WPP revenue tops £10bn for the first time

WPP chief executive Sir Martin Sorrell has joined those expressing cautious optimism about the advertising industry’s prospects for 2012 after his marketing services company reported record revenue and profit for 2011.

Sir Martin Sorrell

The company, which owns advertising and media agency networks such as Ogilvy & Mather, JWT and MediaCom and is seen as a bellwether for the state of the marketing industry, says revenue from businesses owned for a year or more grew 5.3% to break the £10bn for the first time in the company’s history last year.

Pre-tax profit grew 18% to top £1bn for the first time.

Geographically, performance was driven by growth in Asia Pacific and Latin America with revenue increases in excess of 14% in both regions. Its businesses in the UK grew income by 8.8% in 2011 against a backdrop of flat growth for many in the UK marketing services industry.

Advertising and media income grew 7.4% on a like-for-like basis, while revenue from consumer insight businesses such as TNS increased 0.8%. Revenue from PR interests including Ogilvy Public Relations and Cohn & Wolfe increased 4.6%.

Presenting the results, Sir Martin said: “Advertising as a proportion of GDP should at least remain constant, as it is still at relatively depressed historical levels, particularly in mature markets, post-Lehman and grow at a similar rate to GDP. The three maxi-quadrennial events of 2012, the UEFA Football Championships in Central and Eastern Europe, the Summer Olympics and Paralympics in London and last, but not least, the US Presidential Elections in November should underpin industry growth by 1% alone this year.

“Both consumers and corporates are likely to continue to be cautious and fearful, but should continue to purchase or invest in brands in both fast and slow growth markets.”

Marketing services rival, Havas, which owns the Euro RSCG Worldwide agency network, has also reported improving revenue. Global income grew 5.9% to €1.6bn, again driven by fast-growing markets in Latin America and Asia-Pacific.

Improving performances by marketing services companies follow several recent reports that suggest marketing budgets are being set higher across the world as better news on the prospects for key economies and improving local trading conditions persuade companies to invest more in marketing.

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