Sir Martin Sorrell: no sign of 'double dip' advertising recession

The WPP chief executive, Sir Martin Sorrell, is cautiously optimistic about the global advertising recovery, arguing there is no sign of the feared "double dip" recession. However, Sorrell, speaking today at the Cannes Lions International Advertising Festival , admitted there are concerns of a "Eurozone contagion" in the market. He said that positive signs included "America biting back" from the recession and TV ad spend returning strongly. "We have seen nothing that indicates that [a double dip] but I would say that I have two concerns," he added. "Is there [a potential] Eurozone contagion, and in the USA next year given [George] Bush tax cuts disappear." He said that his concerns over uncertainty in the market are being borne out by issues being raised today at the G8 meeting of nations at the Deerhurst Resort in Ontario, Canada. "An expression of that concern is at the G8 where [Barack] Obama is saying keep the fiscal stimulus packages in place and [Angela] Merkel [the German chancellor] is saying withdraw," Sorrell added. He said that in terms of the performance of WPP there has been "sequential improvement in the first five months". Across April and May WPP has seen year-on-year revenue growth of about 4% to 5%. Sorrell added that like most UK companies, WPP, gave George Osborne's budget an 80% to 90% approval rating, but had two caveats. The first is that there is no time clause attached to the rise in capital gains tax to 28%. "It is not right. It is not the issue of paying more capital gains tax it is that it is the same if you own something 25 minutes as 25 years," he said. "It seems distinctly discriminatory and unfair." Sorrell's second issue is WPP's opposition to UK corporation tax, which prompted it to move its headquarters to the Republic of Ireland for tax purposes . "The government has fulfilled its election pledge to conduct a review," he said. "That will take a year or so and has only confirmed the uncertainty and will make others contemplate their course of action [as well]. We never said we would move [back] because a review was taking place." At a seminar at the festival he interviewed Keith Weed, Unilever's chief marketer, who presides over a $5bn global marketing budget for brands including Lynx, Dove and Omo, and the topic of Facebook arose. Sorrell said Facebook, or more broadly social media, was the "modern form of letter writing". He also asked whether the backlash Facebook has had from introducing plans to generate revenue from users might mean that social media will have to remain "pure". "When they [Facebook] have introduced things like Beacon [Facebook's ill-fated advertising system] they have changed within 24 or 48 hours," he said. "Are these media we should keep pure? [Maybe we] shouldn't bastardise them by making them financially-driven." Weed, who said today that Unilever intends to double its digital marketing spend, called Facebook "word of mouth on steroids". "These guys are running businesses so they must, and will, monetise them," he responded. "But they have to be careful and clever. This idea that brands are going to pollute Facebook is not true at all. The challenge is to find the business model that extracts that." • To contact the MediaGuardian news desk email [email protected] or phone 020 3353 3857. For all other inquiries please call the main Guardian switchboard on 020 3353 2000. • If you are writing a comment for publication, please mark clearly "for publication".