• by David Goetzl  @dgoetzl, July 9, 2009

WPP Group CEO Martin Sorrell steered clear of suggestions that the worst is in the rearview mirror, offering a bearish outlook on the economy and ad market this week. One reason: the Obama administration's economic-recovery package may not have produced anticipated results so far. "I think there is a bit of a feeling that the fiscal stimulus [that] has been put into place -- as yet -- is not working," Sorrell said in an interview on CNBC.

"Generally, I think the feeling on both sides of the Atlantic," he added, "[is] that things are not going quite as right as people thought they were when the stock market started to move a few months ago."

Sorrell said he believes there is a growing sentiment -- which he expects to be echoed at the current G8 summit -- that "there is a need ... for a little bit more" in terms of a government-sponsored economic injection across the Atlantic. Sorrell is attending the Allen & Co. conference in Idaho with other top media executives.

As for the ad market, he said there has been "no real recovery yet." Business in April and May has been worse than it was in the January-March period. Sorrell said figures for June have not come in, "but I doubt whether we'll see the pattern change."

While some other media executives have suggested the bottom has either been hit or is in sight, Sorrell said: "The general feeling is a little more downbeat than it was a few months ago." He suggested 2010 could bring an "anemic mild recovery," while he tiptoed into a prediction that the second half of this year would top the first.

WPP, he said, is girding for what may be an even longer-term downturn by seeking growth from expanding its digital operations, buttressing its businesses in emerging markets and building up its research segment.

About one-quarter of the holding company's business comes from its digital operations, which Sorrell said he hopes will rise to one-third or more. Emerging markets account for a bit more than a quarter (27%) now.

As for research and consumer insight, where WPP acquired TNS last year, he said: "We think clients are very focused, particularly in these difficult times, understanding what consumers ... are thinking about, what we are driven by or not driven by -- trying to understand that in better detail."

WPP spends $850 million a year buying search ads on Google, Sorrell said-- adding that the business is less expensive than "old media," making it enticing to advertisers. But "we still don't know from a measurement point of view how much more effective [it] is or not."