WPP boss Sir Martin Sorrell has spoken out against politicians and business leaders for celebrating economic recovery when the market is “less worst” rather than growing.
Speaking to Bloomberg at the annual World Economic Forum, Davos, Switzerland, he said “you can’t declare victory until you see consistent gains year-to-year.”
Delegates at the PRCA and CorpComms Conference last October received the same message when Sorrell delivered the keynote.
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Journalists apparently hung on to Sir Martin Sorrell’s every word at the WPP Q3 results announcement on Friday. Not to hear that WPP report revenues of £2.01 billion for July to September (up 6.7 per cent on the same months last year) but to learn the adman’s latest thinking on the shape of the recession.
They weren’t disappointed. Sorrell reckons that we are set to experience an “LUV”-shaped world economic recovery:
Delegates attending this year’s PRCA and CorpComms Conference had the benefit of hearing Sorrell’s wisdom three weeks earlier – which is no surprise given that its based on a blog post from July by Stella Dawson, Thomson Reuters’ Treasury Correspondent.
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PR used to be the first marketing discipline to be cut in a recession. But no longer.
According to Sir Martin Sorrell speaking at the PRCA and CorpComms Conference in London today, the PR industry is being driven by the opportunities presented by digital media.
PR has also benefited from the political focus on polling and insight he said.
Sorrell pointed to successful campaigns in the US such as the Clinton and Obama campaigns which focused heavily on a strong communication strategy.
Harriet Green, CEO of electronics distributor Premier Farnell and one of the FT’s Top 50 Women in Business said that this should be a “golden age for PR”.
“Digital leaves a footprint that can be measured,” she said.
Green shared the example of Element 14, Premier Farnell’s community of engineers that launched in June and connects the business to 17,000 customers, delivering insight to the business.
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WPP boss Sir Martin Sorrell speaking at the PRCA and CorpComms Conference in London today spotlighted the issue that all marketing agencies face: pitching for free.
“The RFP process is still a long process and it’s all for free. WPP has participated in a pitch for a piece of work recently invoicing four major groups all for [no cost to the prospect] and in one global pitch recently we delivered a 36,000 page document,” he said.
But Sorrell said the situation is unlikely to ever change due to over capacity in agency land.
“There will always be competitors that are prepared to [pitch] for free,” he said.
Sir Martin Sorrell was first to take the platform today and share his experience of the current climate for marketing services at the PRCA and CorpComms Conference at Mill Bank Tower, London.
“I don’t see a recovery. I’ll declare victory when year-to-year revenues are better, not less worse. Confidence needs to transfer into cheque signing,” said Sorrell.
“PR will be down like-for-like in 2009,” he said.
PRCA chairman and Ketchum boss David Gallagher was more upbeat.
“Although there is still a quarter to go, member agencies are reporting anecdotally that 2009 will either be flat or slightly up,” he said.
“It feels better and we may be more confident but we’re not yet out [of the recession]. There is no lift in the top line. Like other agencies we are controlling our costs effectively,” said Sorrell.
As global economies emerge from recession Sorrell urged agency leaders to head East.
“There are no growth prospects in Western Europe and the US. Asia and India are the markets that offer the greatest potential for growth,” he said.
In addition to developing its geographic reach WPP under Sorrell’s leadership is focussed on increasing its digital reach from 25 per cent to a third of the business – and build its consumer insight expertise.
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