If investors are anything to go by, adland is set for a recovery after a dismal 2001.
Friday’s trading saw the shares of several ad giants rally, as confidence grew that the advertising market will pick up this year.
Leading the surge were European companies – Cordiant Communications saw its shares jump 14%, Aegis Group was up 9.3%, Publicis Groupe 4.7%, Havas Advertising 7.7% and WPP Group 3.6%.
“It’s really quite a rally, and the volumes are fairly substantial," declared Richard Hitchcock, a media analyst at Numis Securities. “People are taking the view that there could be a recovery in the second half of the year, so investors want to position themselves.”
American groups did not join the surge, but have been showing gains for the last few months – Interpublic Group shares slid 22 cents on Friday, but soared 44.8% during the fourth quarter, while Omnicom Group jumped 37.7% in Q4 and sneaked up 14 cents on Friday.
“The European names are playing catch-up,” explained Merrill Lynch analyst Lauren Fine, who offered a caveat against early optimism: “People coming into the new year are eager to play the recovery theme. I think it is premature.”
News source: Wall Street Journal