FRIDAY INTERVIEW/Sir Martin Sorrell, WWP, chief executive: WPP's Sir Martin Sorrell believes the advertising sector is more challenging than ever, writes Bernice Harrison.

The advertising industry will climb out of recession, according to Sir Martin Sorrell, but the recovery won't be V-shaped, U-shaped or even the new favourite among economists, basin-shaped.

Instead, the chief executive of WPP, one of the world's largest advertising and communications groups, has hit on a more domestic analogy.

"The recovery will be bath-shaped," he says, expanding to this mystified interviewer that he means that the "drop was steep, you know, at the tap end, then growth will be flat before a slow steady incline".

It's a laboured analogy but, as it is spoken by one on the most powerful men in the industry, it's likely to stick.

After 10 years of unprecedented growth, the global advertising industry fell 5 per cent last year and Sir Martin has been quick to shoot down any suggestions that there are signs of recovery.

He predicts and favours a slow recovery, arguing that the industry will ultimately emerge stronger.

The growth of WPP has been fast and at times controversial. In 1985, Sir Martin, who had been a key player in Saatchi & Saatchi's global expansion in the early 1980s, invested in WPP, an engineering company that made shopping trolleys.

He then proceeded to go on the biggest shopping spree in advertising history.

He spent $566 million (€645 million) buying J. Walter Thompson, which was the first sign to the market that he had global plans.

He followed this in 1989 with another headline-grabbing buy - he purchased Ogilvy & Mather for $825 million.

Since then he's been on the acquisition trail and WPP now owns 80 companies worldwide covering all aspects of marketing communications, from above-the-line advertising to media investment management.

WPP's interests in Ireland include the O&M group, which it wholly owns; DDFH&B, in which it has a shareholding; and Javelin, which is an affiliate of WPP since Sir Martin's takeover of Young & Rubicom.

The media planning and buying agency Mindshare is also part of the group.

Last year, WPP's pre-tax profits before goodwill, investment gains and write-downs were £490 million sterling (€795 million), compared with £380 million for the previous year.

Keeping track of all the outposts of his companies is, he admits, "difficult".

"I try but it's impossible," he says. "I don't give out edicts from on high because if I tried I'd get into trouble. If I say go left they all go right, so if I want them to go right I say go left."

His reputation as an uncompromising deal-maker and a straight-talking boss makes this more than a little difficult to believe.

When he bought Ogilvy & Mather, its founder and iconic advertising guru, Mr David Ogilvy described Sir Martin as "that odious little shit".

It didn't faze him.

"If someone came after my baby like that, I'd probably say the same thing."

The advertising business is now more challenging than ever, he believes, because of the power and knowledge of the consumer.

"Consumers simply have more information now; they have the power to pick and choose," he says.

"The challenge for business is differentiation. What will differentiate companies in the eyes of their customers in future is the quality of their communications."

While WPP is now predominantly an advertising company, Sir Martin sees the business moving towards one-third advertising and two-thirds communications activities outside mainstream advertising.

Research, he believes, is going to be key, with the interpretation of that research giving clients the ability to wrest some power back from consumers.

"Brands are vital because they help consumers decide which product or service to buy," he says.

"Sellers of products and services need the clearest possible understanding of consumer behaviour and the ability to differentiate broadly similar products from each other by means of their communications."

Consumer power has the effect of making clients more demanding of their agencies. It is, he says, an inexorable pressure.

"Clients inevitably want more for less because they're under pressure from consumers who have much more information."

Despite, or perhaps because of, his core belief in the importance of branding, not a single one of the companies in his global empire is branded WPP.

"They're all very, very strong brands in themselves - that's their strength and appeal."

He calls these companies his "tribes" and his visit to them coincided with a visit to Dublin last week to give a talk for outdoor media specialist JCDecaux, as part of its new marketing forum.

The short, bespectacled Sir Martin is an unlikely looking tribal leader.

A Londoner, he's an economics graduate from Cambridge and has an MBA from Harvard.

The "Sir" arrived with the millennium honours list.

His interest in the Irish advertising market came with his acquisition of global groups who already had offices, shareholdings or affiliates here.

Irish advertising is dominated by multinational agencies and the trend towards global advertising campaigns that simply need tweaking for the Irish market raises the question of whether an international agency really needs a Dublin office.

"There are certainly some economies of scale that could be achieved in the areas of media buying because of the concentration of media ownership and the fragmentation of the media," says Sir Martin. "It's inevitable because clients are becoming more and more concerned about media costs.

"However, you don't look at a market in relation to other markets, so the issue for agencies here is what do you do in a small market that will broaden that market."

While WPP handles some of the world's biggest clients, including Ford, Unilever, IBM and Philip Morris, he sees the broad client base that local agencies can bring as important.

"Every good business that we have has a balance between national and multinational."

" The great multinational companies of tomorrow are the strong national companies of today," he says. "I think there will always be a place for strong local businesses, whatever the size of the market."

In the course of the interview I refer to Sir Martin as an advertising man - the shorthand title that has long been favoured by the industry to describe themselves.

He corrects me sharply, saying that he is a businessman.

His distinction between the two has not made him a popular figure in the industry.

He has been described as paranoid.

"What's paranoid?" he bristles. "Everyone in business is a little paranoid."

"Insecurity is not a bad thing - it means that you're always thinking ahead."