Slowdown in India opportunity, not threat: WPP's Sorrell

Martin Sorrell, the chief executive officer of WPP, is puzzled at the downbeat mood in India. The 67-year old advertising guru sees the economic slowdown in India as an opportunity rather than a threat, reports CNBC-TV18's, Animesh Das.

India's economic growth has slowed down and companies are cutting back on advertising spends. However WPP chief Martin Sorrell continues to be an India bull. With 10 percent growth, WPP India, he says, has had a good year and expects revenues from India to touch one billion dollars by 2018. Martin Sorrell, chief executive officer, WPP, said, "We could compound at somewhere between 10-15 percent. This year, a lot of people would say it has been an average year, I think it has been a pretty good year for us, it will be 10 percent. A good year might be 15 percent, if I was being a little bit more expansive. If one could say 10-15 percent, then you are talking about 6-7 years as being the target." In a year that saw rival American holding company Omnicom acquire ad-agency Mudra and independent hot shop Taproot sell out to Japanese giants Dentsu, Sorrell says that valuations have been pushed to unrealistic levels. "The problem with earn-outs is that you buy your own goodwill. If there is any synergy between the company that comes into the group and your group, you end up increasing the profits of the company that you are buying, and you are paying a multiple on that increase. So every-time you do something positive, you pay something more. So, there is a limit, to what you can do economically. That's why I said economically, it's unviable", he added. While he may not be too perturbed by competition or the current slowdown, the ongoing lawsuit with NDTV against TV ratings agency TAM, which is jointly owned by WPP and Nielsen, is a bother. Public sector broadcaster Prasar Bharati has also moved the Competition Commission of India, accusing TAM of abusing its dominant position. Sorrell said, "We are totally transparent in terms of the way it operates, and its fine. We will answer all questions or inquiries. No problem at all." Meanwhile, Sorrell is waiting for the New York Supreme Court's verdict on December 14. That's when the court will decide on the complaints filed against WPP and its affiliated companies.