Arun Sudhaman 23 Aug 2011 // 11:00PM GMT
LONDON--WPP, the owner of numerous PR agencies including Burson-Marsteller, Hill & Knowlton and Ogilvy PR, has reported that PR earnings grew by five percent during the first half of this year, on a like-for-like basis.
The result saw PR grow at a slower pace than WPP’s two biggest units: Advertising and media investment management improved by 8.1 percent, while branding & identity, healthcare and specialist communications increased by 7.3 percent. PR did, however, outperform consumer insight, which grew by 2.3 percent.
The report mirrors the first quarter of this year, when PR growth (+5.6 percent) again lagged advertising (+13 percent) and branding, healthcare and specialist comms (+12 percent).
WPP’s PR growth is also behind the first-half performance at Interpublic Group, which led listed groups by increasing PR revenues by 9.5 percent. Last month, Publicis Groupe, which owns flagship PR network MSLGroup, reported that PR revenues had grown by five percent in the second quarter of 2011. At Omnicom Group, PR income increased by just 1.5 percent for the year-to-date.
Overall, WPP reported that like-for-like revenues grew 6.1 percent in the first half of this year, with gross margin up by 6.8 percent. In the second quarter, like-for-like revenues were up 5.6 percent, less than the first quarter 6.7 percent.
In a statement, WPP said that results were “so far so good in 2011, with forecasts in reasonable heart, but there are storm clouds and we still have to see how the latest stock market crisis affects consumer and client thinking and actions.”
“Plans, budgets for 2012 and forecasts will, therefore, be made on a conservative basis and considerable attention is still being focused on achieving margin and staff cost to revenue or gross margin targets.”
Unsurprisingly, given WPP CEO Martin Sorrell’s many statements on the subject, the group continues to focus on growth from “new markets, new media and consumer insight, along with the application of technology and data analytics.”
“Clients will be increasingly looking for growth, advice and resources in the BRICS, CIVETS and Next 11, in digital communications and in understanding consumer motivations and changing media consumption habits.”