Online advertising will double within a handful of years, the founder and CEO of global powerhouse WPP Group PLC in London, Sir Martin Sorrell, said. Meanwhile, advertising spending as a whole will outpace economic growth for years to come.

“This year, ad expenditures are already ahead, with the World Cup, Winter Olympics, and midterm election campaigns, which will spend $1.5 billion on advertising,” Sir Martin said during a recent interview with The New York Sun in his New York offices. “In 2007 and 2008, the Beijing Olympics and the U.S. presidential election alone will add 2% to overall spending.”

That 2% represents $24 billion of the $1.2 trillion spent by advertisers worldwide on a variety of formats, including print, cable and broadcast television, Web logs, podcasts, billboards, movie theaters, elevators, cell phones, and targeted venues such as gasoline pumps and public washrooms. Roughly half of the $1.2 trillion is spent on advertising and marketing in America.

Some $1.5 billion of WPP’s 2005 revenues of $10 billion are Internet-related.

“About 15% of our business is Internet, and this will be 30% in 10 years,” he said.

Online advertising in America as a whole jumped 30% in 2005, but still represented only 5% of total expenditures on advertising.

The trend into online advertising troubles traditional press and broadcast outlets, but Sir Martin notes that specialty print outlets, such as the Economist and magazines aimed at beauty or health care, are prospering. Personally, he said, he’s reading more daily newspapers, doing more e-mail and BlackBerry messaging, but reading fewer periodicals and watching less network television. The 800-pound gorilla in the advertising world is Google, which many fear will continue to lure advertising revenues away from both advertising agencies and traditional press outlets, he said.

“Is Google friend or foe?” Sir Martin said. “What should traditional media and networks do about the Web? The problem is more difficult for media than for agencies. We don’t bet on technologies. We provide advertising content for whatever platform people are reading, watching, or listening to.

“We’re Google’s third-biggest customer. They want us to buy more. At the same time, they are threatening to compete with us by setting up electronic platforms to buy and sell media,” he said.

Due to stock market support, the biggest danger is Google’s wealth, he said.

“Its market capitalization is $130 billion and its revenue is $5 billion a year,” he said. “We have a market cap of $15 billion and revenues of $10 billion. Google has 5,000 employees. We have 72,000 employees. Google has 50 offices and we have 2,000 offices. They are not stupid. They have firepower,” Sir Martin said.

Madison Avenue has adapted in order to capture the “eyeballs” of younger – as well as foreign – consumers for its corporate clients. This huge communications industry is now mostly divided into six global conglomerates. WPP, a publicly listed holding company, is second largest, with $10.5 billion in revenues in 2005. It owns many of America’s advertising and public relations brand names, such as JWT (formerly J. Walter Thompson); Ogilvy & Mather; Grey Worldwide; Y&R (formerly Young & Rubicam); Hill & Knowlton, and Burson-Marsteller.

Sir Martin pioneered the conglomeration trend in 1986 by gobbling up agencies. These days, its 70 companies compete as independent operations (Sir Martin calls them “tribes”). They are expected to meet tough financial targets imposed by WPP, and also to cooperate – but only if it better serves clients.

In the good old days, Madison Avenue agencies made 15% of each advertising dollar spent by clients on a handful of major networks. Now, they are paid hourly fees for creative, strategic, or advisory services, and they get bonuses or sometimes partnership profits for merchandising or other ventures with clients.

Sir Martin earned his stripes by leading the international expansion of famed British advertising agency Saatchi & Saatchi (now part of rival French holding company the Publicis Groupe) as group finance director between 1977 and 1984. He is an economics graduate of Cambridge University with an MBA from Harvard University.

Today, Sir Martin travels constantly as the unofficial ambassador for Britain’s business community by virtue of his knighthood, as well as in his capacity as CEO of an enterprise with 72,000 employees and 2,000 offices in 100 countries.

“Advertising is growing at three speeds,” he said. “The fastest is Asia, Latin America, the Middle East, and Eastern Europe. Canada and the U.S. are in the middle in terms of growth, and the lowest growth is Western Europe,” he said.

About 82% of WPP’s revenues derive from North America, Britain, and Europe, but the fastest growth area is in emerging markets, the so-called BRIC countries – Brazil, Russia, India, and China. By 2015, Sir Martin estimates that 40% of WPP’s revenues will be generated in Asia alone from existing operations.

“If I was graduating today I would move to Shanghai,” he said.