Areas of concentration and the steps to achieve growth from potential but untapped avenues are already visible in the WPP structure through its three strategic objectives. In addition to these, WPP Chief, Martin Sorrell, has also identified the business to be technology driven in the future and WPP is already gearing to combat what the future holds on that count.
The three strategic objectives of the group comprises expansion in areas, which have hitherto seen little involvement from parent companies in advertising and media functions. In conversation with exchange4media, Sorrell said, "Geographical multifunction is high on the agenda. In five to 10 years WPP, will be seen gaining strength in Latin America, Asia, East Europe, Africa and the Middle East."
Time and again, Sorrell has brought out the importance of China and India in the Asia market and that continues to be the case. He explained that WPP was one of the few companies that managed to break ground in the Chinese market and even in these markets, WPP had maintained apt focus in the non-advertising side of business.
"You will see us more out of advertising," said Sorrell, speaking on the larger picture again. "When we started WPP, we started it with a very unfashionable below-the-line route, focussing on design, promotion, packaging and so on. We are the only ones who understand the importance of the non-advertising area. Going forward, we will get more into areas like information and consultancy, PR, public affairs, healthcare, branding and identity, specialist communication and direct and interactive mediums like the Internet."
According to Sorrell, one area that companies could not ignore was technology. Explaining that it would play a huge role in steering business, he said, "Who would have foreseen the pace of the change. You can see it in the fact that many of the major media companies are trying to capture the new technology space aggressively by buying companies of very high valuations."
He added that by downgrading valuations in traditional areas like newspapers and magazines, stock market had overdone it. "They are still a good buy in my sense and there will be recovery. But, in the long term they have the big issue, which is how do you deal with Google – putting it very simply," he said.
Has any media organisation managed to transform itself enough to be adept with today's changing times in this regard? "No one has," replied Sorrell, "15 per cent of our business is Internet driven. Wunderman's 500 million, OgliyOne's 500 million, RMG Connect's 250 million and other business, which would be another 250 million, which is high in comparison to the worldwide ratings of 4 per cent. But it can never be enough, given that what I think is going to happen. We would like to do more."
By his own admission, the WPP Chief is also reading less of conventional media, "I am reading less of the Economist and Fortune though I am reading more daily press. But I watch more CNBC and Bloomberg and get more stuff on my Blackberry – breaking news.com and FT.com!"
Just as much the business becomes technology driven, one-to-one communication will gain more ground. Sorrell explained that David Ogilvy had foreseen this much before and the fact that for Ogilvy, advertising and direct were given equal billing bore witness to this. However, the change is a lot faster now and is one of the reasons Sorrell's acquisition quest has become never-ending.
Said he, "The pace of change in the last year – in the new media as opposed to traditional media – has been so colossal, if you stop, you tend to stagnate and stultify. The big question today is, how do you deal with Google, Yahoo, Amazon and eBay? Today, we work with Google and compete with Google, but what do you do, when Google announces that it is going to provide website research for nothing!"
Clear on the front that technology will get firsthand WPP attention, Sorrell delved a little on measurability too. "Measurability will become very crucial. We are doing more in the areas of market research and direct, interactive routes. Eventually, mediums will be more measurable. The fact is that investment decisions need a little bit of the judgement and intuition, backed by good statistics. At WPP, half our business should be in measurable areas."
Even though WPP is high on the non-traditional mediums and non-advertising areas, Sorrell still has faith in the traditional advertising industry, "We are a chameleon – we will try and provide our clients what they want."
As to what else he saw gaining ground in the time to come, Sorrell smiled, "Hopefully there will be more women leading companies as well!"