LONDON: Following the lead of rivals Omnicom and Interpublic Group, marketing services holding company WPP became the latest in the sector to say that its PR and public affairs business was showing signs that it has finally "stabilized."
WPP CEO Sir Martin Sorrell made those comments on August 22 during the company's 2003 first-half earnings conference call, even though the company used the same call to announce that its PR revenues declined just under 3% for the first half of its fiscal year.
Despite the revenue erosion, Sorrell found a silver lining in margin improvement at WPP's PR firms. "Pleasingly, in public relations, public affairs, and despite the revenue decline, we've had strong margin performance," Sorrell said.
The company's PR holdings saw their collective profit margin rise by 1.3% to 13.2% in the period as compared to 2002. As a reason for the boost, Sorrell cited WPP's strong PR presence in North America, which he said "is growing at a faster rate than other territories."
Sorrell also said that there is evidence to suggest that clients will be looking to non-advertising marketing disciplines including PR "in order to stimulate the effectiveness and reach of their advertising and promotion." WPP PR firms include Hill & Knowlton, Ogilvy PR, Burson-Marsteller, and Cohn & Wolfe.
WPP's net income fell 17% in the first half to $150 million (?95.2 million), while revenue fell 2.5% to $3 billion (?1.91 billion) from the first half of 2002.