Drawn out US election boosts media spend says Sorrell

by Jennifer Whitehead, Brand Republic 23-May-08, 09:10

LONDON - Sir Martin Sorrell, chief executive of the WPP Group, has said that the elongated battle between Hillary Clinton and Barack Obama to become the Democrat's presidential candidate has boosted media spend more than anticipated.

Sorrell, interviewed on BBC Radio 4's 'Today' programme this morning, said of the US primaries:

"[It's] had a very significant impact on what we call above-the-line advertising, traditional advertising, which is around $3bn.

"People forget there's the below-the-line stuff, what I call envelope stuffing, which is the classic direct marketing stuff, which is probably a similar size, and that has stimulated the market as well.

"So the elongation of the campaign and the intensity of it… has made the background to media spending much stronger even than we expected."

Sorrell added to the general upbeat nature of the interview by saying that the global rise in commodity prices was having a knock-on effect, as clients were spending more on promotions and advertising:

"What we've seen I think on both sides of the Atlantic and around the world is an increase in activity… along with some of the other events that we all talk about, such as the Beijing Olympics, European football championships and political spending around the US elections, which have stimulated ad spending in 2008 and probably will continue to the end of the year."

Sorrell was also questioned about the issue of moving WPP's headquarters out of London because of proposed tax changes, saying that the company would wait and see what happened.

When asked if he could really see WPP move to, for example, Ireland, he said: "I think it's difficult because we're a British company and, I hope, we're a British success story and so its difficult in terms of reputation issues in a general sense to do that.

"But having said that, we do have a responsibility to our shareowners, which the management is a significant part of as well, and we have to see what happens."