WPP Says Growth In America Is Now WORSE Than Europe

WPP Group, the world’s largest ad agency holding company, reported its Q2 2012 results and the revenue breakdown shows a complete reversal of fortunes for North America: When previously growth was strong in the U.S. and Canada, now it is contracting; and where growth in Europe was anemic, now it is robust.

Here’s WPP’s chart:

WPP

Photo: WPP

The key metric is “LFL,” or like-for-like” revenues. Note that North America declined 0.6% in Q2 while Europe grew between 0.8% – 3.5%.

The U.S. ad economy is now doing worse than Belgium, Italy and Japan:

WPP

Photo: WPP

As usual, ad agency revenue growth has continued its strong correlation with U.S. GDP as a whole. As the U.S. economic growth slowed, ad revenues matched the retraction, step for step:

GDP ad agency revenues

Photo: Company disclosures, BEA

Ad agency revenues hinted at the retraction back in Q1, also. Ad agency revenues are—arguably—a good proxy for economic growth as a whole because they come from a wide variety of consumer-facing companies who often adjust their spending as a percentage of total sales.

Related:

  • DANGER: This Ad Agency Indicator Shows Global Slowdown In Corporate Spending Growth

NOW WATCH: Briefing videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.