One of the world's largest ad agency holding companies, WPP, sees its 2008 results being stronger that last year. In the scheme of things, that would seem to make no sense. WPP is a global firm, so perhaps a great deal of this improvement will come from outside the US and Europe.
According to Reuters, "The group, whose agencies include JWT and Young & Rubicam, said it had not felt any impact from global financial crises but warned again that the `real world' could be affected in 2009." What happened to the 2008 global economic slowdown?
In many ways the comments echo those from News Corp (NYSE: NWS) and CBS (NYSE: CBS). Both have indicated that they are not seeing any meaningful impact of the economy on their advertising revenue. That could be a sign that any recession is coming in pockets of the economy, but is not hitting it across the board.
WPP may be right. While the airline, auto, retail, and financial sectors are cutting back, there is evidence that consumer goods, energy, and tech companies are still recording strong sales. That may mean that marketing dollars from these areas of the wider economy are fine.
WPP has to be getting the revenue growth from somewhere. Perhaps its results are a sign that concerns about a recession are a bit overblown.
Douglas A. McIntyre is an editor at 247wallst.com
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