Indiantelevision.com Team

(18 July 2007 11:00 pm)

MUMBAI: "Our policy for India is expansion," was WPP group chief executive Sir Martin Sorrell's opening statement at a press gathering during his annual visit to India. "WPP's growth in India is in excess of 20 per cent, which accounts for $250 million of the company's total $11 billion revenue for 2006 - 2007."

Eyeing India as a key growth market in the Asia Pacific region, Sorrell said that this revenue growth formed a good base for the company's expansion, the key driver of this growth being the domestic economy. Though he believes that India is "under advertised and under branded," he cited the 'Iron Law' by which GDP growth impacts the industry. Sorrell says, "If India's GDP is growing by nine per cent, then the growth of the advertising and marketing services will double that."

While the company is bullish in the region and has previously spoken of plans to acquire new businesses, Sorrell however emphasized more on the company's organic growth in India and other fast growing markets as opposed to WPP's acquisition plans.

However, he did admit to several ongoing talks for acquisitions saying that in the realm of new media, WPP would have stake interests and for traditional media wholly acquire through the VC (venture capital) route. "But organic growth is the prime driver for the company," he avers.

Sorrell highlighted that two key opportunities had to be addressed as part of their global agenda or else they would turn into threats for the company - that of geography and technology. The objective is to tilt the ratio of revenues from the US, Western Europe and the fast growing markets including Asia Pacific, Latin America, Eastern Europe and Africa from 40:40:20 to one third for each of these three regions.

Among these key growth markets he laid importance on three - Indonesia, Vietnam and Pakistan, calling them the three 'Tigers.' He has also scheduled to visit these markets on this trip. Additionally, he also eyes Bangladesh as an important growth market as well. According to the company's annual report, the Asian business is two and half times bigger than that of its closest competitor.

Addressing the issue of technology, at a global level WPP has to aggressively embrace new technology like the internet, mobile, video communication and social networking by making significant investments in these areas. "25 per cent of WPP's business already comes from digital technology. We want to up those figures to one third," Sorrell said.

"Our digital capabilities in Asia and India are already quite strong. However, we will continue to heavily focus the digital arena," says Sorrell. The large Indian mobile subscriber base of 180 million provides an attractive opportunity for the company here.

As for the recent buyout of 24/7 Real Media in May this year, the global digital marketing company already has a joint venture agreement with a WPP agency, Dentsu, which it is looking to extend in India. "India poses an interesting opportunity for 24/7 Real Media in the region," adds Sorrell.
He said that the differentiator for WPP from its competitors Google and Microsoft, which have also acquired digital companies, is in their application of new technology. Asia is particularly advantageous to Sorrell as he believes Google has not yet penetrated so far in the region.

In the course of its global expansion into the digital space, the company is also challenged by the growing potential of traditional media especially in India. "While we are looking to embrace digital technology, the difficulty lies in the ability to maintain a balance between traditional and new media," he concludes.

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WPP chief Sir Martin Sorrell on 4-day India visit; to review businesses