PR revenue drives WPP Group profits

LONDON: Ogilvy and Hill & Knowlton were star performers in the latest annual results of global communications group WPP, with PR revenues up 33% from 1998 and profit margins rising to 13%.

LONDON: Ogilvy and Hill & Knowlton were star performers in the latest annual results of global communications group WPP, with PR revenues up 33% from 1998 and profit margins rising to 13%.

LONDON: Ogilvy and Hill & Knowlton were star performers in the

latest annual results of global communications group WPP, with PR

revenues up 33% from 1998 and profit margins rising to 13%.



The PR and public affairs division of the communications conglomerate,

which now accounts for 8.2% of revenue, increased to dollars 290 million

from dollars 218 million in 1998, with pre-tax profits of dollars 38

million up from dollars 25.4 million.



WPP reported overall increases in revenues of 13% to dollars 3.5

billion, and pre-tax profits of dollars 413 million, up 20%.



Fueled by the acquisition of Alexander Communications (now Alexander

Ogilvy) and entertainment firm Baker Winokur Ryder, Ogilvy posted

revenues of dollars 124 million, up 79%. Organic growth was 33%. H&K

revenues rose by nearly 18% to dollars 243 million, with margins above

11%. Revenues included numbers from the 1999 purchase of tech specialist

Blanc & Otus.



Revenue from non-advertising divisions now accounts for 53% of the

overall mix at WPP. Chairman Martin Sorrell told PRWeek that he expected

non-advertising revenue to rise to more than 75% over the next few

years. ’PR is as effective - and maybe more so - than other

channels.’



Sorrell believes non-advertising revenue will continue to grow as

clients begin to look for ways to avoid the rising cost of airtime (up

as much as 10%) on the broadcast networks.



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