Citing improved ad markets and echoing the generally upbeat sentiments of its holding-company peers, WPP Group today projected full-year organic revenue growth of 2 percent, an improvement over its previous guidance, which had forecast flat revenue for 2010.
Organic revenue removes the impact of currency fluctuations, acquisitions and other factors, and it has become a closely watched measure of financial performance for global ad industry firms.
For the first quarter, WPP’s revenue grew by half a percentage point in organic terms to $3.23 billion, compared to the same period in 2009, the company said.
That represents a considerable improvement over the 5.8 percent drop WPP suffered in the same quarter a year ago (vs. ’08), and the 7.2 percent decline it absorbed in the fourth quarter of ’09.
WPP made a point of noting that global revenue rose 1 percent in March. Though that’s a modest gain to say the least, it represents the first monthly revenue improvement for the firm since December 2008.
“The start to 2010 seems to indicate a change in client attitudes,” the company said in its earnings statement. Client budgets are on the rise and “the most marked change and turnaround in direction has, so far, been in the United States, where monetary and fiscal stimulus seems to have had, perhaps not surprisingly, the most marked effect,” the firm said.
WPP’s quarterly revenue grew 4 percent in the U.S., while Western Europe remained “challenged,” with sales down about 1 percent. In most other operating regions, WPP was either basically flat or roughly 1 percent down.
Moving forward, world events like the Asian Games, FIFA World Cup, the World Expo and U.S. congressional elections are expected to help drive growth.
“It is too early to say whether this stabilization in the first quarter and the growth in March will be sustained,” WPP added. “The second quarter should continue the [positive] trend, if only because the comparatives are easier, since second-quarter revenues in 2009 were down almost 11 percent.”
Based in Dublin, Ireland, WPP owns Ogilvy & Mather, Y&R and JWT, among others.
HOLDING COMPANIES’ FIRST-QUARTER PERFORMANCES: