Media Mammoths Look East for Northbound Profits

06 October 2006

SYDNEY: GroupM, the planet's largest media planning and buying entity, has unveiled plans for largescale expansion in the Asia-Pacific region - the 21st century's version of Eldorado.

Over the next five years the WPP Group-owned business, which incorporates Mediacom, MindShare and Mediaedge:cia, aims to surpass $11 billion (€8.67bn; £5.84bn) in annual media placement within the region, thereby doubling revenues and profits.

Speaking to the Sydney Morning Herald, GroupM's Asia-Pacific chairman/ceo John Steedman said he expects growth Down Under to better 40% over the period..

But Steedman's eyes are wandering further afield.

"The region is powering along, in particular China, India and the Indonesian advertising markets, which are all growing upwards of 25%, [while] China will surpass Japan's ad market in four years. Our objective in this region will be to double our revenues and profits by 2010.

"At least 30% of those revenues will come from specialist units. That's anything from content development to sport sponsorship to business science and street promotions and sampling," he said.

These growth targets suggest that GroupM will need to recruit another 3500 people over the next four years, almost doubling the total number of staff in the region to 8000.

Currently there is much clear blue water between the WPP firm's position in Asia-Pacific and that of its rivals. However, Steedman admits that competitors are moving quickly to narrow the gap.

"They're not far behind us but we've got the leap on them," he says. "We're far more advanced in our diversified offer than anyone else at present and we intend to fast-track developing those specialist areas because that's where we see our growth coming from."

One such rival, Aegis Media - whose stable includes Carat, Vizeum, Isobar and Posterscope - aims to close the gap with GroupM. "We have targets to double our income by 2009. We want revenues from our specialist divisions of 40%," says Richard Halmarick, Aegis ceo for South Asia.

Hong Kong-based chief executive for Omnicom Media Group, Mike Cooper, is of like mind, albeit reluctant to divulge specific growth targets.

But he makes no secret of the fact that one of OMG's main objectives in the Asia-Pacific region is to "grow ahead of the market rates in the region. I can't say it's a radically different approach [to GroupM]."

Data sourced from Sydney Morning Herald; additional content by WARC staff