Letters from Moscow — WPP Chairman Martin Sorrell Sets Tone for Industry Future at IAA World Congress


RETURN TO INTERNATIONALIST HOME PAGE	WPP Chairman Martin Sorrell Sets Tone for Industry Future at IAA World Congress Moscow, Russia—May 12, 2010 Sir Martin Sorrell addressed the 42nd IAA World Congress today by focusing on the event’s theme of "Change: Consequences." Twelve hundred delegates from 45 countries gathered at the Kremlin to consider key issues about the future of the international advertising and marketing industry. Sorrell discussed how the advertising world had come through four distinct phases since the autumn of 2008, which he characterized as "staring into the abyss," "becoming less worse," "small growth" and now finally beginning in April 2010 as "ratcheting up." However he emphasized to delegates that "The world is moving at different speeds. We must become accustomed to the fact that growth is very different in different parts of the world." He added that Russia is "front and center" with the other fast-growth markets like China, India and Brazil, and well as the Next Eleven, or those countries identified by Goldman Sachs as having the greatest economic potential in the 21st century. (They include: Mexico, Nigeria, Egypt, Turkey, Iran, Pakistan, Bangladesh, Indonesia, Vietnam, South Korea, and The Philippines.) "The parts of the world that are going to grow fastest are Asia Pacific — (less Japan/Australia), Latin America, and the Middle East and Africa. The World Cup will change Africa from a Continent of Challenge to a Continent of Opportunity. We’ll also see the Decade of Brazil and Latin America given the 2014 World Cup and 2016 Olympics Games in Rio." According to Sorrell, the biggest change, though, is the turnaround in the United States. "I cannot remember an economy shifting gears as rapidly as the U.S. In just 90 days we saw a 10 point swing in budgets. Never write off America. Increasingly the world economy will be about the US and China with other countries playing important roles." Sir Martin Sorrell also outlined WPP’s three-pronged emphasis moving forward: NEW MARKETS He expects to see one-third of the group’s revenues to come from BRIC and N11 markets in the next three to four years. (Today these markets represent 27% of WPP’s revenues.) NEW MEDIA Sorrell believes that clients will soon invest up to 20% of their budgets in new media. Once they achieve that level, he expects the goal posts will move again. CONSUMER INSIGHTS Business is not just about strategic thinking, but the application of technology and manipulation of data. Understanding the importance of consumer insight and behavior is critical to branding and marketing communications.

Martin Sorrell

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WPP Chairman Martin Sorrell Sets Tone for Industry Future at IAA World Congress

Moscow, Russia—May 12, 2010

Sir Martin Sorrell addressed the 42nd IAA World Congress today by focusing on the event’s theme of "Change: Consequences." Twelve hundred delegates from 45 countries gathered at the Kremlin to consider key issues about the future of the international advertising and marketing industry.

Sorrell discussed how the advertising world had come through four distinct phases since the autumn of 2008, which he characterized as "staring into the abyss," "becoming less worse," "small growth" and now finally beginning in April 2010 as "ratcheting up."

However he emphasized to delegates that "The world is moving at different speeds. We must become accustomed to the fact that growth is very different in different parts of the world."

He added that Russia is "front and center" with the other fast-growth markets like China, India and Brazil, and well as the Next Eleven, or those countries identified by Goldman Sachs as having the greatest economic potential in the 21st century. (They include: Mexico, Nigeria, Egypt, Turkey, Iran, Pakistan, Bangladesh, Indonesia, Vietnam, South Korea, and The Philippines.)

"The parts of the world that are going to grow fastest are Asia Pacific — (less Japan/Australia), Latin America, and the Middle East and Africa. The World Cup will change Africa from a Continent of Challenge to a Continent of Opportunity. We’ll also see the Decade of Brazil and Latin America given the 2014 World Cup and 2016 Olympics Games in Rio."

According to Sorrell, the biggest change, though, is the turnaround in the United States. "I cannot remember an economy shifting gears as rapidly as the U.S. In just 90 days we saw a 10 point swing in budgets. Never write off America. Increasingly the world economy will be about the US and China with other countries playing important roles."

Sir Martin Sorrell also outlined WPP’s three-pronged emphasis moving forward:

NEW MARKETS
He expects to see one-third of the group’s revenues to come from BRIC and N11 markets in the next three to four years. (Today these markets represent 27% of WPP’s revenues.)

NEW MEDIA
Sorrell believes that clients will soon invest up to 20% of their budgets in new media. Once they achieve that level, he expects the goal posts will move again.

CONSUMER INSIGHTS
Business is not just about strategic thinking, but the application of technology and manipulation of data. Understanding the importance of consumer insight and behavior is critical to branding and marketing communications.