“India is not a developing market. It is developed”

When Sir Martin Sorrell speaks, the advertising world listens. So, when the CEO of WPP, one of the world?s largest advertising and media conglomerates, says he is still bullish about the communication and marketing services industry, and India?s growth story is one of the major reasons for this optimism, it?s time to sit up.

?The last two years have been very difficult that started in August 2007 with the sub prime crisis. However, there are eight things which make me bullish about this business,? Sorrell had said at Ficci-Frames 2010, the three-day annual convention on the media and the entertainment industry held earlier this month.

Sorrell sees a massive shift in economic power to India and China. ?We in the west still don?t understand this shift. I believed that India was on the wrong side of history but is now on the right side,? said Sorrell. ?India is not a developing market. It is developed.?

Sorrell said that the next growth story for WPP will come from the BRIC (Brazil, Russia, India and China) nations of which India and China are ?faster growing?. Apart from these, the next 11 markets to watch out for include Indonesia, Vietnam, Pakistan and Iran. ?In the next four to five years, at least one-third of our business will come from this region,? he said.

Despite the pressure brought on by the economic slowdown in India, WPP India?s revenues saw 7-8% growth in 2009. ?Last year the top-line growth was down by 8% and it was in negative. In January-February 2010 revenues stabilised. But India was up quite strongly and saw growth,? said Sorrell. Digital advertising, which contributed 27% to WPP?s global revenues in 2009, is expected to contribute at least one-third of the total revenues in coming years. ?It will be mainly PC driven and mobile driven.?

The growth of the web is one of the driving forces for his optimism because ?web based companies are much more attractive to young people,? he said. He believes that the role of new media will be critical in the years to come, and gave an interesting example to illustrate this. The Barack Obama presidential campaign had used the digital medium very effectively for fund raising. But the campaign had also come out with 30-minute ads on television, across four networks. ?We are seeing the use of traditional media to sell new media,? he said.

Sorrell also sees positive signs in the fact that so many companies, especially those in the automobile sector that had gone into ?Chapter 11 bankruptcy? due to the recession, have recovered within months. But he also struck a warning note: In the coming days, while there will be no shortage in productivity, people and talent will be scarce.

Sorrell said that WPP as a group has focused on consumer insights, ?which is 26% of our business.? WPP has made considerable investment in this space because ?understanding consumer purchase habits is critical, especially after the recession?.

?Our business is about three things – strategic thinking, creative execution and distribution. And our business is about application of technology which is going to be critically important as the nature of our business has changed,? he said.

And for all of this, internal communication is important. He said, ?For a company like WPP which has grown by acquisition this is particularly difficult.? But nonetheless it is important to get people involved in the strategic changes and growth process of any company.