Economic Times: October, 2015
New Delhi: Martin Sorrell, cheif executive officer of WPP, the world's largest advertising conglomerate, is betting big on India, he told ET. Edited excerpts:
While Narendra Modi is trying to build Brand India globally, several incidents at home have struck a discordant note.
I think to be fair that's the reality with any country. So in the US there are incidents, gun control for example. And you have another senseless slaughtering of innocent people in a school, then the immigrant crisis in Europe. The UK is a diverse community. The reason why the UK has been successful, particularly recently, is because of immigrants and yet we have this backlash against immigration.
So the point I am making is that there are always inconsistencies, particularly when you have a strong view or vision and there are always going to be problems. One member of the government said to me—"Why is it that the media focus on the negatives rather than the positives?" And I said that goes with the territory. The media is there to prick the balloon, to prick the bubbles and not necessarily support them. I don't think we should be unduly critical.
By the way, when this discussion comes about China and whether it's good that China is slowing down, it's not good for India if China is slowing down. What's good for India is if China is successful, India will be more successful because this "beggar thy neighbour" policy just doesn't work. The problem at the moment is that the world growth is slipping. Clients are very focused on cost.
So these incidents don't dampen investor sentiments in India?
To be blunt, you have the Vodafone tax case, which I think will get resolved favourably. You have the Maggi noodle case. You have the Nokia factory which was not transferred to Microsoft. We have a panel with some young entrepreneurs talking about the tendencies of companies to register their domicile in Singapore rather than in India because it is easier. All these things are negatives, but that doesn't destroy the positive. So look at the positives. The Indian economy is growing at a strong rate. Our business here is growing at 10 per cent. We are adding people, which is good for employment. We have 15,000 people here. If we continue to grow at 10 per cent, we will add another 1,000 jobs quite easy. And the odds are we will grow again by 10% next year. If you look at the BRIC countries, then India is the last man or woman standing.
There has been a tsunami of media pitches this year. What's the reason? What are clients seeking?
The primary reason is that if you look at media it is the biggest element on the P&L (profit and loss) in the income statement. So often clients tell me that you are the biggest supplier— I am not particularly keen on the phrase and we are not the biggest. Our fee is a small part of that. But look at the amount of money that flows through that and that's a big cost. Remember what I said— tepid growth, no pricing power, focus on costs, so it all fits into that.
What do you think traditional mediums, especially print, should do to stay relevant for advertisers?
Print is very difficult. In media, it is the most challenged. If I owned a newspaper, there would be two things that I would try to do. The content would apply across all platforms - TV, radio, outdoor, if you can get to it. The second thing is the editorial staff, the journalists have to learn not just to do media, but take your content and apply across all platforms. One of the few people to understand that is Rupert Murdoch.
Your revenues in India are currently at $600 million. From where do you think the next $600 million will come from?
It will come a little bit from acquisition, but mainly it will come from organic growth. The media market is growing at 12.5 per cent. There will be acquisitions, but they will be small. When you are growing at $60 million a year, you can't find a $60 million revenue acquisition here in India.