Respected market observer, Sir Martin Sorrell, yesterday told WPP’s AGM that there are signs of stabilisation in the advertising and marketing services industry, particularly in the US.
Sorrell has long held the belief that a turnaround in the depressed advertising sector would not begin until 2004 and that it could take until 2008 for growth to return in earnest (see
Advertising Boom Is Five Years Away, Says Sorrell). He yesterday said that 2003 continues to be another difficult year, but is better than 2002.
Worldwide revenues at WPP were down by 3% for the first five months of the year, mainly due to currency shifts. On a constant currency basis, revenues rose by 1%. Geographically, also in constant currency, revenues in North America were up almost 2%, whilst in Europe the UK was down over 3%, and continental Europe up by over 3%. Asia Pacific, Latin America, Africa and the Middle East were all up by over 2%.
“Despite continuing global geo-political and economic issues the US has now shown positive like-for-like growth for the last quarter of 2002 and the first five months of 2003. The UK continues to disappoint with revenues declining in the first five months of 2003. However, continental Europe, Asia Pacific, Latin America, Africa and the Middle East continue to grow, probably against the market, thus increasing our market share,” said Sorrell.
By sector, WPP’s advertising and media investment management revenues were up over 3%; information, insight and consultancy up almost 4%; public relations and public affairs down almost 4% and branding and identity, healthcare and specialist communications down over 1%.
The latest advertising predictions from ZenithOptimedia concur with WPP’s assessment. They put 2003 US growth at 0.7%, rising to 3.4% in 2004 on a constant currency basis. Europe is expected to decline by 0.5% this year and grow by 2.4% in 2004. Within this, the UK is the weakest region, down by 2.6% this year (see Worldwide Advertising Forecasts From ZenithOptimedia).
