WPP profits surge as US bounces back

 
Steve Dinneen
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WPP saw its pre-tax profit surge a staggering 36 per cent, with its US operations staging a far stronger than expected recovery.

The advertising giant, usually keen to talk up the performance of its digital advertising operations, saw traditional media race ahead of expectations, growing by more than six per cent in the second quarter after a drop of almost 10 per cent last year.

The world’s largest ad firm by sales, seen as a barometer for the global economy, hailed the performance of television advertising, a medium it says cannot be written off.

It was boosted by the World Cup, with July seeing a jump of seven per cent year-on-year as advertisers clamoured to beam their brands into homes across the world.

New media, including social networking, now stands at approximately 28 per cent of the firm’s revenue, with the firm predicting it will account for two thirds of its income in three years.

WPP now believes the global economy has avoided the dreaded double-dip recession but it remains cautious about the future, with output in the US unlikely to continue its blistering pace.

A WPP spokesman said: “The group’s advertising businesses achieved a 180 degree turnaround from a four per cent decline in the first quarter to a four per cent gain in the second... Traditional advertising has recovered sharply.

Sorrell said: “We’re seeing a continual improvement but there are still concerns in Europe and the US. There is a generally cautious tone. But it’s moving in the right direction.”