Revenue growth in the Australia business of global advertising group WPP is lagging major markets, the US and UK, and is still to catch up with pre pandemic levels.
Documents with the company’s March quarter trading update show Australia's like-for-like revenue up 3.5% in the three months, an improvement from negative growth in the December quarter..
In the US growth came in at 8.9% and the UK 8.1%. In Europe, Germany jumped 16.1%.
“Australia, a little bit more challenging, but certainly showing signs of recovery as a result of the recent change and the buying in of that business into the WPP fold,” CFO John Rogers told analysts in a briefing.
Rogers also pulled together three-year growth numbers to better compare to pre COVID 2019.
The US and the UK are both up 7.6% over those three years, equating to an annual growth of 3%.
“Australia still behind 2019 levels, so down 9.1%, I think reflecting the opportunity to really recover that business,” says Rogers.
WPP CEO Mark Read told the analysts many of his major clients were experiencing strong growth but had an eye on inflation.
He says now is a very different story from two years ago when clients were looking to cut spend in the face of what they knew would be a very weakened demand.
“I think clients - the current time - are cautious of the experience for the balance of the year,” he says.
“Many have experienced a very strong first quarter, Coca-Cola organic growth of 18%, L'Oreal organic growth of 13.5%, you saw Google's 23% growth - Google is a top three client for WPP.
“I think many of our clients are experiencing continued strong growth as economies open up and consumer spending holds up strongly.
“I think they are concerned about the inflationary pressure on consumer spending, but they are seeing that as more of sort of second-half impact potentially than the first-half impact.
“We will have to see whether inflation continues to increase or comes off somewhat in the second half of the year.”
WPP reported a “strong” March quarter with like-for-like revenue up 8.1% to £3.091 billion.
The advertising group now expects full year growth to be in the range of 5.5% to 6.5%, up from previous estimates of 5%.
The result is in line with other global advertising groups -- Publicis Groupe, Omnicom and Havas -- reporting better than expected March quarter results.
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at adnews@yaffa.com.au
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.