Which categories will come back first? Not cars, I’d imagine.

You have to be very careful about this. In the car category, in order to survive and prosper, these companies are going to have to invest in new models. They’re going to have to invest in marketing behind it. I think when a recovery comes, you’ll see automobiles come back. Not in as strong a form, but it will come back. You’ll see financial services come back, and you’ll see travel and retail come back, although retail at the lower price points is currently quite vigorous.
Which of your competitors is in the worst shape?

How about consolidation for WPP? You’ve undertaken a few hostile takeovers in your day.

There’s no such thing as a hostile acquisition, since it’s not hostile to clients or the people in the business or the share owners. It’s probably hostile to the CEO, but that’s about it.

What do you have your eye on?

We’ll continue to add smaller stuff—limited to about £100 million [about $140 million] a year—in new markets, new media, and consumer insight, which are our three areas of focus.

Given the breadth of WPP’s expertise, you’re in a better position than most to meet the challenge posed by the shift from traditional advertising to new media. What’s your solution?

If it’s true what you’ve said, then I’m a complete duffer, because I haven’t come up with any solution. There are two approaches that are certainly transitory solutions. One is to broaden the media you cover, to the whole industry—or as much of it as you can afford. And you particularly focus on new media in the hope that you develop an advertising or subscription-based model that will give the thing viability. The other is geographical. I think the most vulnerable media owner is a media owner that’s rooted in one country, in one medium. WPP is going to be more Asian, Latin American, African, Middle Eastern, and Central and Eastern European. 

What will your industry look like in five years?

It’s going to be more dominated by PCs, internet, video content, social networking. Our competitors say it’s about creative ideas. We are totally in agreement with that. But they’re missing the trick—that is, the application of technology to our businesses. It’s not about building server farms or hiring PhDs or competing with Google and Microsoft. It’s about applying the sort of things that Google and Microsoft and Yahoo and AOL and Facebook and Flickr and Wikipedia and everybody else have to our business. And I think we understand that far better than anybody else.

I read somewhere that you describe your relationship with Google as “frenemies.”

Totally. But I reclassified it recently as “friendly frenemy.” The reason we’re frenemies is that Google competes with us through the acquisition of DoubleClick. But we buy about $850 million worth of search advertising from them. We’re their biggest agency customer. And we’re also picking some of the best research projects we can do with Google, to prove the effectiveness of Web advertising and search and the like.

In your mind, what’s the state of the American brand these days?

The change in the administration, whether people like it or not, has made “brand America” much friendlier. But that could change as well. I don’t want to be fatalistic about it, but to some extent, these things are cycles in history. You go back and look at the early 19th century, China and India were 40 percent of world GNP. And then over the past 200 years they went down, and now they’ve come up again. So at the end of the day, it’s learn Chinese, isn’t it? Or maybe Portuguese—Brazil is not doing badly. There isn’t Canadian, but we can learn French and go to Canada. They haven’t done badly either.

You once told a reporter, “There is no yacht, no gold-plated Rolls-Royce. I don’t have a massive wine collection or art collection. My interests are very focused on business.” Now that you’re in your mid-sixties, do you regret that singular focus?

At business school, we had this course that if you wanted to get an A—this is absolutely true—all you did on your final paper was make sure to include a diagram with three circles. One represented family, one career, and one society. And you said that life was about the intersection of those things, and how you balanced those three things. That’s all it took to get an A. I got an A-minus. But all jokes aside, I thought that was a very good description. And have I been good at balancing those three things? The answer is no. I’ve tried, but you tend to get consumed by one or two of the three and not all three, and that’s wrong. So I think that would be the only regret. 

What hard choices do you expect to have to make in the coming months?

I think difficult choice is when you’ve got parts of the world that are growing and parts of the world contacting, getting that balance is really tough to do. It means you have to expand various part of the operation and contract others. The biggest challenge, which everybody has, which is in the short term, is making sure that our investment in people is tied to the growth of our revenues.

Newspaper ad spending is expected to decline signifcantly this year, compounding an already miserable trend. Do papers like the New York Times and The Wall Street Journal stand a chance?

It's probably pretty impossible for them to be as profitable as they were before. It’s coming at them in all directions. And when they go into new media, it only generates traffic and interest, not revenue. With the financial crisis, you talk to any media owner and the traffic on the sites is up. The trouble is, they can't—here's that word—“monetize” them—they can't make money out of them.

You’ve been outspoken in your belief that web sites should be responsible – for libel, etc. – for the content that appears there. Why?

If you own the channel, I think you're responsible for the content.

You’re 64. How long do you plan to run the company? Oh, as long as they’ll have me. You start the business in a room with two people, and you have a romantic attachment to it. And it’s very difficult to figure out when you’re doing more harm than good. But it’s more interesting now than it’s ever been. I wouldn’t call it fun, but I think it’s very challenging intellectually.