• by Paul Gough , October 1, 2003

One of the world's largest advertising companies, WPP Group, plans to spend less time on advertising and more time on other marketing services, CEO Sir Martin Sorrell told analysts and investors at Goldman Sachs' Communicopia conference Wednesday morning.

It's not so much that traditional advertising services are growing less important, said Sorrell, as other marketing services such as public relations, research, consulting and healthcare are gaining more importance.

By 2014, Sorrell projected two-thirds of WPP's revenues would come from non- advertising services, up from 53% today. Currently, only 47% of WPP's revenues come from advertising services - including media buying and planning at its Mindshare and Mediaedge:CIA units, or creative services at its Ogilvy, Y&R and J. Walter Thompson units. The balance of the company's revenues come from units working in research (15%), healthcare communications (27%) and public relations (11%) consultancies.

Sorrell said he was especially keen on the growth of public relations, even though WPP's units in that area are still seeing negative growth. Citing recent news that Grey Global Group may sell its interest in public affairs consultancy APCO Worldwide, he said he wouldn't jettison any of WPP's PR agencies. Sorrell said public relations would become more important as time goes on, asserting that editorial coverage is more believable in the public's eye than advertising.

Sorrell took some other jabs at Grey, as well as rival Havas, questioning the long-term viability of both those WPP rivals. He said it was his opinion that Havas was falling into the same trap that Cordiant did about 18 months ago, with a strategy of taking one "loss maker" and putting it together with another one.

"If you do that, all you do is you get a bigger loss maker," he said.

He also noted that Grey had been "aggressive on pricing" its agency services and had "given away for free a 2 million Euro commercial to secure a piece of business."