Sir Martin Sorrell thinks it's 'scandalous' that Cameron didn't attend Sochi

WPP boss Sorrell - the world's most powerful ad man - said today that problems in Russia would last until the end of 2015, but added that investors must hold their nerves.

by Emma Haslett
Last Updated: 12 Jun 2014

Sir Martin Sorrell is about to be dethroned as the boss of the world’s most powerful advertising company by the combined might of the Omnicom-Publicis merger, but he still holds a lot of sway in Russia. Having acquired (rather appropriately named, considering the circumstances) Russian marketing firm ARMI just before Christmas, WPP now makes about 3% of its revenues from the country (although its margins fell in 2013 because of problems with currencies in emerging markets).

But this morning Sorrell (who is, he pointed out, half-Ukrainian) said the next few years aren’t going to be an easy ride for investors in Russia.

‘This [market turbulence] is going to continue for the short to the medium term,’ he said. ‘I don’t think that by the end of this year we’ll see significant improvement. But if we have a drink at the end of 2015 I think we’ll see big changes.

‘I don’t think [Western] sanctions [against Russia] will have much heft,’ he added. ‘People can rearrange their affairs.’

Sorrell also said that by not attending the Sochi Olympics, Western governments missed a ‘major opportunity’ to improve their relationship with Putin, just when it was crucial they were on good terms with him.

‘It was scandalous that Western leaders didn’t go to the opening or closing ceremonies. This was Putin’s project. He spent €1.5bn on the opening ceremony. If Obama, Cameron, Merkel etc had gone - I’m not suggesting the Ukraine situation would be different, but it’s amazing what you can do when you communicate.’

Sorrell was speaking at the launch of a report by Landor Associates looking at the Russian consumer. Russia now has 143 million consumers, and ‘for the first time in 20 years that number is growing’, it found.

Despite its diplomatic problems, Russia is ‘among the top three European consumer markets by value for almost all consumer products, and number one, as of 2013, in categories such as mobile telecom, dairy, clothing, footwear and apparel’. Russia has just been upgraded by the UN Development Programme from ‘middle income’ market to ‘high income’.

‘To be honest, most Russian consumers aren’t worried [about the Ukraine situation],’ added Emma Beckmann, who runs Landor’s Russian office. After the 2008 crisis, the economy bounced back fast - so there’s no reason to worry now. Sorrell agreed.

‘I’m bullish,’ he said. ‘My view is that you hold your nerve.’

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