Brand India is in much better shape than Brand US or Brand UK-Aug 20, 2011

Brand India is in much better shape than Brand US or Brand UK

Sidhartha & Vikas SinghSidhartha & Vikas Singh, TNN | Aug 20, 2011, 06.32AM IST


Congratulations on England becoming world No. 1 in Test cricket," we greet Sir Martin Sorrell. His eyes light up. "Yeah, isn't that something? But why is your team playing so badly?" It's only after some animated discussion that we remember we're supposed to be interviewing him, not the other way around.

That's Martin Sorrell for you. At 66, the head of WPP, the world's largest advertising and marketing communication conglomerate , remains insatiably curious. He soaks up information and frequently responds to a question by posing two of his own. When he does speak though, it's with the practised ease of someone used to making long presentations, reeling off facts, figures and forecasts without ever feeling the need to refer to any notes.

He visits India often (" This is my 30-something visit,") but says he is, at best, "a 72-hour expert" on the country. But he's categorical that Brand India is still an attractive story. What about concerns related to corruption and the government's handling of Anna Hazare's campaign? "I believe in the medium term, it will make things better. Actually, I think it is Advantage India. Brand UK does not look very pretty after the riots. Brand America does not look very pretty after the Congressional vote (on the debt ceiling)... India remains the world's fastest growing democracy. That's a pretty good positioning ," he says.

"Besides, would you really like to turn the clock back to 1990-91 ? Sure, you have the challenge of making growth more inclusive , but that's a good problem to have, as opposed to not having any growth. If I had to prepare campaigns to market India, the US and Western Europe, India would be the easiest and Western Europe the hardest to pitch," he adds.

Having held a series of meetings with clients since he arrived in India on Tuesday , he says corruption is a concern in several countries from China to Russia and Brazil but what the investor looks at is growth rate. "If India grows at 7%, WPP's organic growth in India will be almost double , 10-15 %," says Sorrell.

"This will add about $75 million in revenues . That's more than what many of our competitors here earn in a year." For WPP, a dominant player in the Indian advertising market, revenues from India add up to around $450 million (over Rs 2,000 crore), and are projected to cross the $500 million mark this year. China is double of that. So which market is he betting on? "Both," he says promptly. "I am an unashamed India bull, just as I am bullish on China. And on Brazil and Russia too."

How would he have advised the government to counter the Anna campaign? "Well, I don't have enough expertise on India to specifically answer the question. But, in general, the natural instinct of any bureaucracy-government or corporate -is to withdraw instead of engaging. You need very very short chains of command so that you can move 180-degrees in a very short span of time." Listening to him, you begin to understand just how he pushed through a series of audacious acquisitions-from J Walter Thompson in 1986 to Grey Global more recently-to convert WPP from being a little-known wire baskets manufacturer into a $4.5 billion giant.

Sorrell lists six pressure points for the world economy - the European debt problems , the US deficit crisis, rise in commodity prices, the tsunami-induced problems in Japan, the crisis in West Asia

and the stimulus withdrawal in the US - with the last being the main trigger for problems. "You can't just go off
steroids without feeling some pain," he quips. But he says ad budgets have not been cut just yet, while acknowledging that there could be some threat next year.

"Revenues only really started to decline during the first half of 2009 following the Lehman crisis of September 2008," he points out.

Still, Sorrell is optimistic that with the London Olympics, European football championships and the US presidential elections due in 2012, ad spends could rise by 1-2 % from the budgeted level of $500 billion . The US presidential elections could alone result in around $4 billion flowing into the system.

What are his thrust areas? "Emerging markets, new media and consumer insights ," he says promptly. While new markets and new media account for about 30% each of WPP's revenues, consumer insights account for around a quarter of the business . The plan is to scale up the share of the first two to 35-40 % each. He acknowledges that new media contributes a far smaller percentage in India right now but says that could change quickly as smart phones and tablets catch on and improve internet penetration.

"The rise of social networks will catalyse changes in consumer behaviour and attitudes in ways that are still not fully understood ," he warns. "And for many established players, it will be like trying to change a plane engine in mid-air while keeping the aircraft flying."

He's often been derisive about small boutique firms, but they still seem to be going strong? "Well, people love David vs Goliath stories," he responds. "My concern about small outfits is that many of them tend to be here today, gone tomorrow. Being small has its own disadvantages. And I think there's a tendency to dismiss knowledge, experience and resilience, which the established players have. The ideal situation, though, is to have the resources of a big entity and the nimbleness of a small player. It may seem confusing, but the 21st century ain't for tidy minds."