WPP captures greater slice of advertising market

Advertising and media group WPP forecast revenues growth ahead of the rest of the market today.

The group, which has almost 91,000 staff and more than 2,000 offices worldwide, said it was on course for like-for-like sales growth of between 4% and 5% in 2005, against previous estimates of 3% to 4%.

With all regions except Western Europe doing well, WPP reported third-quarter growth of almost 5% and pointed out that the industry itself was expected to expand by between 2% and 3%.

WPP raised its guidance for 2005 margins in August, when interim results showed a 32% hike in profits to €374m and were accompanied by an increase in its share of the advertising market over recent weeks.

Revenues growth of between 4% and 5% had been expected in the London market, although today's guidance is below the 5.5% reported for the first nine months.

The group said prospects remained bright, but it highlighted concerns about the outlook for the US economy and the impact of increasing interest rates and higher commodity prices.

It expects the industry to show growth of between 3% and 4% next year, helped by events such as the football World Cup, the Winter Olympics in Turin and mid-term Congressional elections in the United States.

Overall, revenues for the third quarter rose by more than 26% to €2bn, with the figure in constant exchange rates up by 23%.

In North America, revenues were up by 26% with the UK ahead by 10% and continental Europe stronger by almost 25% in the three month period.

Despite the overall improvement, which was helped by the €1bn purchase of New York-based agency Grey Global, WPP sounded a note of disappointment about the performance in Western Europe.

It said in a third quarter update: “The geographical pattern of revenues growth varied in the third quarter although all regions performed well with the exception of Western Europe.”

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

In Ireland, WPP owns Ogilvy Ireland, Javelin Young & Rubicam, DDFH&B, Hunter RedCell, Mindshare, Mediaedge:cia, Grey Helme and MediaCom Ireland.

The group said advertising and media investment management showed the strongest growth, with revenues up almost 28% in the first nine months. Public relations and public affairs revenues continued the improvement over last year, while branding and identity revenues were ahead by more than 23%.