WPP, Aegis Report First-Quarter Results

Digital, emerging markets driving growth

WPP Group revised its 2012 forecast upward as it reported like-for-like revenue rose 4 percent in the first quarter. The Dublin-based company now expects “slightly better” growth of over 4 percent this year and a stronger second half.

Like-for-like revenue excludes the financial impact of acquisitions and currency fluctuations.

WPP’s reported revenue in dollars climbed 5.5 percent to $3.76 billion in the quarter. The company also said first-quarter profits, which it is not required to disclose, and operating margin are above budget and ahead of last year.

Like its ad industry peers, WPP’s growth was fueled by emerging markets and digital operations. WPP also said it expected the 2012 quadrennial boost from the UEFA Football Championships, Summer Olympics and the U.S. presidential elections to increase growth in industry ad revenue by 1 percent this year.

Similarly, media and digital company Aegis said it had a strong Q1, posting a 8.1 percent increase in organic revenue. While Aegis also benefited from growth in emerging markets and its digital business, the company cited its operations in the Americas, where organic growth rose 20.3 percent in the quarter. The London-based holding company singled out new business gains in North America over the last two years and strong digital operations in Brazil.

WPP, in releasing its results, said the company’s advertising and media businesses were the strongest performers in the first quarter, with like-for-like revenue growth increasing 6.2 percent. Among its ad networks, WPP said Ogilvy & Mather and Grey had a good start to the year, particularly in the U.S. and Latin America.

The world’s largest marketing service company tempered its better-than-expected results by voicing concerns about the ongoing Eurozone crisis, tensions in the Middle East, a Chinese economic hard-landing and rising commodity prices which undermined global consumer and corporate confidence in the second half of 2011.

Nonetheless, WPP said ad and marketing spending continued to rise as Western multinationals and new-market based companies invest in brands in fast-growing markets. It's also seeing spending in more mature economies like the U.S. and Western Europe where they need to maintain or increase market share.