ISBA Conference: Sorrell shares worries over growing US clout

The communications business is not becoming globalised but Americanised as powerful US companies tighten their grip on it, Martin Sorrell, the WPP chairman, warned delegates at the Incorporated Society of British Advertisers conference last Thursday.

The communications business is not becoming globalised but

Americanised as powerful US companies tighten their grip on it, Martin

Sorrell, the WPP chairman, warned delegates at the Incorporated Society

of British Advertisers conference last Thursday.



Fuelled by the world’s most powerful economy and highly valued in Wall

Street, US groups have been able to pursue aggressive acquisition

programmes, Sorrell said.



And he warned: ’As long as this persists, the US-based global companies

will be at a considerable advantage.’



Not even the growing importance of Latin America and the Asia Pacific

region has shifted the balance of power, a situation that is worrying

UK-headquartered groups like WPP, he claimed.



The fact that the US financial giants, Morgan Stanley and Goldman Sachs,

between them now handle more than half the world’s merger and

acquisition activity underscores the trend.



Sorrell argued that what was happening was not globalisation but the

growing domination of many countries by US companies and the

co-ordination of more global business from North America.



As a result, about two-thirds of the world’s adspend is influenced by

the US in general and, in particular, by companies run from New York,

Chicago and Detroit.



Sorrell claimed that non-US companies are also finding it much more

difficult to compete because creative people are no longer reluctant to

work for US multinational groups.



Meanwhile, Sorrell warned that the globalisation issue was throwing up

another problem for communications groups which, like their clients,

were having to undergo major structural change.



’We at WPP are not one big, amorphous company,’ he said. ’One of our

agency networks has 6,000 employees, another subsidiary has just four.

We want the benefits of size without the inflexibility and bureaucracy.’



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