Sorrell Talks Up Local Clients, Organic Growth

WPP CEO Sir Martin Sorrell has extolled the virtues of organic growth; of helping ad budgets to follow consumers online; and of a balance between local and multinational clients, as he looks five years into the future of WPP.

Speaking at The American Chamber of Commerce in Singapore on Friday, and reported on www.marketing-interactive.com , Sorrell said that big multinational clients such as Ford, Unilever and P&G currently account for around 50 to 60% of WPP business.

'Nearly half of our business is made up of regional and national companies. I think you always need a balance between the two - there's no point being dominated by multinationals' said Sorrell, adding: 'Global focus is becoming more important, but at the same time local focus is also becoming more important. Whilst we won't see a return to the country managers of 15, 20 or 25 years ago, we will see the development of country managers in a different way. We're certainly experimenting with them at WPP and it causes tremendous matrix issues. Having people at a country level who understand who the best people are in the market, who the clients of the future are and who the potential acquisitions are critically important.'

He also talked of the power of organic growth over acquisitions: 'You might find this an extraordinary statement from me but acquisitions is not the best way to grow. Organic growth is always the strongest way to grow.'

Of the move to digital, Sorrell said he wanted non-traditional advertising to be at least two-thirds of the group's business in five years, and added: 'we're getting there.' He explained: 'We know that consumers spend 20% of their time online and we also know that our clients only spend 12 to 13% of their budgets worldwide online. That's a disconnect that has to be eradicated and in our view, it'll be eradicated in the next five years or so.'

Sorrell said CEOs and CMOs were feeling more cheerful about the recession than they were three months ago, but that the effect in real terms was limited at present: 'The head and the heart might be better but it hasn't sort of gone down to the hand which writes cheques yet.' However, he said the second half of the year would look better in reporting than the first half, as comparatives get easier.

Web sites: www.wpp.com , www.kantargroup.com , www.tnsglobal.com .

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.

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