WPP's knight foresees early dawn and many rising stars in the East

Sir Martin Sorrell is the most powerful Briton in the world of advertising. He tells Ian Burrell how his WPP Group will beat the downturn

(DAVID SANDISON / INDEPENDENT)

Sir Martin Sorrell sat before the Capitol as an invited guest at the inauguration of President Obama in Washington before heading out to JF Kennedy airport to catch an overnight flight back to London. He arrived at Heathrow at 9.30am, plenty of time in Sir Martin's world to go straight to a meeting and then brush up on the state-of-the-industry speech he delivered that same lunchtime to the International Advertising Association, gathered at the Mandarin Oriental Hotel in Knightsbridge.

We meet the following day, by which time Sir Martin has already been to Berlin and back to do a deal, and he shares his wisdom with The Independent in between client meetings, as his driver, Mark, ferries him back and forth across the capital in a Range Rover.

Chauffeur notwithstanding, what really drives Sir Martin is the ambition he has for his WPP Group, which employs 130,000 people in 106 countries, and is the second largest advertising and marketing organisation in the world. "When you found something, your attitude is different. I'm not a hired hand, I've not been brought in as the turn round artist and I didn't start off in one of the agencies and work my way up," he says, explaining the difference between him and his great rivals, John Wren of Omnicom, Michael Roth of Interpublic and Maurice Levy of Publicis. "We bought into Wire & Plastic Products (WPP) in 1985, a £1m company, and it's now £5bn, £6bn, whatever it is today on the market."

A billion here, a billion there, it must be difficult for Sir Martin to stay on top of an operation that is depicted on the wall of his Mayfair offices in a piece of African artwork adapted to include all the brand logos within the WPP empire. "There are really about 12 businesses there at the end of the day, it's not quite as messy as you'd assume. As companies grow bigger clients and people worry about what size means, so trying to keep the operation in some senses fragmented is important," he says, perhaps conscious of smaller rivals who claim to be more client-focused than the WPP behemoth.

It is an empire that includes such famous advertising agencies as J Walter Thompson (JWT), Ogilvy & Mather, Grey Global and Young & Rubicam, the PR giants Burson-Marsteller and Hill & Knowlton, and now the mighty market research operation Taylor Nelson Sofres (TNS).

Such has been WPP's growth that Sir Martin has found himself verbally attacked by rivals who, perhaps intimidated by WPP's scale, insist on referring to the English knight's stature. The hostile takeover of Ogilvy prompted advertising legend David Ogilvy to denounce him as "an odious little shit". Maurice Levy is almost constantly squabbling, this month describing Sir Martin as "a little Englishman trying to stir things up".

The WPP founder, 64 this month, seems to find the Frenchman's comment amusing. "Maurice Levy tends to lose it on many occasions. He lost it last year at Davos in the session we did on the American president where he said – hysterically funny – he said you can't market a country. Now I've seen he's saying you can do it. I've seen him lose his rag before at Davos at a private dinner. He tends to lose his cool."

To some, Sir Martin might be "stirring things up", but as the most famous figure in British advertising, he is regarded as a soothsayer for the whole of the media. He admits his predictions are not infallible. "I wish we had figured out [2009] was going to be so gloomy. We thought 2008 was going to be better than it turned out. It didn't turn out terribly, but it didn't turn out as well as we thought," he says of earlier comments that the Beijing Olympics, US presidential elections and European Championships would produce great prosperity in 2008.

Nonetheless, he remains more upbeat than most, predicting that early signs of improvement will emerge in the latter half of this year. "I think 2009 is going to be a very difficult year, but I think the second half is going to be less difficult than the first half," he says, adding that the "real world" of ordinary people will not see those benefits until 2010.

He hopes to steer WPP through the downturn by a strategy of developing the group's activities in the BRIC (Brazil, Russia, India, China) countries and the Next Eleven emerging economies, as well as focusing on both new media and insight into consumer behaviour. His desire for consumer insight explains the acquisition in October of TNS for around £2bn. "TNS had $300m of revenues in Asia, so it has expanded our position in Asia," he points out. "We are now the fourth largest information business in the world after Thomson Reuters, Bloomberg and Nielsen."

Countries such as Pakistan and Vietnam are worth investing in because "they are major population growth countries, with a growing middle class", he says, and last Wednesday WPP duly took a 20 per cent stake in SMJ, a marcomms company based in Hanoi and Ho Chi Minh City.

When he talks of his excitement for mobile phone technology he again references the East. "We think mobile is going to be phenomenally powerful, particularly in China, where there are 650 million mobile subscribers and 450 million on one network, and in India where there are 250 million subscribers and going to be 500 million."

Sir Martin rarely mentions the growth of China and India without respectfully pointing out the strong economic position of those countries two centuries ago. He is not a big history student, but is a close friend of the eminent historian Simon Schama, a school friend at Haberdashers' Aske's, the pair both heading off to Christ's College, Cambridge. Sir Martin joined the advertising industry, becoming group finance director of Saatchi & Saatchi when it was Britain's premium agency. In 1985, he invested in a wire shopping basket company, WPP, using it to acquire one advertising agency after another and stunning adland with hostile takeovers for JWT and then Ogilvy.

He has never slowed up. His office walls may be decorated with some stunning paintings by Bushmen from South Africa but they are more a reflection of WPP's global outlook than Sir Martin's wish to be seen as an art collector. Nor does he covet yachts and fast cars. His "addictions" are his Blackberry and his mobile phone.

"I get up in the morning, fairly early, and watch Bloomberg or CNBC. Then I read the FT and or The Wall Street Journal, not online, I look at the hard copy. But when I get into the office I always have Bloomberg streamed," he says. He will keep an eye on financial sites such as breakingviews.com and the FT's Lex. At home "I usually watch Newsnight if I'm in the UK and in America things like The Charlie Rose Show."

A lot of the time he is in the air. "I spend half my time in London and half in New York. I go to Asia as much as I can, five or six trips this year, and last year I went to Latin America twice. I use London as a stepping-off point for Europe, and I use New York as a stepping-off point for the States."

Recent cuts at Ogilvy are expected to be the first of thousands of jobs lost at WPP. Sir Martin says the company must go in search of economic growth, wherever that may be, and not be overly sympathetic about its interests in the West. "The natural instinct is to make the changes in the parts of the operation you don't know well, the far off places. But the simple fact is that it's those [far off] parts that are making a bigger and bigger contribution."

He is a great admirer of Rupert Murdoch's diverse approach to media. "He sees the business as the communications business, he doesn't see it as the newspaper business or the television business. I think Rupert Murdoch sees it holistically [and] in a global state," he says. "A one-medium, one-country company is the one that's having it toughest at the moment."

Murdoch is also "counter-intuitive", he notes. "When others are cutting, he's investing. Everybody thought he was going to cut at The Wall Street Journal, but my sense is that he's investing in editorial now. I do think there's a lot of statistical evidence to show that people who innovate and brand in a recession come out of it faster and stronger."

He is not entirely downbeat over traditional media, saying it had become a better value proposition for advertisers. "The good news for older media is that people are looking at it more intensively because in 2009, inventory is in excess supply and price is under pressure and so older media looks relatively attractive. ITV is at its most effective cost for many, many years."

As a boy, Sir Martin was sitting in front of his family's black and white television watching John F Kennedy's presidential inauguration. "He didn't wear a coat and it was cold enough that his breath was frosting on the air. He had some wonderful lines," he remembers. Now he gets a ticket to the event. "The occasion was just amazing, almost two million people in Washington, and the enthusiasm, passion and charisma that he has, his wife has and his family has is extraordinary to behold. I had a seat in front of the Capitol. No, it wasn't touching distance, it was about 60 rows back," he says, breaking into laughter.

The President is so inspiring to young African-Americans and Hispanics that there will be a marked benefit to the economy, he suspects. Further stimulus will come from the World Fair in China, the Asian Games in Guangzhou, the Winter Olympics in Vancouver, the World Cup in South Africa and then the congressional elections in America in November 2010. As Sir Martin jumps out of the car to meet a client, it's dark, but, if his predictions are right, the outlook's not quite so gloomy.