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WPP to expand digital ad business in India

July 19, 2007 02:32 IST

WPP, one of the largest global marketing communication groups, is planning to team up with venture capital funds to expand its digital and online advertising business in India. The group has already adopted this model in China.

In India, WPP controls or partly owns close to 40 communication agencies across the advertising, public relations, direct marketing, media services, branding identity and market research verticals. Its agencies include O&M, JWT and IMRB, among others.

WPP also plans to introduce 24/7 Real Media, a digital marketing firm, in India and the rest of Asia.

"We are hoping to expand 24/7 Real Media in Asia. Asia is interesting because Google has not yet penetrated Asian countries as much as it has in the rest of the world," said Martin Sorrell, chief executive, WPP Group, who is on his annual India tour.

In May 2007, WPP announced the $649 million acquisition of 24/7 Real Media, a company that provides multi-platform Internet marketing strategies, including search engine marketing and search engine optimisation.

Sorrell said his group was keen on expanding its presence in the digital domain as a bulk of communication spends shift to this medium.

Currently, a fourth of WPP's business comes from digital media, which includes online and mobile phone publicity. The group intended to increase this to a third of its business by 2010, he added.

"Although Internet penetration is still small, especially in regions like India and China, most people who have access to it spend 20 per cent of their time on it. This makes online advertising important," said Sorrell.

Apart from the digital space, Sorrell emphasised the need to strengthen WPP's business in the Asia Pacific, West Asia, Africa and Russia.

He said revenues from the US, Western Europe and Asia were currently split in the ratio of 40:40:20 for the group. But over the next five years, Asia is expected to make up 33 per cent of the group's revenues and be on a par with the US and Europe.

The man who has built a $11 billion communications empire in a little over two decades said there was further scope for consolidation in advertising.

"There are still too many advertising brands. Consolidation will continue to happen," he said, adding that the group would look at increasing its stake in agencies like Rediffusion DY&R.