GLOBAL – OCTOBER 2010 – WPP Group, the holding company of several communications services agencies such as Ogilvy, Group M, Grey Group, Y&R, Wunderman and JWT, reported significant increases in its third quarter 2010 revenues last week.
Third quarter revenues rose by 12.2% to £2.253 billion (by 6.1% in US dollars to $3.494 billion). Excluding the impact of acquisitions and currency fluctuations, like-for-like revenue growth was up 7.5%, the highest quarterly like-for-like growth rate since the fourth quarter of 2000. However, this growth is not expected to be sustained.
The United States, the first region affected by the global economic crisis, has bounced back with third quarter revenues up 9.9%.
Asia Pacific, Latin America, Africa and the Middle East and Central and Eastern Europe showed considerable improvement in the third quarter with revenues up 8.3%, well above the previous two quarters, up 3.1% in the second quarter and -1.5% in the first quarter, bringing year-to-date revenues to 3.4%. Mainland China and India continue to lead in Asia with revenues up over 23% and almost 15% respectively.
The United Kingdom and Western Continental Europe also showed significant improvement. The Middle East was the only sub-region to show some softness with revenues down.
Advertising and media investment management revenues grew by 9.6% in the third quarter, with advertising over 6% and media investment management almost 15%. The Group’s branding and identity, healthcare and specialist communications businesses (including direct, digital and interactive) grew by 8.1%, well above second quarter growth of 3.0% and 1.2% in quarter one, driven largely by the global direct, digital and interactive businesses, including OgilvyOne Worldwide, OgilvyAction, VML and Wunderman.
In the first nine months of 2010, reported revenues were £6.694 billion, up 6.3% (up 5.7% in US dollars to $10.251 billion). On a like-for-like basis, revenues were up 4.1%. On a constant currency basis, advertising and media investment management is showing the strongest growth, with year to date revenues up 5.2%, with all other sectors showing similar year to date growth of around 4%.
Net new business billings of £880 million ($1.409 billion) were won during the third quarter and £2.994 billion ($4.791 billion) in the first nine months of 2010 boosted by wins from existing and new clients and ranking first in the three new business league tables, reflecting relative competitive strength.
Asia Pacific, Latin America, Africa and the Middle East and Central and Eastern Europe (including the BRICs and Next 11), revenues and digital revenues are both now approaching 30% each of total revenues, which this year will be moving towards $15 billion. WPP is considering an increase in revenue targets from these geographic and services sectors.
