The ad market is in full-on retreat mode — if you’re running a big media conglomerate with lots of exposure to the U.S. But if you’re running a big advertising conglomerate, with lots of international reach, things aren’t so bad.
We’ve seen that story play out repeatedly this spring and summer, and here it is again today: WPP, the world’s second-largest ad company, says the first half of 2008 was just fine, and that the rest of the year looks ok, too. Profits were up about 14%, pushed in large part from markets like India and China. And the combination of Olympics spending and the U.S. presidential race means the reminader of the year will be good, too, the company said. And it appears to be adapting to the larger changes in the marketplace: 25% of revenues now come from “direct and digitally-related activities”.
But surely, at some point, if the big media companies are seeing ad dollars shrivel, that has to show up at the big congolmerates, right? How long can this go on for? Not much longer, WPP warns:
“The prospects for 2009 remain less certain, particularly if the United States and Western European economies continue to be impacted by the financial crisis and commodity price increases. In addition, the new United States President will have to wrestle with twin fiscal and budget deficits in early 2009 and post the Olympics, Chinese growth may slow due to inflationary (particularly food price) concerns and the impact that a weakening United States economy has on the rest of the world.”
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