WPP boss forecasts tough few quarters for industry

WPP chief executive Sir ­Martin Sorrell has started to question the resilience of the PR industry - months after suggesting the sector was 'well placed' to weather a rocky 2009.

Speaking out: Sorrell
Speaking out: Sorrell

Sorrell spoke to PRWeek on Tuesday as WPP Group, which owns Burson-Marsteller, Hill & Knowlton and Ogilvy PR, ­posted its latest results.

WPP revealed that PR and public affairs revenues had slumped by 6.1 per cent on a like-for-like basis compared with the same ­period the previous year.

In contrast, advertising and media investment management fell by just 3.9 per cent.

‘It’s the first quarter for some time that we’ve seen PR under a bit of pressure,’ Sorrell told PRWeek.

‘You will continue to see a similar trend over the next few quarters. PR tends to be more project-driven – when people are looking for discretionary cuts they tend to go after projects.’

The comments from Sorrell, a respected economic forecaster, will pour cold ­water on the notion that PR budgets are being impacted less by the recession than those of other marketing ­disciplines.

In late 2008, Sorrell claimed the PR sector had enjoyed a ­‘remarkable renaissance’ and forecast that the trend would continue at his PR agencies into 2009.

First quarter results from key rival Omnicom Group, which owns Fleishman-Hillard, Ketchum and Gavin Anderson, also saw PR suffer more than other marketing disciplines.

PR revenue was down 10.5 per cent for the quarter, compared with a 4.3 per cent ­decline in traditional media advertising.

But at Interpublic Group (IPG), which owns ­Weber Shandwick and Golin Harris, chairman and CEO Michael Roth said PR revenues had shown ‘only a slight organic decrease’.

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