"2009 will be a very tough year."
So said WPP Group today, echoing the sentiments of its holding-company brethren even as it reported third-quarter revenue growth in line with most analysts' expectations.
The U.K.-based firm said its Q3 revenue improved 16 percent to $2.85 billion compared to a year ago. That's a 6 percent boost in constant currency terms and a 3 percent like-for-like gain.
The strength of the euro and U.S. dollar against the British pound sterling mainly drove the numbers, WPP said.
North America was the laggard for the firm, with revenue flat in constant currencies during Q3. In the U.K., revenue growth was less than 3 percent. "Overall, the second, more severe leg of the financial crisis...has had the most impact on the communications services markets in the United States and the U.K.," the company noted.
WPP's Q3 performance was best in its Asia Pacific, Latin America and Africa sector, as well as its Central and Eastern Europe region, where revenue climbed about 16.5 percent in each. The company also performed well in Continental Europe, where revenue improved more than 7 percent.
For the first nine months of the year, WPP's revenue is up almost 15 percent to nearly $8.5 billion. In constant currencies, the gain is 7.5 percent; on a like-for-like basis, it's just shy of 4 percent.
CLICK HERE FOR WPP'S COMPLETE Q3 RESULTS.
Despite the solid year so far, WPP's pronouncements weren't especially upbeat today, and the company noted that its headline operating margin was flat for the first nine months of '08 and cast doubt on its ability to meet its 15.5 percent margin target for the year. "Attaining this will not be easy," WPP said.
Speaking at an industry panel in New York yesterday, Rino Scanzoni, chief investment officer at WPP's GroupM media-agency division, said the overall marketplace could be mired in a recessionary climate for several years--and the downturn could last significantly longer than the dip experienced in 2001. "This will take longer to get out of than one or two quarters," he said. "It will be a very slow process. We could be going through this in three years."
In recent weeks, WPP has instituted a global hiring freeze as the economy has worsened.
Separately, WPP updated its offer for research giant Taylor Nelson Sofres, reporting yesterday that shareholders accounting for over 95 percent of TNS shares have agreed to sell. The offer was extended until Nov. 12 to allow remaining shareholders to get aboard.
Earlier this week, holding-company rivals IPG and Publicis Groupe also warned that the ad business was in for rough times in coming months, even as they issued decent Q3 and year-to-date numbers.