WPP sees improvements in advertising revenues
The advertising giant WPP today said that it is starting to see a recovery in advertising revenues.
The company reported that whilst the UK’s advertising market remains in recession, its US markets, which provide 43.7% of the company’s revenue, have not only stabilised but are showing signs of muted growth.
WPP chief executive Sir Martin Sorrell, stated, ‘Certainly, it seems as though we are starting to climb out of the bath.’
In the first six months of 2003 the company’s advertising revenues from the US increased by 2.2% whilst UK revenues fell by 1.8%. Over the same period advertising revenues from the company’s continental Europe market increased by 2.7%, increasing the company’s overall adverting revenues by 1.8%.
WPP’s overall revenues fell by 2% to £1.91 billion in the first six months of 2003. The company’s profits before tax were down almost 5% to £202.9 million. However, the drop in performance was less than analysts were expecting.
WPP highlighted that it was ranked first for net new business gains in the Lehman Brothers and William Blair & Company surveys for the first six months of 2003.
The company claimed that its prospects are improving after seeing almost three years of recession in the advertising market.
WPP pointed out that significant US government deficit spending is stimulating the US economy, particularly in preparation for the 2004 United States Presidential election. The growth in US government spending is currently greater than at any time since the Vietnam war in 1967.
The company claims that this bodes well for its prospects in 2004. It also highlighted that the forthcoming Athens Olympic Games, football’s European Championships in Portugal and heavy US political advertising expenditure would help drive up media pricing and therefore improve revenues.
