Sir Martin Sorrell has said that the challenges faced by newspaper and magazine publishers ‘is getting greater and greater’ as internet advertising continues to grow and accelerate.
Speaking to the
Independent Review, the chief executive of the world’s second largest advertising and marketing services group WPP said, he is intrigued by the forecasts about interactive advertising in the United States overtaking magazine advertising by 2007.
He warned: “I think the challenge facing paper publishers – newspapers and magazines – is getting greater and greater. I read less weeklies and less fortnightlies. I don’t get my ‘market close’ from the FT anymore – I get it from Bloomberg the night before. Can I wait for Fortune or Business Week or The Economist? The answer is probably ‘no’.”
Research that Sorrell could be referencing is a new report out this month from Jupiter Media which said that online advertising in the United States is set to overtake advertising in the magazine sector by 2008 as spending in this sector exceeds half a billion dollars (see US Online Advertising Will Surpass Magazines By 2008).
He also said that WPP would start to increasingly use the internet and interactive advertising campaigns, alongside all other available media outlets including direct mail and traditional television commercials.
Although notoriously pessimistic, Sorrell is very optimistic about the medium-term prospects about his industry and WPP, he said: “I feel pretty good about the business.”
Sorrell believes that ‘natural growth’ is behind all of WPP’s operating regions performing equally. Currently 45% of revenues are generated in the US, with Europe and Asia-Pacific producing 35% and 20% respectively. However, he wants equal thirds in future and believes this could happen.
WPP, along with French rivals Publicis and Havas has been linked to biddings for American group, Grey Global. According to reports, Sorrell has not yet decided whether he will submit a bid as he is waiting on the year’s final accounts being available (see Havas Chairman Confirms Interest In Bidding For Grey).
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