Sir Martin Sorrell: The health of healthcare business

The entire communications services industry—clients, media owners and agencies alike—faces unprecedented challenges. Changes in technology, audience empowerment and consolidation force us all to re-examine how we do business on a daily basis.

To be celebrating 40 years in this business is therefore more than just a milestone. It is a remarkable accomplishment. All of us at WPP Group are delighted to congratulate Haymarket Media and Medical Marketing & Media on this achievement.

From a WPP perspective, the healthcare sector has emerged as one of the fastest growing divisions. Although media investment management continues to show the fastest growth in the group, healthcare communications—along with direct, Internet and interactive—has been a star performer throughout the first half of 2006.

Like-for-like growth during this period was 8% for Branding & Identity, Healthcare and Specialist Communications, with the sector accounting for more than 27% of WPP's total revenues.
I fully expect spending by pharmaceutical and healthcare-related clients, particularly online, to continue to show strength. Among trends driving this growth are the ageing of the Baby Boomers and the economic growth in emerging markets, which is likely to encourage both governments and individuals to increase their spending on health-related products and services.

In low-inflation, over-capacity markets, with little or no pricing power, many manufacturers in other sectors have turned to price promotion and discounting. Significantly, the same has not been true for the healthcare-related and well-being segments of the packaged goods industry. Here, companies have continued to concentrate on product innovation—coupled with very strong branding—in their drive to differentiate products and services and build stronger market shares. As a result, brands and margins are more robust than in other divisions and volumes are greater.
So the health of the healthcare segment itself is very satisfactory—and seems set to remain so. Some small part of the credit for this state of affairs is undoubtedly due to those who serve the industry so well: not least Medical Marketing & Media. WPP is pleased to acknowledge its admirably sustained contribution to date—and looks forward to reading MM&M's coverage of this vital sector for at least another 40 years.

Sir Martin Sorrell is founder and CEO of WPP Group

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