WPP aims to increase its stake in the Middle East

Global advertising and marketing giant WPP is looking to increase its stake in its business interests in the Middle East, according to Mark Read, the company’s director of strategy.

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By  Tim Addington Published  August 21, 2005

Global advertising and marketing giant WPP is looking to increase its stake in its business interests in the Middle East, according to Mark Read, the company’s director of strategy. During a visit to Dubai last week, Read, a key advisor to WPP boss Sir Martin Sorrell, also said that the network expected to see stronger growth from its non-advertising businesses in the region and for revenues from emerging markets such as the Middle East to increase. WPP interests in the Middle East include Mindshare, Mediaedge:cia, Hill & Knowlton, JWT, Team Young & Rubicam and Bates PanGulf. Responding to claims that WPP’s financial stake in its Middle East operations was small, Read said: “We have associates and over time we would like to increase our share in general in those businesses. But that is a process that takes time.” Currently the region accounts for just one per cent of WPP’s global revenues, which last year topped US$8 billion. Asia-Pacific, Africa and the Middle East accounted for US$1 billion of that figure. “If you look at it by size, the Middle East is a relatively small region in terms of revenue. But in growth terms it is one of the strongest region’s in the group,” said Read. “Currently we are a 40, 40, 20 company. Roughly 40 per cent of our revenues come from the US and Europe and 20 per cent from fast growing regions, of which the Middle East is one. We want it to be a third from each, which implies a faster rate of growth.” He also said that Iran, where the company has no operations, and Iraq, where there is a small presence, were not an “immediate focus” for WPP. Read said that, while the region accounted for a tiny fraction of WPP’s overall revenues, the company still regarded it as significant to its business. This was confirmed with the appointment of Saudi businesswoman Lubna Olayan as a non-executive director of the WPP board. Olayan, CEO of the Olayan Financing Company, who has been named by Fortune magazine as one of the 50 most powerful women in the world, took her seat on the board in March. He also revealed that WPP is to hold one of its board meetings in the Middle East next year. Talking of areas of future growth, Read said: “More than half our business is in advertising and media planning and buying. We are more focused in those disciplines in this region than other parts of the world. I would expect that to change. “I think we will see faster growth in non-advertising services in the region, as we will across the world.”

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