All the biggies – WPP, Omnicom, Publicis Groupe and Interpublic – have now reported their 2010 revenue and profits and it’s pretty much the same message: a big bounceback for traditional advertising (as against all this new-fangled digital stuff), especially in North America.
That won’t stop them pursuing the aforementioned digital stuff of course but the strong message from the recent recession and the recovery is that advertising isn’t dead yet and the world’s bigger companies are, arguably, taking it more seriously than they have for years.
If the years from 2000 to 2010 were the decade of financial engineering, 2010 and onwards may be a new golden decade of marketing and advertising.
WPP CEO Sir Martin Sorrell didn’t go quite this far when talking today about WPP’s 2010 results – revenue and margin growth ahead of expectations particularly in the last quarter and full year profits of £851m – but he did repeat that companies were investing more in advertising as an alternative to more long-term capital investment (which means employing more people) and expensive acquisitions.
And the world’s big companies are sitting on mountains of cash as the cost-cutting of the last couple of years has flowed through to profits. So the budgets are most definitely available.
Are there any clouds on the horizon? Stellar revenue growth will now be harder for the big marcoms companies to achieve simply because the comparatives with 2010 will be more testing than 2009.
And Sorrell may be looking at his own agency brands and wondering if they’re in as good shape as they could be.
In terms of the UK, judging by Campaign and Nielsen’s top 20 for 2010, RKCR/Y&R is flying (up to third place despite the pesky distraction of breakaway Adam & Eve), JWT is in danger of slipping from the top ten (a staggering prospect for veteran watchers of the UK agency scene), Ogilvy seems becalmed and Grey is in danger of slipping from the Premiership to the Championship.
49 per cent-owned CHI is ahead of JWT which is pretty staggering as well and will surprise some observers who felt that the agency had lost its edge since the WPP deal.
So it’s the proverbial mixed bag (in the UK) and there may be more comings and goings among the top management of WPP-owned companies.
But £851m profit is also a pretty staggering feat for a company whose assets are often said to go up and down in the lift and, sometimes, out of the door (if they can avoid Sir Martin’s lawyers that is).