Sir Martin Sorrell
2011 was a record year against almost all measures, showing just how far we have come from the dark days of 2008 and the Lehman collapse. WPP achieved like-for-like revenue growth of 5.3%, with gross margin growing even faster at 5.9%. The recovery was LUV-shaped, with the BRICs, Next 11 and digital regaining their greater prominence, and the mature markets and media slowing, hit by the Eurozone crisis and US budgetary deadlock.
The prospects for 2012 look similar, despite the maxiquadrennial impact of the UEFA Football Championships, Summer Olympics and US Presidential election. The following year could be more challenging, but 2014 may well be a different story if the new US Administration finally begins to tackle the deficit issue. In addition, it will be a mini-quadrennial with the Winter Olympics, FIFA World Cup and US mid-term Congressionals.
In summary, the long term looks reasonably good. WPP’s growth will continue to be driven by nine factors – globalisation, overcapacity and the shortage of talent, the web, retail, internal communications, central and local organisational focus, the rise of finance and procurement, the role of government, and sustainability.
A brand is routinely described as a product with added presentation. The product is said to be the bit that delivers: the taste, the function, the effect. And the presentation is there merely to attract the eye and distinguish the product with some ill-defined property called personality.
An examination of the placebo effect, demonstrated to exist over decades of pharmaceutical research, shows that this is a dangerously superficial understanding of the nature of a successful brand. Because of the far from fully-understood inter-relationship of mind and body, a well-known, well-presented brand will deliver more real satisfaction to its users than an anonymous, generic equivalent: and this is just as true for an analgesic as it is for a bottle of wine.