WPP has reported strong revenue growth of 5.9% to £2.9 billion in the third quarter, with North America and Asia Pacific driving sales.
In August, the international advertising giant's CEO Sir Martin Sorrell warned that despite revenue lifts, there was a “tsunami” of clients re-evaluating advertising spending and “general industry optimism was misplaced.”
For the third quarter ending September 30, North America, which accounts for almost 40% of group revenues, reported 6.8% growth.
While growth in the UK slowed, Asia Pacific, Latin America, the Middle East, and Central and Eastern Europe saw a boost of 2.9% in the third quarter, bringing in $1.3 billion of group revenue.
The company picked up £3.2 billion in new business billings in first nine months, giving leadership again in all net new business league tables.
At an investor meeting Sorrell said that while he was “always disappointed”, he was not “particularly disappointed with these results. If you look at the pattern, July and August were good. September was less good but it's still good overall."
In a statement, WPP said despite growth consumers and corporates both seem to be increasingly cautious and risk averse, with "geopolitical uncertainty, low inflation and strengthened corporate governance scrutiny" making them unwilling to take risks.
"It's quite clear that the next billion consumers on the planet will come from Asia Pacific – that argument applies equally to Latin America, and Africa and the Middle East – so clients are still very focused on fast growth markets. Having said that, efficiency, effectiveness, procurement and finance are still front and centre [for marketers]... There is a considerable pressure for continuous improvement."
He said for the majority clients, media spending is the key priority as significant changes in the media landscape in terms of “new media, fragmented media, have increased the complexity of the media investment decision. They’re examining how much they should spend and where they should spend it,” Sorrell told Bloomberg Business.
In an interview with the Wall Street Journal, Sorrell maintained ad blocking hasn't yet had a serious impact on the industry.
“Estimates that have been made so far about the impact of ad blocking have been on the smaller side,” Mr. Sorrell said.. “That doesn’t mean, by the way, that we can be complacent about it and it doesn’t mean it won’t become important.”
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