Media congolomerate after media congolomerate — most recently, Viacom — says they’re not seeing an ad slowdown. But WPP, the world’s second-largest ad copmany, says it thinks a global one is coming next year, and CEO Martin Sorrell says he’s already seeing a “little bit” of one in the U.S.
Sorrell’s comments came after his company delivered solid earnings (up 6.9%) and decent organic revenue growth (up 5%).From WPP’s release:
It seems inevitable that the ‘real’ world will at some point in time be affected by the private equity, sub-prime, insurance monoline, and housing market crises, that we have seen. In our view, this seems more likely to be in 2009, when a slow-down (not a recession) in the United States will be hard to avoid, particularly as a new United States President tries to deal with heavy government spending and twin deficits, and ‘kitchen-sinks’ his or her budgets, in front of a possible eight year “reign”, just as new CEOs tend to do with companies – and there are no mini- or maxi-quadrennial events to stimulate economic activity. The decoupling theories will also be challenged, as China may pause a little, after the stimulation of the Beijing Olympics, and the world continues to catch cold when America sneezes – if not influenza, as it used to be.
WPP also said it spent $1.15 billion on acquisitions last year. About half of that went to 24/7 Real Media, and the rest on a flurry of deals — none of which were for SpotRunner, the make-your-own ad shop the NY Post was convinced WPP would buy.