DUBLIN, IRELAND: WPP Group's PR and public affairs revenue grew 0.3% on a like-for-like basis in the second quarter of 2012 to more than $369 million. Operating margins in the sector fell 2 points to 13.5% in the quarter.
PR and public affairs revenue was up 1% in the first six months of the year on a like-for-like basis, compared with the same period of 2011, to $725.7 million. Operating profit in the first half of 2012 was $98 million.
The owner of Burson-Marsteller, Cohn & Wolfe, Hill+Knowlton Strategies, and Ogilvy Public Relations specifically praised Cohn & Wolfe and Hering Schuppener in Germany for strong performances in the second quarter.
“We did a restructuring 18 months ago to put talent in the right positions, and we have a great team. Talent management in our business is the most important thing,” said Donna Imperato, CEO of Cohn & Wolfe. “We're very creative, but we also have more organization in place now to take a more systematic approach to the business.”However, it said in its interim results statement that “the US, UK, and Asia-Pacific grew less strongly in the second quarter, with the public affairs business in Washington and Penn Schoen Berland, the US polling business in Burson, particularly affected.”
Burson CEO Mark Penn left the firm in July to join Microsoft and also stepped down from his role leading Penn Schoen Berland. Former chief strategy officer Don Baer was tapped to replace Penn at Burson and remained Penn Schoen Berland's chairman.
Burson declined to comment on its financial results.
WPP as a whole reported like-for-like revenue growth of 3.2% in the second quarter, compared with the same period of 2011, to more than $4 billion. The company cut its annual growth forecast for this year from 4% to 3.5%, due to increasing customer cautiousness in the US and Western Europe.
In North America, the holding company's second-quarter like-for-like revenue fell 0.6% to approximately $1.4 billion. North America revenue growth slowed following reduced client spending in healthcare, custom research, call center operations, and public affairs in Washington, WPP said.
Asia Pacific, Latin America, Africa and the Middle East, and Central and Eastern Europe was the holding company's strongest region, with like-for-like revenue up 9.8% in Q2 to approximately $1.2 billion, compared with the prior year.
For the first six months of the year, WPP's revenue was up 3.6% on a like-for-like basis to nearly $7.9 billion. In North America, revenue increased 0.4% on a like-for-like basis compared with the prior year to nearly $2.8 billion. North American first-half operating profit was approximately $378 million.
Comparatively, it is understood that Edelman's revenue grew 9.2% during the first half of 2012.
Revenue measurement on a like-for-like basis excludes the impact of acquisitions and currency.
WPP said in the statement that 2013 will present a challenge because it will not have a major event like the Olympic Games or the US presidential election to boost ad spending.
“Although current real and nominal GDP forecasts are even stronger for 2013 than 2012, there will be no max- or mini-quadrennial events in that year,” the holding company noted in its earnings statement. “A reelected or newly elected US president will have to confront the growing US budget deficit, while possibly dealing with a deadlocked Congress.”
The group also said it will move its headquarters from Ireland back to the UK.
Note: All figures were converted from British pounds to American dollars using the XE currency exchange calculator.