The Keys to Success

Sir Martin Sorrell, chief executive of WPP, gave a thought provoking address to the members of The Financial Services Forum at their annual dinner which took place at the Royal Opera House on 19th September. He outlined the key challenges that face companies in the 21st century – and some possible solutions.
Some of you may not know that 21 years ago WPP didn’t exist. We are now 95,000 people, if I include our associates, and 75,000 if I exclude them. We are in 106 countries, we have a market capitalisation income of $15 billion and revenues of $11 billion. Most importantly we buy about $50 billion of media around the world. One in four ads that you will see or read on the Internet would come from us. So we have about a 25% market share in most markets of the world.
There are three things that we are intent on doing over the next five to 10 years. They are equally important. The first is geographical. Today 40% of that $11 billion originates from the States, 40% is here in Europe and 20% is in Asia, Latin America, Africa, the Middle East and Central and Eastern Europe. Our objective in the longer term – in the next 5 to 10 years – is to have that equally distributed, a third in each major market.
Why? Two thirds of the world population will be inAsia by 2014 as opposed to the half as at the moment. So that’s number one. The second stems from the fact that we are not actually an advertising agency anymore. If anybody wanted to offend me they would call us an advertising conglomerate. I think we are a fairly focussed set of advertising and marketing services. We are half advertising – comprising brand advertising, creative advertising, media planning and media buying. The other half is in areas such as information insight and consultancy. This includes research, public relations and public affairs, in branding and identity, in healthcare communications, and last but not least, specialist communications – basically direct, interactive, Internet, which is becoming much more important. In the longer run, that is five to ten years, we would like two thirds of our business to be outside advertising, because the cost of television advertising, despite what has been happening to traditional media over the last couple of years, continues to escalate at a rate faster than general price inflation.
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