The long awaited recovery in the advertising economy is imminent with all the factors in place to ensure an upturn in spending in 2004, according to WPP boss Sir Martin Sorrell.
Sir Martin, whose pronouncements carry considerable weight, has consistently forecast that the advertising industry would experience a ‘bath-shaped’ recovery with 2004 seen as the year of real growth (see
Sorrell Sticks To 2004 Ad Recovery Forecast).
WPP saw turnover and profits fall in the first six months of 2003 (see WPP Undeterred By Profit Fall) but there are already positive signs for the second half with revenues up 2% in July. This growth was fuelled by “significant government deficit spending” which is now higher than at any time since the Vietnam War.
“Certainly, it seems as though we are starting to climb out of the bath,” said WPP in its interim results today. In particular, the group has identified new demand in the long suffering business-to-business sector with technology markets in good health.
Stabilisation has been achieved (see Sorrell Sees Signs Of Stabilisation) and next year sees a number of events guaranteed to stimulate advertising markets in different parts of the world. These include the US presidential elections, the Athens Olympic Games and the European Football Championships.
However, Sorrell cautioned that the media industry could not expect a repeat of the boom times of the late-nineties and reiterated his belief that major growth will not be forthcoming until 2008 (see Advertising Boom Is Five Years Away, Says Sorrell).
