WPP chief executive Martin Sorrell has warned agencies of the
dangers of taking equity instead of fees from internet start-ups, as
online businesses rush to build their brands.
He was speaking at a one-day conference on the internet jointly hosted
by WPP, NTL and The New Statesman last week, which featured a host of
senior business and political figures, including Chancellor of the
Exchequer Gordon Brown.
Sorrell told Marketing that WPP was prepared to take stock in internet
companies as a form of payment, but was wary about how this would work
in most projects. ’I don’t want a situation where we get underpaid,’ he
said. ’It’s a bull market phenomenon - what if the market cracks?’
But Sorrell is committed to the internet itself: ’The financial aspect
doesn’t detract from the fundamental change it is making to people’s
He added that new companies would often need to be set up to cope with
the pace of change of the web. ’The high value of traditional business
such as Ogilvy and Millward Brown shouldn’t be dismissed. But you have
to invest in new media companies such as Hyperparallel and Syzygy - the
next step is to co-ordinate them,’ he said.
While admitting that the US is leading the way in internet business,
Sorrell also pointed to the potential of the Asia-Pacific region as a
market for e-commerce. ’If I was a venture capitalist, I would be
looking at Bangalore, Shanghai and Beijing,’ he said.