One of the most influential British advertising and media commentators has predicted a major upturn in the fortunes of media businesses throughout the world next year.
Sir Martin Sorrell, chief executive of the giant WPP group, told the World Association of Newspapers (WAN) conference that the Olympic Games and a US presidential election would be the main factors behind a global upturn. He was speaking to the 56th World Newspaper Congress at the RDS in Dublin.
However he told the 1,200 newspaper editors, executives and publishers that 2008 would represent the beginning of another boom period in western economies. Sir Martin is a widely respected figure in British media and advertising circles and his regular predictions about the economy carry huge weight in those two industries. Among the clients of his WPP group are Ford, Unilever and IBM.
However he warned media groups they must follow global demographic trends and try to tap into markets in Russia, China and Argentina. Sir Martin was among a group of speakers who emphasised to the conference the growing importance of Asian markets like China to media groups.
He said he was often described as a pessimist, but he favoured the phrase "serial realist" rather than "serial pessimist". He said while some of his presentation suggested good news was on the way, there would be no return to the explosive growth levels of the 1990s.
Sir Martin is credited as being the first media commentator to warn the early signs of recovery could just be "a flash in the pan". However he has modified this view in recent months.
In the short term he expected the advertising industry to grow, but at reduced rates compared to the 1990s. However he said 2004 would be a better year because of the European football championships, the presidential election in the US and the Olympic Games. He said all these events historically involved pumping more money into the global economy, particularly into areas directly related to media and advertising.
He said that while the US presidential elections might not appear to have a direct relevance to the global economy, they were linked. "No president goes to the country without a strong economy."
He said the reason he selected 2008 as the year for a major boom was the Olympic Games were due to be held in China and the government there had committed itself to spending $45 billion on infrastructural improvements. He said this would provide huge windfalls for western companies and stimulate economic activity around the world.
Sir Martin said the US and UK governments had run up huge deficits to fund the second Gulf War, but the war itself had a minimal effect on business which came as "a little bit of a surprise".
Television networks in the US were forced to spend $1 million a day covering the recent war and while this was costly, advertising had remained remarkably consistent.
Turning to the general economy, he said multinational corporations were not shrinking in scale, for example more people visited a Wal-Mart store each week in the United States than went to church.
Stressing that by 2014 two-thirds of the world's population would live in the Asia Pacific region, he stressed that companies needed to do more to target heavily populated areas.
After speaking to the conference Sir Martin refused to discuss a reported takeover by his company of another British advertising/public relations agency Cordiant.