PR industry bucks the trend...

Two of the PR industry's biggest players revealed strong annual growth this week, fuelling hopes that PR will survive the downturn in rude health.

‘Stronger’ WPP’s Sorrell is confident of further revenue highs
‘Stronger’ WPP’s Sorrell is confident of further revenue highs

WPP reported PR and public affairs as its fastest-growing disciplines in 2008, while Chime Communications, owner of Bell Pottinger, said the ‘extremely good’ performance of its PR division was behind the group’s 19 per cent rise in profit before tax.

‘It has been a very, very good year, particularly in the PR business,’ Chime’s chairman Lord Bell told PRWeek.

Its PR division saw operating inc­ome climb 13 per cent year-on-year to £61.3m and, notably, rep­orted a stronger second half of the year than the first.

It was a similar story at WPP, which saw PR and pub-lic affairs grow revenues by 4.9 per cent on a like-for-like basis, ahead of advertising, research and branding units.

‘PR and public affairs continues to be relatively stron­ger,’ said WPP CEO Sir Martin Sorrell on a conference call with analysts.

The group pointed to a str-ong performance by Cla­r­ion Communications in the UK, along with its three global networks – Burson-Marsteller, Hill & Knowlton and Ogilvy PR.

Surprisingly, PR services earned £210m in the fourth quarter of 2008, exceeding third-quarter revenue of £184.2m, while second-half PR revenue rose by more than 12 per cent.

The performance comes after both groups reined in costs in advance of a toug­her 2009. WPP initiated job cuts at agencies where staff costs exceeded 60 per cent of revenue, making cuts at Ogilvy and Cohn & Wolfe and shutting Blanc & Otus’ UK office.

Chime has taken ten per cent out of the headcount across the business, although this figure is lower in its PR businesses. ‘We have done it slowly through attrition,’ said Bell.

‘We have learned from the last recession that you do not wait until D-Day to take act­ion, you get on with it on a steady basis as the environment worsens.’

WPP has revised its 2009 forecast down from flat revenue growth to a two per cent drop. However, Sorrell expects a relative improvement in the second half of this year, followed by a ‘recovery of sorts’ in 2010.

Bell refused to be drawn on a detailed outlook, only saying the environment was ‘uncertain’.

 

Timeline

23 March Huntsworth Group to report results

10 March Chime Comms reveals 30 per cent growth in operating profit for PR

6 March WPP reports 4.9 per cent growth in PR and PA

3 March Havas posts a 4.7 per cent rise in revenues in 2008, but does not break out PR earnings

27 February
Interpublic Group reveals that PR grew by high single-digits in Q4

10 February Publicis posts a one per cent decline in 2008 revenues, but does not comment on PR

10 February
Omnicom Group reports a drop of 0.4 per cent in 2008 PR revenues

 

4.9% WPP’s PR and PA like-for-like 2008 revenue growth

£725m 2008 revenues from WPP’s PR division

16.6% WPP’s overall reported profit margins for PR and PA

£18.1m Chime’s 2008 operating profit after a 15 per cent growth

19.7% Operating profit margin for Chime’s PR division

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