Global advertising groups are seeing better than expected revenue growth in the first part of 2022.
They forecast a good run to the end of the year, with annual growth forecast at 5% to 6%, but after that road conditions are less distinct.
Inflation, interest rate rises, consumer confidence, the war in Ukraine are all warning signs of potential economic potholes.
However, Mark Read, CEO, WPP, says many clients are experiencing continued strong growth as economies open and that consumer spending is holding up strongly.
WPP reported a “strong” March quarter with like-for-like revenue up 8.1% to £3.091 billion.
The world's biggest advertising group now expects full year growth to be in the range of 5.5% to 6.5%, up from previous estimates of 5%.
Read: "We are mindful of the economic risk, but our guidance takes into account what we've seen from clients to date and the economic outlook over the year."
Havas Group posted a 11.3% lift in organic revenue to €591 million in the March quarter.
Net revenue was €564 million, up by 18% compared to the first quarter of 2021.
Omnicom reported organic growth of 11.9% in the March quarter with a “strong” performance across all disciplines and geographies continuing the lift from the negative effects of the pandemic .
Revenue was $US3.41 billion, down 0.5% compared to the same three months lost year but ahead of analyst expectations by $US120 million.
The global advertising group increased its full year forecast for organic revenue growth to 6% to 6.5%, from its previous guidance of 5% to 6%.
CEO John Wren: "We've entered '22 in a very strong position, having had a very successful 2021."
Publicis Groupe posted organic growth of 10.5% in the March quarter, above market analysts' expectations of 5.6%, compared to 2.8% for the same three months last year.
The company updated full year guidance with organic growth now at the upper end of the +4 to +5% range.
Publicis reported continued momentum in the US. at +8.0%, robust recovery in Europe at +14.9% fueled by France and the UK, plus solid growth in Asia at +14.4% with China double-digit again.
Dentsu upgraded its outlook for the year after posting a 9.1% lift in organic growth for the March quarter.
The record high first quarter included Dentsu Japan Network reporting 10% organic growth and Dentsu International 8.4%.
The Australia business reported 12% organic growth with continued recovery with new client wins across Media, CXM and Creative.
Dentsu now forecasts organic growth at 4% to 5% for the full year, upgraded from 4% announced in February, with Dentsu Japan Network at 2% to 3% and Dentsu International 5% to 6%.,
S4 Capital, Martin Sorrell's pure-play digital advertising group, posted 40% like-for-like revenue growth in the March quarter, with an optimistic outlook for the full year.
The company grew "strongly" and ahead of market guidance.
Reported revenue was up 70.1% to £206.8 million and gross profit/net revenue 64.6% higher at £171.1 million. Like-for-like and proforma revenues and gross profit/net revenue were up 40.6% and 34.5% respectively.
S4 Capital has maintained its like-for-like gross profit/net revenue growth guidance of 25%.
"Clients continue to be focused on taking back control of their marketing functions, which favours our in-house, embedded or even outsourced capabilities," Sir Martin said.
"In addition, the privacy decisions by both Google and Apple and the resultant crumbling of third party cookies have all played to the strengths of our global data and analytics network and stressed the fundamental importance of first party data and the walled gardens.
"Our new technology services practice caters to the growing and persistent demand for digital marketing transformation.
"Agility continues to be the key corporate attribute and our go-to-market mantra faster, better, cheaper or speed, quality, value is resonating increasingly with our current clients and potential ones.
"The pandemic has accelerated digital transformation. Despite the softening of global GDP growth because of the withdrawal of the COVID stimulus, significant inflation, increasing interest rates, the war in Ukraine and China’s continued zero-COVID lockdowns, the secular trend to digital marketing continues to provide strong tailwinds."
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