Media Drives Strong Half For WPP, Digital Accounts For 25% Of Total Revenues

Citing media services as its strongest area of growth, WPP Group this morning reported a 14.3% increase in revenues to $6.2 billion for the first half of 2008, on a billings surge of 11.8%. WPP, the largest buyer of media in the world and the parent of MindShare, Mediaedge:cia, MediaCom, Maxus and brand agencies including JWT, Y&R and Grey, said that after adjusting for currency exchange rates, its "like-for-like" revenue growth was 4.3%, which it said was comparable to 2007 results and admirable given the relative slowdown in the global economy and advertising industry.

"The United States, despite the continuing uncertainties surrounding the financial markets continues to grow, with revenues on a constant currency basis up 5.8%.," WPP said, noting that North American revenue growth actually surpassed those of its home base in the U.K. as well as the rest of Continental Europe,

The growth was helped by an impressive new business run across WPP, which reported a net new billings gain during the half of $2.519 billion. WPP attributed those gains to the continuing trend toward consolidation, as well as from new assignments from existing clients.

GroupM's operations continued to be WPP's biggest growth driver. Both traditional media investment management, as well as Internet and interactive services were among the fastest growing sectors within WPP, which also cited a surge in demand for its public relations, public affairs and "information, insight and consultancy" services, the latter of which could grow even more important and voluminous should WPP be successful in its bid to acquire U.K. research giant TNS.

While media was WPP's fastest growing sector - with digital and direct response media growing to 25% of WPP's total revenues - overall advertising services was the organization's laggard, reflecting a slowdown in traditional branded advertising services.

"Public relations and public affairs continued the strong growth, which started in 2006, continued throughout 2007 and into the first half of 2008, with constant currency revenues up 9.0%, reflecting the positive impact on the sector's growth of fact-based polling techniques and social networking on the web, which demonstrates the increased effectiveness of editorial publicity over paid for publicity," the company said, noting that nearly 55% of WPP's revenues now come from "outside advertising and media investment management," vs. more than 53% last year.

Tags: agency, earnings
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