WPP, the world’s biggest advertising group, has grown its revenues back to pre-pandemic levels a year sooner than expected because of a record-setting rebound in global marketing spend.
WPP reported that underlying revenues increased by 19.3% in the second quarter, the fastest rate of growth the company has ever recorded, with clients ploughing money into advertising and marketing as the post-pandemic business recovery continued apace.
The group, which raised its full-year guidance after beating City expectations, reported a 16% rise in like-for-like revenues to £6.1bn in the first half of the year.
“We are very pleased,” said Mark Read, the chief executive at WPP. “We expect momentum to continue in the second half of the year. “We have returned to 2019 levels in 2021, a year ahead of our plan, with good momentum into 2022.”
WPP said the global advertising recovery was being driven by clients focusing more of their budgets on digital media. GroupM, the group media buying arm of WPP, is predicting global ad growth of 19% this year. Within that, digital media spend will rise at 21% while TV ad spend will increase by 9%.
Revenues grew in all regions in the first half of the year. The UK and western continental Europe showed the strongest growth, with revenues up 22% and 24% respectively on a like-for-like basis.
While business is booming, progress on a return to office working remains slow in many of WPP’s markets. In the UK, where WPP employs about 10,000 people, on any given working day about 9% of staff are in the office, while in the US the rate is just 5%. In Europe, Germany is at 15% and Italy 20%. In China, 79% of staff are in on an average day.
“I think the important thing to point out is that these results – record net sales growth and a vast improvement in profitability – were achieved with the majority of staff working from home,” said Read. “In the short term it is manageable, but over the long term we will get back to a bit more of a balance.”
Shares in WPP rose by 2.2% in early trading.