WPP's Sorrell Talks Emotions, The Economy, Obama
New markets, new media, consumer insight, and a method to better communicate ideas internally that WPP CEO Sir Martin Sorrell refers to as "horizontality" will become the advertising conglomerate's focus in 2013.
Sorrell kicked off the Intel Capital Global Summit Monday evening on a semi-positive note, providing insight into economic conditions during the next couple of years to the hundreds of entrepreneurs and portfolio company execs in attendance, such as Jun-ichi Okamura, CTO of Trigence Semiconductor, who came to the event from Tokyo to network.
"Emotionally," Sorrell said, the economy seems a bit better in recent days, but "realistically" there's still much uncertainly, pointing to the U.S. presidential elections, for example. "It's highly likely Obama will win the election," he said, predicting that the U.S. government would have a majority Republican House of Representatives, and a Democratic Senate.
For WPP, new markets bring in 30% of the company's $72 billion in media billings, Sorrell said. He defined new media as the five-legged stool: search, video, display, social and mobile, and pointed to Google, Facebook and others in Silicon Valley as new media owners masquerading as technology companies.
WPP's financial objective puts new markets and media contributing about 35% of business within the next four to five years. He expects 2013 to remain a challenging year -- but potentially, WPP's revenue should grow between 4.5% and 5%, excluding any impact on currency and acquisitions, Sorrell said. Based on improving economic conditions, 2014 will be different.
"While in China a couple of weeks ago, we heard from people connected with the World Bank who said they will take down the GDP forecast for this year and next year," Sorrell said.
Sorrell called attention to nine trends, starting with the shift to Eastern, Southern and Southeast countries, such as China, India, Brazil, Africa and the Middle East. He named a talent shortage as a result of lower birth rates and decrease in family size, increase of disintermediation from low-cost business models, growth of big retailers, importance of internal communications with companies, global and local structures, rise of finance procurement power, greater consolidation, and growth of government.