle and also the government, was an indicator of India being high on his priority list.
Further commenting on his observations on India, Sorrell said that the post the Lok Sabha elections, there had been a rise in activities. Comparing what’s happening in the rest of the world to what’s happening in India, he asked, “Are there green shoots around the world? The answer is ‘No’. Are there green shoots in India? The answer is ‘Yes’. Net-net people in India are feeling better in the last two-three months.”
Sorrell also explained how there was an oversupply of media in India, which saw the price of media declining. “There is such an oversupply of media that many shops have shut down, and some are cutting costs. So, what looked like a good strategic decision last year, may not be a right decision now,” he pointed out.
Talking about the worldwide trends, he said that the recession-hit advertising industry was down by 10 per cent, however, digital would grow by 3-4 per cent this year, while search would continue to be the highest growth area. “The three things that are pivotal for growth, and which are also the three strategic pillars that WPP works around, are ‘new markets’, ‘new media’ and ‘consumer insights’ – all of which will enable WPP and the industry accelerate in this current crisis,” he noted.
Further gazing into the crystal ball, Sorrell said that the second half of this financial year would be better than the first half. “2010 will be a promising year for the world of advertising, media, public relations and other such businesses, considering there are events such as the Olmpics, the FIFA World Cup, Asian Games, Shanghai Expo and the mid-term elections. These events will pump in a lot of money in the business,” he added. On the growth in China and India, Sorrell explained that the majority of the growth would be organic.
When asked about traditional and non-traditional media, and how WPP looked at that in terms of importance, Sorrell said that 40 per cent of WPP’s businesses were outside traditional, and that mobile was an opportunity. “The good news is that mobile is growing fast in India. But the bad news is that India’s Internet penetration is not as good as China’s. Through our companies such as Wunderman, RMG Connect, Quasar and some other companies, we are doing about 10-15 per cent of digital in India, while worldwide our digital work is about 25 per cent. Companies like O&M, JWT, and Rediff are making big efforts in their established businesses in digital,” he pointed out.
He further stressed that WPP was ahead of the clients in terms of the online/digital activities. He said, “Clients spend 12-15 per cent of their budget on digital, while our digital work is 25 per cent worldwide. And if we assume that 1 per cent of the media pie will go to the digital media every year, in the next five years the clients are expected to allocate around 25 per cent of their budget, when we would be significantly higher there than what the clients spend.” Sorrell observed that FMCG was one sector that was conservative when it came to spending on digital. While other sectors were spending 15 per cent on digital, he pointed out that the FMCG sector was spending around 5-7 per cent.
Since the WPP group has always been active on acquisitions across its business verticals, he informed that post the TNS acquisition, the acquisitions that the company might look at every year would be in relatively small sizes. As far as India is concerned, Sorrell feels that there is growth and more.