KEY POINTS:
Michael Grade, the chairman of ITV, Britain's major independent TV network, calls Sir Martin Sorrell "the sage of Soho", a reference to his frequent proclamations about the advertising industry and the health of the global economy, but Sorrell laughs at his new nickname.
"I'm not a sage, and
I don't reside in Soho," he objects, with good humour. In fact, WPP, the global advertising empire he runs, is based in an understated office in a quiet corner of Mayfair. However, with businesses in 106 countries and a client list including 340 of the Fortune Global 500, Sorrell is better placed than most to take the world's economic temperature.
The prognosis is not good - Sorrell has said many times that 2009 will be a bad year - but neither is it disastrous.
"Asia, with the exception of Australia and Japan, continues to grow"; "the Middle East is healthy"; "Latin America, where I am now, is pretty good"; and "even if China's economic growth halved, it will still be growing at 5 per cent". It is only "western continental Europe and America" where there is "a little bit of pressure".
"People are becoming more and more concerned about the state of the US economy. Every day the problems seem to intensify. It will be a tough 2009. It will get better in 2010."
Sorrell speaks with the authority of a man who has built a global marketing firm from the ground up - buying big names including ad firms J Walter Thompson and Ogilvy and Mather.
Sorrell, 63, is in high spirits, despite the deepening economic gloom, with the prospect of adding yet another company to the 300 or so he has acquired since 1985.
The company is engaged in a takeover battle for research company TNS, which had agreed to a cosy merger with a German rival, GFK, before WPP scuppered the deal by tabling a hostile £1.1 billion ($2.89 billion) bid this month.
That has sent GFK back to the drawing board, trying to raise money for a counter-bid, but it has yet to find a partner to help fund an offer. Some who have expressed interest in stumping up cash, including German billionaire Gunter Herz, will probably want a say in how the company is run in return for their investment.
That is not a request GFK's chairman, Hajo Riesenbeck, or chief executive Klaus Wubbenhorst, want to accede to, Sorrell claims, and the two men are at loggerheads anyway.
Sorrell is revelling in GFK's discomfort, pointing out that 10 days ago it announced it had finance for a bid, then retracted the statement; it denied there would be job cuts in Germany if it bought TNS - but told British investors it would get rid of more than 500 positions.
"Now if they're going to make an offer, the leverage they'd have to put in would be so colossal they would have to get rid of even more people. Some industry sources suggest Sorrell is mischief-making, trying to destabilise a competitor by forcing it to raise its bid. That is mischief-making in itself, Sorrell insists.
Advertising is a highly cyclical business, but market research is appealing because business does not fall off a cliff in a downturn.
"It's untrue to say that any business is non-cyclical. Once people start saying that, you know you're in trouble." But he concedes that the industry benefits from what he calls "a dampened cycle" - benefiting less in an upturn, but not suffering as much in a downturn - and that could be crucial in the difficult years ahead.
In 2009, there will be a hangover from the Olympics; the following year the football World Cup will take place in South Africa, accompanied by an advertising splurge that will thereafter fizzle out.
In the US, "a new President will have to deal with the legacy of the Bush administration. If they're going to raise taxes or cut spending, it's better to get it over and done with quickly". Despite the growing contribution burgeoning superpowers such as India and China make to the global economy, the US remains its driving force, he says. "If America sneezes we might not get pneumonia, but we will still catch a cold."
He remains confident that his company will escape relatively unscathed: "We go into this recession - not recession, slowdown - with 25 per cent of our revenues in the fastest-growing markets."
Sorrell says the world's most powerful business leaders are feeling pessimistic. He was in Idaho last week at an annual summit of media executives that has taken on near-mythical status in recent years.
"I got there late. I arrived for the tail end of it," he says, but Bill Gates was still there, rubbing shoulders with Rupert Murdoch who, Sorrell says, "is quite gloomy". So too is Warren Buffet, the well-known septuagenarian investor who has lived through many recessions. "He did say he thought things had deteriorated since June 1," Sorrell reflects.
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