UK advertising company boosts share of advertising market

UK Advertising giant WPP today posted a 32% hike in first half profits to £255m (€374m) and said it had increased its share of the advertising market in recent weeks.

WPP revealed like-for-like revenues rose 6% in the six months to June 30 after stripping out the impact of deals including its £730m (€1.07m) purchase of New York-based agency Grey Global.

During the month of July, the figure was up almost 3% on last year – meaning it had so far “well exceeded” forecasts that the industry will grow at 2% to 3% this year and had therefore grown market share.

The UK market remained relatively weak compared with a mild improvement in Western Europe, although it had stabilised.

WPP is one of the world’s biggest advertising and public relations firms, with almost 91,000 staff and more than 2,000 offices in 106 countries.

Its agencies include J Walter Thompson, Ogilvy & Mather Worldwide and Young & Rubicam, while it has the Hill & Knowlton PR business in the UK.

The firm sounded an upbeat note about the prospects for its industry as it said corporate profitability was strong on both sides of the Atlantic, meaning spending on advertising and marketing continued to strengthen.

However, it warned that like-for-like volume growth remained difficult to achieve in the low inflationary environment.

It added that consumers on both sides of the Atlantic remained under pressure from increasing levels of debt, low savings ratios and “potentially fragile” house prices.

WPP said this was forcing its clients to hunt for new ways to reach consumers, with slower growth in traditional media, such as network television, newspapers and magazines, and more rapid growth in new media such as the internet.

It said: “In these market conditions, the prospects for our industry remain very good, as the needs for differentiation through innovation and branding and global expansion grow.”