Traditional media drives fastest WPP growth in a decade
WPP has reported its highest quarterly revenue growth since 2000, joining other marketing services companies in signalling a recovery in the advertising and communications industry.
The group, which owns agency networks JWT and Ogilvy & Mather, says revenue increased by 12.2% to £2.2bn in the three months to 30 September.
“Revenue growth strengthened significantly pretty much across the board”, the group says in a statement accompanying the results, particularly in the US and UK.
Revenue from US operations increased by 9.9%, WPP says, while earnings from UK interests increased by 7.4%, a “significant improvement” on the 5.1% registered in quarter two and 0.2% in the first quarter.
As indicated by WPP chief executive Sir Martin Sorrell earlier this week, the group saw revenue earned from traditional media “bite back”.
Advertising and media revenue grew by 9.6%, the group says, with advertising up by over 6% and media investment management by almost 15%.
Sir Martin believes that the resurrection in the use of traditional media by clients reflects a renewed focus on brand building. “”2009 was about survival but 2010 is about top-line growth,” he told delegates at the World Retail Conference earlier this week.
Elsewhere, revenue from the group’s branding and identity, healthcare and specialist communications businesses, including digital and direct agencies OgilvyOne Worldwide and Wunderman, grew by 8.1%.
Consumer insight revenue grew 6.9%, while earnings from public relations and public affairs businesses such as Hill & Knowlton increased 5.1%.
Net new business billings totalled £880m in the third quarter, the group says.
Despite the improved performance, the company did strike a note of caution, particularly about future prospects for US growth.
“It seems difficult to believe that the United States will continue to behave like an emerging market – growing this year,” it says, but adds that any “slackening” in US growth will be offset by gains from developing markets.
“This continuing overall improvement is most welcome, particularly after the brutality of a post-Lehman 2009. Calendar 2010 looks set fair with a good fourth quarter in prospect, particularly as most of our clients budget on a calendar year basis,” the group says.
WPP’s improved performance follows recent gains made by rivals Omnicom, Havas and Publicis.
