Third-quarter revenues rose to a record $1.7 billion, up 11 percent compared to the same period last year. Organic revenue, which does not include the boost given from acquisitions or foreign exchange rates, was up more than 1 percent during the quarter. Revenue from advertising and media buying rose 15.2 percent to $818 million in the third quarter, which not only includes Mindshare and Mediaedge:CIA but other WPP agencies like J. Walter Thompson, Ogilvy & Mather and Red Cell.
While individual revenue data from Mindshare and Mediaedge:CIA wasn't released, WPP has said previously that the two media buying agencies led the growth out of the recovery. Sorrell said Tuesday that both were doing well.
The advertising economy, particularly in the United States, would continue in the recovery that has been registering since September 2002 in "uninterrupted but muted growth," Sorrell said.
"I would be very surprised if it doesn't continue into the fourth quarter," Sorrell said. He predicted 2004's economy would improve with the presidential elections, the Summer Olympics in Athens and the Bush Administration's "priming the pump in front of the election."
Sorrell said that while the recovery isn't to the extent that the industry saw in the 1990s, he said it's stabilizing and improving. He noticed a change in emphasis at companies from cost control to top-line growth, and said that would have implications in advertising and marketing.
"I think clients are turning their focus from the cost management to looking at the top line and that organic growth is critically important," Sorrell said.
That doesn't mean that everything is rosy in the long-term. In a statement released along with the earnings, WPP suggested that 2005 could see the return of inflation with deficit spending in the United States and the United Kingdom. Sorrell didn't discuss that on Tuesday's conference call with Wall Street analysts though he has sounded that concern in previous appearances.