NEW DELHI: India will be one of the key future growth markets for WPP Group, the world's biggest agency holding company by annual revenue, according to Sir Martin Sorrell, its chief executive.
WPP currently derives around $400 million (€281m; £245m) in sales from its activities in India, 60% of which is attributable to its advertising operations, and 40% to its digital, PR and healthcare divisions.
It currently has 8,500 employees in the Asian nation, and Sorrell predicted the company's performance in the country "will not dip" despite the downturn.
While some forecasts predict Indian adspend will fall this year, Sorrell argued revenues will improve by between 3% and 5%, with opportunities for growth in branding and advertising, both of which also have substantial room for development going forward.
"Although India has been affected by the recession, the country is well on its way and will be at the forefront of economic growth in the future. While America will continue to be strong, India and China will catch up," he suggested.
WPP's ceo said its "base in India has always been very strong and that comes from both acquisitions as well as organic growth. However, at this point, we are mainly focusing on organic growth."
Despite this, the London-based firm remains "avaricious and carnivorous" for further purchases, having recently acquired Ray & Keshavan, a design company, and Quasar, a digital agency.
Indeed, Sorrell said digital media is "becoming very important" in India, and the fact the national market "has more than 400 million mobile phone subscribers and is the home to a large consumer base" also gives it a high level of strategic importance.
WPP is also placing a heightened emphasis on a range of other countries, not only in Asia, but in fast-growing areas like Latin America.
"We are building our growth strategies around markets such as India, China, Argentina and Russia. Also, we expect nations such as Iran, Bangladesh and Pakistan to become significant in a few years' time," said Sorrell.
"In India, China and Latin America, things are less severe; newspapers are revered, the role of the newspaper in India is stronger than any other place … but the pressure will grow. The recession has just emphasised that new media and new markets are important," he concluded.
Moody's Investors Service downgraded its rating for WPP to a status close to "junk" last week as a result both of the frailty of the global ad market and the high levels of debt linked to its purchase of TNS.
It cited "considerable revenue uncertainty", and the fact that WPP's research and insight operations are suffering in the downturn, as the basis for this move, although it added that WPP's important moves on cost savings and diversification remain on track.
Data sourced from Hindu Business Line, mydigitalfc, Wall Street Journal; additional content by WARC staff