DM builds brands, even Sir Martin Sorrell agrees

Russell Parsons

What a difference a week makes. Last week the talk was about the hole the government’s £81bn public sector cuts might leave in the economy. This week, however, it is all about positivity.

The reason for such optimism? Robust results from WPP, the world’s biggest marketing services company and bellwether for marketers globally.

The company reported a 12.2% increase in third quarter revenue, the fastest growth the group has reported since the heady pre-recession days of 2000.

What was particularly encouraging, particularly for direct marketers, was the revenue growth enjoyed by traditional media.

Advertising and media revenue grew by 9.6%.

Even more upbeat news comes when you drill down into the revenue growth enjoyed by channel-specific agencies.

Revenue from the group’s branding and identity, healthcare and specialist communications businesses, including direct agencies increased by 8.1%.

This, WPP says, is the quarter traditional media “bit back”.
Earlier last week, Sir Martin Sorrell, WPP’s chief executive and marketing sage, offered this explanation.

“2009 was about survival but 2010 is about top-line growth.”

He adds that the shift is reflected by increased spending on traditional media over digital channels.

“There’s a view that online is more about price promotion, traditional more about brand-building. It may be one of the reasons why traditional has come back a bit.”

Assuming Sir Martin was including direct marketing in his assessment of the worth of traditional marketing, those working on the channel should be buoyed by the conclusion.

And should take the argument – that direct marketing builds brands – to those that control the purse strings.

If the performance of marketing services operators – rivals Publicis, Omnicom and Havas have all recently reported revenue gains – is an indication of the buoyancy of the industry we all have a stake in, then brighter times lie ahead.

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