NEWS: Clients set to cut costs, Sorrell warns

Martin Sorrell, the WPP Group chief executive, has warned advertising agencies to be wary of budget cuts as major clients look to screw down their costs.

Martin Sorrell, the WPP Group chief executive, has warned advertising

agencies to be wary of budget cuts as major clients look to screw down

their costs.



He also spoke this week of a prevailing ‘climate of fear’ in which

consumers are becoming more value and price conscious and clients are

becoming increasingly tentative about their decision-making.



Sorrell’s comments came during a management seminar, Relationships,

Relationships, Relationships, to mark the launch of the Periodical

Publishers Association’s Business Magazines Week.



Addressing the seminar in a wide-ranging speech, Sorrell spoke of a

series of threats, challenges and opportunities facing the advertising

and marketing industries.



He said: ‘We have already seen cost-cutting and a drive for cost

reduction. But we will see progressive attempts by our major clients to

reduce costs.’



Sorrell went on to claim that many clients believe that the bigger the

agency, the less creative it is. He called on large agency groups to

share resources more widely to counter that negative image.



He continued: ‘There will be increasing polarisation between about five

agency groups: WPP, Omnicom, Interpublic, Leo Burnett and Young and

Rubicam and smaller companies, like the Wieden and Kennedys and the

BBHs.’



He added that acquisitions will become more important to WPP agencies in

the future.



Sorrell also warned that management consultancies are stealing agencies’

thunder. ‘They have exhausted themselves on the supply side, and they

are now focusing on the demand/marketing side,’ he said.



Topics

Become a member of Campaign

Get the very latest news and insight from Campaign with unrestricted access to campaignlive.co.uk , plus get exclusive discounts to Campaign events

Become a member

Looking for a new job?

Get the latest creative jobs in advertising, media, marketing and digital delivered directly to your inbox each day.

Create an alert now

Partner content