Tournament isn’t Holy Grail

Steve Dinneen
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WPP hopes the World Cup will help prevent yet another annus horribilis for advertising. The signs are good; the advertising market will remain almost flat this year, a reversal from the steep declines seen in 2007 and 2008. This will be largely aided by a dramatic spike in revenue – as much as 16 per cent year-on-year ­– in the lead-up to the World Cup. Advertising accounts for 40 per cent of WPP’s revenues and the huge interest in the tournament in emerging Asian markets make it a massive opportunity for the world’s largest advertising firm.

WPP – a well managed firm – did well to cut its headcount in the second half of last year, by around 6.8 per cent but now it needs to continue the forward momentum in revenue seen in the first two months of 2010, in which it has booked £1.3bn in sales.

But the “World Cup effect” should not be mistaken for a complete recovery in the market. The tournament, along with advertising spend in the lead-up to the election in the UK, the mid-terms in the US and the Shanghai Expo, will provide welcome relief from the black clouds of recent times. But these shots in the arm are temporary. While the UK advertising market is slowly recovering, it will take more than exhibition pieces to set it back on its feet.