WPP chief executive, Sir Martin Sorrell, is expected to signal the end of the worst advertising downturn in living memory when he announces the marketing group’s full year results later this week.
Sorrell is usually reluctant to be overly upbeat when predicting the industry’s fortunes and has so far refused to call an end to the slump, insisting that any recovery in the economic climate would be gradual.
However, a report in the Observer suggests that he will take a more bullish stance when WPP, the world’s largest advertising and marketing group, unveils its results on Friday. Lehman Brothers predicts the company will post pre-tax profits of £454 million on annual revenue of more than £4 billion.
The US economy grew strongly in the second half of last year. Sorrell expects the Olympics, the high-profile European 2004 football championships and the forthcoming American presidential elections to further boost spending.
Recent indicators also suggest the UK outlook is improving and the latest Bellwether report from the IPA reveals a rising tide of corporate optimism that could see adspend climb to levels not seen since the dotcom boom. A study from the Chartered Institute of Marketing also predicts that marketing spend will increase by around 3% this year. However, it casts doubts over the Government’s ambitious forecasts for economic growth and warns that the economic recovery will not be as swift as first thought.
WPP owns three of the top companies in advertising – J Walter Thompson, Ogilvy & Mather and Young & Rubicam – which account for more than half of the group’s overall revenues. It is understood that around 65% of WPP revenue comes from the US, 35% from Europe and 20% from Asia- Pacific.
