Having local sensitivity is critically important: Sir Martin Sorrell

Sir Martin Sorrell’s visit to India this time has been quite an eventful one. The WPP CEO was in India this week for the first ever board meeting of the advertising company in the country. As reported yesterday (October 17, 2017), CVL Srinivas has been given additional charge of WPP India Country Manager, where he will be taking over from Ranjan Kapur. Speaking on the role of Country Manager, Sorrell stressed on the growing importance of global and local management. “Having local sensitivity is critically important,” he affirmed. 

Optimistic about India 

While admitting that there is a lot of pressure on the industry from various perceived sources, Sorrell added that he remained very optimistic about India. “I remain an Indian bull and not an Indian bear,” he said, adding, “I would say, generally Brand India is in good shape. Under Prime Minister Modi, it’s got considerably stronger.” 

He particularly mentioned Indian companies like Tata, Reliance, Airtel, and Mahindra, which are reaching the top level on the international front and are becoming increasingly significant on the world stage. 

According to Sorrell, the global market’s view of India is one of progressive change and a country that’s on the move. “From an economic growth point of view, India in the next 15-25 years will be an even more significant force,” he added. 

Talking about the problems posed by government legislations such as demonetisation and introduction of GST, Sorrell said that there would be short-term dislocation when the government brought about change. “It’s called short-term pain for long-term gain.” 

WPP in India 

While commenting on WPP’s business in India, Sorrell pointed out that it was about half the size of their Chinese business, the growth has been steady. He said, “When I was last here 2 years ago, I was hoping that we would break through the $600-million revenue basis, which we did. This year we went through the $600 million-mark, which is a remarkable achievement for all our businesses here.” He further said, “I have been coming to India since 1987, and the quality of people that we have here is outstanding. We have about 15,000 people here.” 

Facebook, Google and other disruptive factors 

Among the “perceived sources” exerting pressure on the advertising business are internet giants like Facebook and Google. But in relation to that perceived disruption, Sorrell considers Facebook and Google less ‘frenemies’ today than when he was in India 2 years ago. He maintained, “In fact, I would describe them as flexible friends now, in that we are now working more closely with them”, and added that the public stance taken by Facebook and Google is that they are tech companies. 

Addressing the second big disruptive factor – consulting companies – Sorrell asserted that he did not consider them major threat. To put things in perspective, he mentioned Accenture, which has a market capital of $85 billion (compared to WPP’s about $25 billion). The next biggest in the industry is Omnicom, which is about $17 billion and so on. 

“In the digital areas, the nature of their businesses is very different. They are certainly in the digital transformation business, but let’s get the numbers right –to feed that beast, you need very big projects...Accenture’s revenues are around $32 billion-$33 billion, as against WPP’s revenue of $20 billion,” he pointed out. 

“The sort of projects that the consultancies are looking at are not the projects that we (in the digital area) nor our direct competitors (in the digital area) are directly involved in,” Sorrell further said.