Social media is an opportunity for WPP

Sorrell dismissed the idea that WPP was "one monolithic, elephantine company" with dozens of brands unable to meet the challenges and opportunities that the new digital economy presents.

Sorrell said: "In fact, new media and social networks, in particular, have been and will be an opportunity, not a threat.

"They've enabled us to become closer to the consumer and learn more about their media habits and the changing media market place.

"Interactive dialogues have enhanced our understanding of the consumer and have enabled us and will enable us to target more and more effectively."

What, Sorrell said, had changed for WPP was the application of technology and use of data. They have become more important resources and skills for the business, alongside the core skill of creativity, in its broadest sense beyond traditional media and the 30-second television commercial.

Sorrell said: "For example, we've seen major new ways of growing our public relations campaigns through social networks and communities and polling.

"Editorial publicity has yet again been highlighted as even more important than paid-for publicity."

He said that WPP had seen social networks and new media, such as mobile and video, catalysing the opportunities for consumer insight, advertising, branding and identity, healthcare and other areas.

"This doesn't minimise the need for us to be flexible, responsive, quick and entrepreneurial. Big agencies have the advantages of breadth and depth of planning, creative and executional skills. Smaller agencies have the advantages of speed and responsiveness.

"We have both big and small."