Speaking at the UBS investor conference, WPP Group Chief Executive Martin 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 media is consumed.
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: 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.
Currently, only 20% of WPP's business comes from Asia, while Europe and North America each are responsible for 40%. Mr. Sorrell wants the pie to be split in thirds by those major regions. 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%.
No vote of confidence
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.
Interpublic Group of Cos.' chairman-CEO, Michael Roth brought a little levity to the third-largest holding company's troubles during both of his addresses to investors. He gamely kicked off a 45-minute presentation at a conference held by Credit Suisse First Boston with a slide showing a boilerplate "Cautionary Statement" depicting all the usual warnings about "forward-looking statements" and so forth.
"I've been spending a lot of time with lawyers lately," he quipped.
Mr. Roth was referring to a six-month look into Interpublic's books, culminating in September when the company restated over $500 million in earnings over a five-year period. That, along with the loss of major pieces of business like Bank of America's integrated marketing work and General Motors Corp.'s media-buying account, dominated Interpublic's year.
In the first quarter of 2006, Mr. Roth is expected to give more details about how he plans to improve trouble spots like its media offering and Lowe Worldwide.
Interpublic's stock fell to a two-year low of $9.15 a share less than an hour before Mr. Roth made his presentation at another media conference, put on by UBS. There Mr. Roth said the past year had been "interesting," adding: "We would like to put 2005 behind us and focus on the future."
The stock ended the day at $9.28.
Contributing: Bradley Johnson