Out of the bath and into shower, says WPP boss

Sir Martin Sorrell, the chief executive of WPP, the global advertising and marketing giant, yesterday warned that while the world economy had emerged from its latest "bath" shaped cycle of decline it now risked "taking a shower" in 2005 because of loose fiscal policy in the United States.

WPP announced that like-for-like revenues had risen 1 per cent in the fourth quarter of last year to give an annual increase of 0.7 per cent. The measure strips out acquisitions and currency fluctuations to give a clearer picture of the health of the advertising market.

Overall revenues at the company were up 5 per cent to £4.1bn with profits before tax of £473.4m. The company's final dividend was increased 20 per cent to 6.48p.

The group announced that the UK had seen revenue growth of 7.4 per cent in 2003 while North America, which accounts for 48 per cent of operating profits, had seen a 5.8 per cent rise in revenues compared with 2002.

Sir Martin has long predicted that 2004 would see an upturn in the advertising cycle with clients expected to spend substantially more than in 2003. He has characterised the media slump as a bath-shaped decline and recovery.

"Worldwide economic conditions are set to improve in 2004," said Sir Martin. "President Bush wants to be re-elected and will try to continue to stimulate the US economy through increased government spending, which will be reinforced by the Athens Olympics, the European Football Championships in Portugal and heavy political advertising in the US.

"This year's prospects, therefore, look good with worldwide advertising and marketing services spending set to rise by at least 3-4 per cent."

However, Sir Martin cautioned that after the November US Presidential elections, the White House incumbent may take action to tackle the large US deficit, a weak dollar and rising inflation.

"United States government spending is already rising at levels not seen since the Vietnam War in 1967. We would not want to take a shower in 2005," he said.

Sir Martin said that large network broadcasters such as the newly merged ITV faced a "great opportunity" as advertising revenues began to improve. However, he warned they would need to deliver strong programming schedules and respond to advertisers' needs.

"The danger is that they become complacent and arrogant and don't listen, then they will suffer," said Sir Martin.

He said clients were increasingly willing to experiment with other media such as outdoor advertising and commercial radio as alternatives to network television.

News
people'It can last and it's terrifying'
News
people Emma Watson addresses celebrity nude photo leak
Arts and Entertainment
tv
News
Katie Hopkins appearing on 'This Morning' after she purposefully put on 4 stone.
peopleKatie Hopkins breaks down in tears over weight gain challenge
PROMOTED VIDEO
Life and Style
fashionModel of the moment shoots for first time with catwalk veteran
Sport
Alexis Sanchez, Radamel Falcao, Diego Costa and Mario Balotelli
footballRadamel Falcao and Diego Costa head record £835m influx
News
i100
Arts and Entertainment
Olivia Colman topped the list of the 30 most influential females in broadcasting
tv
Life and Style
techIf those brochure kitchens look a little too perfect to be true, well, that’s probably because they are
Arts and Entertainment
Danish director Lars von Trier
filmEnglish-language series with 'huge' international cast set for 2016
News
ebooksAn unforgettable anthology of contemporary reportage
Life and Style
tech
News
Kelly Brook
peopleA spokesperson said the support group was 'extremely disappointed'
Sport
Andy Murray celebrates a shot while playing Jo-Wilfried Tsonga
TennisWin sets up blockbuster US Open quarter-final against Djokovic
Arts and Entertainment
Hare’s a riddle: Kit Williams with the treasure linked to Masquerade
booksRiddling trilogy could net you $3m
Arts and Entertainment
Alex Kapranos of Franz Ferdinand performs live
music Pro-independence show to take place four days before vote
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Derivatives Risk Commodities Business Analyst /Market Risk

£600 - £800 per day: Harrington Starr: Derivatives Risk Commodities Business A...

Power & Gas Business Analyst / Subject Matter Expert - Contract

£600 - £800 per day: Harrington Starr: Power & Gas Business Analyst/Subject Ma...

Infrastructure Lead, (Trading, VCE, Converged, Hyper V)

£600 - £900 per day: Harrington Starr: Infrastructure Lead, (Trading infrastru...

Planning Manager (Training, Learning and Development) - London

£35000 - £38000 per annum + benefits: Ashdown Group: A highly successful, glob...

Day In a Page

'I’ll tell you what I would not serve - lamb and potatoes': US ambassador hits out at stodgy British food served at diplomatic dinners

'I’ll tell you what I would not serve - lamb and potatoes'

US ambassador hits out at stodgy British food
Radio Times female powerlist: A 'revolution' in TV gender roles

A 'revolution' in TV gender roles

Inside the Radio Times female powerlist
Endgame: James Frey's literary treasure hunt

James Frey's literary treasure hunt

Riddling trilogy could net you $3m
Fitbit: Because the tingle feels so good

Fitbit: Because the tingle feels so good

What David Sedaris learnt about the world from his fitness tracker
Saudis risk new Muslim division with proposal to move Mohamed’s tomb

Saudis risk new Muslim division with proposal to move Mohamed’s tomb

Second-holiest site in Islam attracts millions of pilgrims each year
Alexander Fury: The designer names to look for at fashion week this season

The big names to look for this fashion week

This week, designers begin to show their spring 2015 collections in New York
Will Self: 'I like Orwell's writing as much as the next talented mediocrity'

'I like Orwell's writing as much as the next talented mediocrity'

Will Self takes aim at Orwell's rules for writing plain English
Meet Afghanistan's middle-class paint-ballers

Meet Afghanistan's middle-class paint-ballers

Toy guns proving a popular diversion in a country flooded with the real thing
Al Pacino wows Venice

Al Pacino wows Venice

Ham among the brilliance as actor premieres two films at festival
Neil Lawson Baker interview: ‘I’ve gained so much from art. It’s only right to give something back’.

Neil Lawson Baker interview

‘I’ve gained so much from art. It’s only right to give something back’.
The other Mugabe who is lining up for the Zimbabwean presidency

The other Mugabe who is lining up for the Zimbabwean presidency

Wife of President Robert Mugabe appears to have her sights set on succeeding her husband
The model of a gadget launch: Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed

The model for a gadget launch

Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed
Alice Roberts: She's done pretty well, for a boffin without a beard

She's done pretty well, for a boffin without a beard

Alice Roberts talks about her new book on evolution - and why her early TV work drew flak from (mostly male) colleagues
Get well soon, Joan Rivers - an inspiration, whether she likes it or not

Get well soon, Joan Rivers

She is awful. But she's also wonderful, not in spite of but because of the fact she's forever saying appalling things, argues Ellen E Jones
Doctor Who Into the Dalek review: A classic sci-fi adventure with all the spectacle of a blockbuster

A fresh take on an old foe

Doctor Who Into the Dalek more than compensated for last week's nonsensical offering