Sir Martin Sorrell’s WPP has dispelled worries about the UK advertising market by reporting strong growth of 3.7 per cent in the first quarter at a time when the British economy has been looking anaemic.
Global revenues at the world’s biggest advertising group, the owner of agencies such as Ogilvy & Mather, JWT and AKQA, climbed 2.1 per cent on a like-for-like basis to £2.53bn. North America and western Europe were both weak.
WPP’s UK performance was better than its main rivals – notably Publicis Group, the owner of Saatchi & Saatchi, which saw UK sales tumble an alarming 6.1 per cent earlier this month.
Sir Martin described it as a “respectable-to-good start to the year” as he improved margins by trimming 600 jobs from the 116,000-strong staff.
Clients, which include HSBC, Vodafone and Unilever, remain “extremely cautious”. Advertising is staying firm, but spending on public relations has been falling.
“It’s tough – it’s what I call hand-to-hand combat,” Sir Martin said. “The move to digital is probably gaining momentum”.
WPP is poised to publish its annual report which will reveal what changes the board has made to Sir Martin’s pay after 60 per cent of shareholders voted against his £13m package last year.
Sir Martin declined to comment except to say: “The compensation committee had very constructive consultations with the top 40 per cent of shareholders and they’ve made proposals in the annual report.”