WPP has retained its number one worldwide network position but is coming under increasing pressure from its two closest rivals. Preliminary results to the end of December 1994 show that the Ogilvy & Mather and J Walter Thompson parent has increased revenues by five per cent to $2.16bn (Ãº1.42bn).
By contrast, the Interpublic Group and Omnicom returned double-figure revenue growth. Omnicom closed the gap on Interpublic with year-end results showing a 16 per cent increase in revenues to $1.75bn (Ãº1.15bn). Interpublic posted results last week showing revenues of $1.9bn (Ãº1.25bn).
WPP reported that the UK had one of the strongest growth rates of any market at 12.5 per cent and total net new worldwide billings rose 42 per cent to reach $1.6bn (Ãº1.03bn). Revenues at JWT and O&M rose by 6.1 per cent and 4.4 per cent respectively. But a slump in WPP’s below-the-line activities suggests the structural shift away from above-the-line ads is not as developed as has been claimed.
City analysts suggest growth in the US and UK markets will plateau by the summer and growth in the next 18 months will have to come from continental Europe. “The UK has reached the peak of its growth rate but different countries will develop at different rates,” says one London analyst. “The big question is what happens next time there is an economic downturn.”
Omnicom recorded an operating profit of $108.1m (Ãº71m), up 27 per cent from the 1993 figure of $85.3m (Ãº56m). However, after an adjustment for changes in accounting practices, it posted a pre-tax profit of $80.1m (Ãº53m) – a year-on-year fall of six per cent.
The most dramatic growth in Omnicom fortunes came from international business, whose revenues grew 20 per cent to $897.6m (Ãº590m). Big account wins included BMP DDB Needham securing more than $100m of Digital business in the US and Europe, $70m of Budweiser business and Abbott Mead Vickers.BBDO scooping Ãº50m from BT in the UK.
SBHD: 1994 AGENCY GROUP RANKINGS
Network Revenue % Revenue increase Operating profit
WPP* $2.16bn 5 $170m
Interpublic $1.9bn 10.6 $141m
Omnicom $1.75bn 16 $108m
*Denotes unaudited figures
Source: Network results