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Thursday 4 December 2008

The veteran batsman who just hates to lose

Judi Bevan meets Sir Martin Sorrell, the hard-driving Eighties entrepreneur who is still chasing acquisitions for the company he created, the advertising giant WPP

‘Building a company is the nearest thing a man can do to giving birth and nurturing a child to maturity,’ says Sir Martin Sorrell, the founder and chief executive of WPP.

So what exactly is WPP? Twenty-two years after Sorrell first invested in a tiny company called Wire & Plastic Products, then producing profits of £312,000, the renamed WPP has become the world’s second largest media and advertising group, valued at £7 billion, employing 110,000 people in 106 countries (including, embarrassingly, a share in a Zimbabwean company connected to the Mugabe presidential campaign, though WPP has now said it intends to sell that stake) and making record pre-tax profits of £928 million in 2007. The empire includes the world-famous advertising brands of JWT (formerly J. Walter Thompson), Ogilvy Group and Young & Rubicam; in public relations it has a clutch of companies under the Hill & Knowlton umbrella; Fitch in design; and a host of others in marketing and market research.

All that is still not enough for Sorrell, who is on the acquisition trail again with a £1 billion approach to the market research giant Taylor Nelson Sofres — which, to his irritation, has the temerity to be talking to another company, GfK of Germany, about an agreed merger. ‘That’s like two drunks leaning against each other,’ he says dismissively. Should he succeed — although he is quite capable of walking away — WPP would leapfrog Omnicom to become the world’s largest advertising and marketing services company. Sheer size, he claims, is not the issue. ‘At 5ft 6 and a half, how could it be?’ he grins. But profits are. ‘My ambition is to see clear blue water between us and the nearest competition,’ he says unequivocally.

Whatever happens, GfK should know that he is one tough negotiator. ‘Martin never agrees a deal unless he is sure he is inflicting huge pain on the other side,’ says one long-term adviser. Surprisingly though, he believes organic growth is a superior way to build a company. ‘It is no accident that McKinsey or Goldman Sachs are such wonderful companies because they are unibranded,’ says Sorrell, showing his Harvard credentials. ‘But if you want to build the best advertising and marketing services company in your own lifetime — and I would like to do this before I am dead — then you have to do it by acquisition.’

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