Aegis CEO Jerry Buhlmann has echoed the confident noises from WPP’s Sir Martin Sorrell earlier in the week, saying he sees no sign (yet) of advertisers cutting back despite the turbulence in the global economy.
Aegis half year revenues, including about-to-be-sold researcher Synovate, grew 7.3 per cent on an organic basis to £756.8m, with pre-tax profits up 40.7 per cent to £35.6m. Like-for-like revenues at the media buying end of Aegis rose 7.8 per cent.
This makes Aegis roughly a tenth the size of the mighty WPP which reported £334m half year profits earlier in the week.
What nobody knows is the effect the downturns in America and Europe will have on next year’s budgets. Aegis-owned Carat has reduced its forecast of global advertising spending for 2011 from 5.7 per cent, predicted in March, to five per cent, still ahead of pre-recession levels at $481bn. It expects around six per cent growth in 2012, boosted by,among other things, the London Olympics.
For this year though the UK has been sharply downgraded from 4.1 per cent to two per cent but Carat forecasts ten per cent plus growth from Russia Turkey and China. Buhlmann announced that Aegis is to buy Russian outdoor company Master Ad for an initial €15m with some of the £525m it is due to receive from French researcher Ipsos for Synovate.
Aegis is thought to have up to £400m to spend on acquisitions, co-incidentally (or not) the figure WPP’s Sorrell said he was aiming for this year.
A lot can happen in the global company between now and budget-setting time for 2012 towards the end of the year.
Both Buhlmann and Sorrell, and no doubt their counterparts in other international marcoms businesses and the bosses of local agencies too, will be praying that politicians in the US, Europe and Japan finally get their act together to stabilise the global economy.
That, however, is by no means a foregone conclusion.