MARTIN SORRELL EYES GREATER SHARE OF CHINA AD MARKET

WPP Chief Also Plans Increase in Marketing Services Revenue

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NEW YORK (AdAge.com) -- WPP Group Chief Executive Martin Sorrell’s take on the future of the ad business boils down to this: China and the Internet.

WPP Group chief Martin Sorrell has a high intersest in the emerging advertising market in China.
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No. 2 holding company
Speaking today at investor conference put on by UBS, Mr. Sorrell, who leads the No. 2 ad agency holding company, emphasized the importance of expanding with fast-growing markets like China, India and Brazil, and in understanding technological advances such as personal video recorders and MP3 players that are rapidly changing the way consumers consume media.

In a wide-ranging speech that trod quickly over the most important features of the changing media landscape, Mr. Sorrell identified a few major objectives for WPP: namely, to improve its proportion of holdings in marketing services and in measurable offerings and to make its business in Asia a bigger part of its revenue pie.

Only 20% from Asia
Currently, only 20% of WPP’s business comes from Asia, while Europe and North America each are responsible for 40%. Mr. Sorrell said he wants the pie to be split in thirds by those major regions. The so-called BRIC countries -- Brazil, Russia, India, China -- are important not only because of population growth providing markets for goods but also because of the growing sway of global corporations based there.

Similarly, to take advantage of technological change, Mr. Sorrell wants to increase WPP’s revenue from marketing services -- a broadly defined genre that includes interactive agencies -- from 54% to 66%.

Role of traditional advertising
That’s wasn’t exactly a vote of confidence for traditional advertising, once a dominant source of revenue for holding companies, which now view media buying and planning, direct and customer relationship management, and PR as increasingly important.

“The greatest pressure is on brand advertising in the U.S. and Western Europe,” he said.

Times are also tough for traditional media, especially newspapers, magazines and TV, all of which are trying to deal with the proliferation of interactive media, as well as increased consumer control over how and when content is consumed. Because of those trends, outdoor and in-store advertising are growing, he said.

Despite that, Mr. Sorrell said, “TV is not dead and it will continue to be a major medium.”

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