WPP Group enjoyed its first billion-pound quarter in the three months to September as sales rose 10.9%.

The agency giant reported revenues of £1.029 billion ($1.742bn; €1.486bn) in Q3, up from £928.5 million in the same quarter last year. And there is a good chance of future growth, as chief executive Sir Martin Sorrell announced the ad market is climbing out its three-year "bath".

By region, the group's North American operations posted the slowest revenue growth, with a rise of 4.4% to £424m. The UK was up 6.5% to £166m, continental Europe rose by 21.4% to £256m, while the rest of the world surged 17.9% to £183m. However, in constant currency terms, the UK rose 6.5%, North America by 8.1%, continental Europe by 11.1% and the rest of the world by 17.0%.

By communications services sector, WPP's biggest interest - advertising and media investment management agencies – saw revenues jump 15.2% to £483m. However, public relations income was down 1.3% to £106.5m.

Much of the rise in Q3 turnover reflects the takeover of Cordiant Communications; excluding acquisitions and currency changes, revenues rose by just over 1%.

For the first nine months of the year, sales climbed 1.8% to £2.94bn – a like-for-like increase of 0.4%. This came despite a 4.1% decline in North American revenues.

Looking ahead, WPP restated its belief that 2004 will be a good year for advertising, buoyed by a US presidential election, the Olympic Games and the European Football Championships.

Said Sorrell: "The impact of heavy political advertising in the US on media rates and supply will strengthen advertising and marketing services spending. This will spill over into the UK. In addition, there is evidence of clients switching their attention from three years of cost management to top-line revenue growth. We are climbing further out of the bath."

However, WPP expressed caution about the outlook for 2005, when government deficit spending in America and Europe may lead to inflation.

Data sourced from: BrandRepublic (UK); additional content by WARC staff