Advertising giant WPP has reported a jump in revenue and sales in its half-year results despite a “tsunami” of on-going advertising spending reviews across theUS.
The multinational advertising company, which reported the results on Wednesday, showed billings increased by 5% to £23.156 billion, with new business making up about £1.3 billion. Like-for-like net sales grew 2.3%, a slight reduction when compared to the first quarter growth rate.
Strong growth in the US was in contrast to a slowdown in Australia, South East Asia and Central and Eastern Europe, with the report stating the Australian market was “tougher” as both revenue and net sales growth slipped back in the second quarter.
WPP's analysis on the results said that despite the group's strong performance, the “apparent general industry optimism seems misplaced.”
“To survive in the advertising and marketing services sector, you have to remain positive, indeed optimistic, seeing the glass half-full and industry and company reports generally continue, understandably, to reflect that attitude,” WPP said.
“However, general client behaviour does not reflect that state of mind as tepid GDP growth, low or no inflation and consequent lack of pricing power encourage a focus on cutting costs to reach profit targets, rather than revenue growth.”
WPP boss Sir Martin Sorrell said despite the slump in china he remains bullish about the company's third biggest market.
In an interview with Sky News, Sorell said it “didn't change his thinking” about long-term investment in China, but if the
“Chinese growth rate is going to be permanently impaired it has very significant implications for global GDP rates," he said.
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