Advertising group WPP looks up to explosion in digital demand

WPP’s corporate logo is seen in this 2018 photo, obtained July 12, 2019. WPP/Handout via REUTERS

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  • First-quarter net sales up 9.5%, raises forecast
  • Says customers continue to spend despite caution
  • Shares up 1% against stable FTSE 100

LONDON, April 27 (Reuters) – The world’s biggest advertising group WPP (WPP.L) raised its full-year sales outlook on Wednesday, saying strong customer demand had helped it to reverse the gloom that prevails in the global economy.

Tech giant Google (GOOGL.O) reported its first quarterly pandemic failure on Tuesday, adding to feelings that the invasion of Ukraine, soaring inflation and product shortages had begun to slow down recovery from COVID-19. Read more

Britain’s WPP, which owns agencies Ogilvy, Gray and GroupM, said while clients were wary of mounting pressure on consumer budgets, they hadn’t cut advertising spend. He mentioned Coca-Cola as a customer who had had a strong impact.

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Inflation can also have a positive impact on advertising budgets, as companies must produce marketing campaigns to explain and support their price increases.

“We had a good year last year and that momentum has continued into the start of this year,” chief executive Mark Read told Reuters.

Advertising holdings such as WPP, Omnicom (OMC.N) Publicis (PUBP.PA) and IPG (IPG.N) have been at the forefront of the corporate pandemic recovery as clients used their data, their creative skills and their strategic advice to produce and place new advertising campaigns.

Both Publicis and Omnicom beat first-quarter guidance in earnings reports this month, though comparisons will become tougher for the industry as the year progresses.

For WPP, he said his primary net sales metric — like-for-like revenue less pass-through costs — jumped 9.5% in the first quarter, ahead of a forecast of 7.1%. Net sales increased by 12.1% in 2021.

The UK group said it now expects full-year 2022 net sales growth of between 5.5% and 6.5%, up from its previous forecast of around 5%. %.

“Demand is strong for our services, particularly in digital media, e-commerce, data and marketing technology,” he said, with strong performance reported in the US and Britain.

Shares of WPP rose 1% against a flat FTSE 100 index (.FTSE).

Citi analysts said the results marked a “categorical” beat from forecasts, helped by broad-based growth across geographies and divisions and after WPP merged some of its agencies to provide a more integrated service to customers. clients.

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Reporting by Kate Holton; edited by William James, Paul Sandle and Emelia Sithole-Matarise

Our standards: The Thomson Reuters Trust Principles.

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