Sorrell Sanguine for 2008, Downbeat for '09

24 January 2008

LONDON: Speaking to BBC Radio's Today programme on Wednesday, WPP Group ceo Sir Martin Sorrell was in Panglossian mode about planet advertising's prospects for 2008. But he took a Cassandra-like view about 2009.

His reasons to be cheerful?
"We see 08 as still being a pretty good year, in fact better than 07, Beijing Olympics, fantastic Olympic Games in China, US presidential election political adspend of £3bn, European football championships."
And dolorous?
"We think the issue is more about 09, there is a political cycle kicking in now and in 09. The new president in the United States will have eight years and will do anything unpleasant in that first year of that cycle and we think there might be a slowdown in China after the Beijing Olympics."
Continued adland's highest profile: "We think the financial markets are signalling these things in advance. Whether there will be a recession or not, I'm not quite sure. I think there will be a slowing down... I think the issue will now be about inflation.
"The Fed cut yesterday, which was out of cycle, and severe, much more severe than people thought and will indicate that inflation will grow and that will push the problem into 09 and I think that's when the rubber will hit the road."
But there's little doubt as to where Sorrell will be directing WPP's attention (and investment) over the next few years.
"What we are witnessing is a major power shift, and it is very uncomfortable for people in the United States and in western Europe, including the UK, to come to terms with this. If India and China have been on the wrong side of history for 200 years they will be on the right side for the next 200 years.
"We are betting WPP's future on [the fact] that 85% of our business comes from outside of the UK. Twenty-five per cent is now coming from Asia, Latin America, Africa, Middle East, Central and Eastern Europe.
"These are the growth drivers for our clients' businesses and therefore our own business and it is very difficult for the establishment in the west to get their minds around it."
WPP's money has already been put where Sir Martin's mouth is. It was announced yesterday that WPP's had acquired Hong Kong-based digital network Agenda Group – the latest in a series of Asian acquisitions through 2007.

Data sourced from BrandRepublic (UK); additional content by WARC staff