light at the end of the tunnel for the advertising industry was not a mirage: all the evidence points to a broad and sustained recovery. The large agencies reported robust revenue growth in the second quarter, with Interpublic growing sales by nine per cent, and Omnicom and Publicis up by six and seven per cent respectively. WPP should see similar growth in the US and emerging markets when it reports tomorrow, although Europe will prove something of a laggard.
With consumer goods giants like Proctor and Gamble set to boost their marketing spend in the second half, the recovery should continue, albeit at a less eye-catching rate as firms contend with tougher comparatives.
For those willing to bet on the advertising recovery – a play that is clearly linked to the global economy – WPP is an obvious option. It is well-diversified geographically, and generates over a quarter (27 per cent) of revenues from fast-growing digital sales. And if Sorrell is willing to put his money where his mouth is (as UBS suggests in the story above), investors should feel comfortable about doing the same.