• by Joe Mandese  @mp_joemandese, August 17, 2007

WPP Group, the world's largest buyer of media and parent of media networks including MindShare, Mediaedge:cia, MediaCom and Maxus, this morning reported mediocre revenue growth for the first half of 2007, despite strong results from its traditional and digital media services operations and healthy billings gains. Revenues for U.K. based- WPP rose only 2% to $5.8 billion due primarily to the strength of the British pound vs. the U.S. dollar, and the fact that the U.S. was one of is fastest growing markets, while the U.K. was its slowest during the half. On a constant currency basis, revenue was up 7.7% compared with last year, with currency fluctuations.

WPP said its total billings rose 5% to $29.8 billion during the half, and much of it came from the growth of media, digital marketing, and below-the-line marketing services.

"Media investment management continues to show the strongest growth of all our communications services sectors, along with direct, Internet and interactive," the company said. "Direct and digitally-related activities now account for approximately 23% of the group's total revenues, which are running at the rate of approximately $12 billion per annum. Brand advertising, particularly in the new faster growing markets, along with information, insight & consultancy and branding & identity, healthcare and specialist communications, show consistent growth."

WPP's Information, Insight & Consultancy operations, which include its media and marketing research businesses, was the weakest sector during the half, with total revenues declining 1.6%. PR and public affairs were the fastest growing sector, rising 7.8%.

"In this environment, clients are seeking new ways of reaching the consumer and finding new geographic growth opportunities. Satellite and cable television, outdoor and out-of-home advertising and radio in the traditional media and, more importantly, direct, Internet and interactive (including mobile and video) are taking a growing share of client spending, albeit from lower absolute and relative levels," WPP said. "Similarly, but geographically, Asia Pacific (particularly but not exclusively China and India and including the new tigers of Indonesia, Pakistan and Vietnam), Latin America, despite some political volatility and some growth of populism and protectionism, Africa, the Middle East and Central and Eastern Europe are becoming more and more significant, again from lower absolute and relative levels."

The company said the advertising industry is becoming a bifurcated marketplace, with rate of traditional media growth - including TV, newspapers and magazines - ebbing, while new media including direct, Internet and interactive services growing at faster rates.