Advertising back on track as WPP chief calls an end to the slump

THE end of the downward spiral in advertising was called yesterday by Sir Martin Sorrell, the head of WPP, the world's biggest advertising group.

WPP, posting pre-tax profits down 16 per cent to 812 million for 2009, said: "We have clearly moved from a period of staring into the abyss to 'less worse' and now to stabilisation, if not growth, as yet."

Sorrell raised hopes for "a more stable year" in 2010. But he added that, even with joint tailwinds from emerging markets and digital sales, as well as the football World Cup this summer, the group was only likely to record flat revenues this year.

Sorrell said earlier this week that he had seen a significant change in trading since November, when revenues started to stabilise.

WPP said yesterday: "Like-for-like revenues were almost the same in January 2010, against January 2009, an encouraging return to stability – a trend first indicated in November 2009.

"Although this return to stability seems widespread both geographically and functionally, there is no marked growth as yet, even against weak comparatives."

It came as WPP, which owns famous names such as Ogilvy & Mather and J Walter Thompson, said net new billings leapt to nearly $2 billion (1.3bn) in the first two months of 2010 as the Winter Olympics in Vancouver provided a new year boost for advertisers. That compared with $4.8bn (3.1bn) net new billings in 2009 as a whole.

WPP said other events on the industry calendar this year included the Asian Games in Guangzhou, the World Expo in Shanghai and the mid-term Congressional Elections in the US.

WPP believes a stronger second trading half this year will offset a weaker first half. The sector suffered a dire 2009 as the recession bore down on advertising spend, hitting media groups across the board.