WPP Delivers Mixed Trading Update; Sorrell ‘Not Euphoric’

02 July 2003

WPP Group is cautiously optimistic about the state of the ad market, despite a slight fall in global revenues.

Addressing investors earlier this week, the agency giant declared that conditions remain difficult, though business has improved on last year. For 2004, it voiced “medium-term optimism”.

Over the first five months of this year, however, WPP’s global revenues were down over 3%, a drop it blamed on exchange-rate fluctuations. Assuming constant currencies, revenues crept up by over 1%, with rises of 2% in North America, 3% in continental Europe and 2% in Asia Pacific, Africa, the Middle East and Latin America – though its UK operations saw a 3% slide.

By discipline: research and consultancy agencies saw the highest revenue increase (nearly 4%), while income from advertising and media services climbed 3%. However, public relations sank 4%, and branding, healthcare and other specialist shops slipped by over 1%.

Looking ahead, Sir Martin Sorrell predicted a gradual return to steady growth but surprised no one by declaring: “I’m not euphoric.” Cue bouts of déjà vu among seasoned industry observers, for whom a downbeat forecast from Sorrell (often followed by a better-than-forecast performance from WPP) is an occupational hazard.

However, Sorrell insists he is not deliberately playing down the chances of an ad rebound. “I get accused of being a serial pessimist,” he continued. “I think I'm not. I'm a serial realist.”

Data sourced from: Financial Times; additional content by WARC staff