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WPP

WPP Boasts 36% Profit Boost

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Sir Martin Sorrell is surely smiling somewhere today as his holding company WPP posted a 36 percent lift in pre-tax profits to approximately $380 million for the first half of 2010, thanks in large part to strong ad recovery in the U.S. and return to growth in the U.K. according to Campaign.

The parent company of Ogilvy, Grey and JWT among others issued a statement, saying, “The results reflect the recovery in the world economy, following the massive fiscal and monetary stimulus in response to the sub-prime, insurance monocline, Lehman and other elements of the crises.”

During the six month period ending June 30, WPP revenue was up in Asia-Pacific, Africa (the World Cup had a little to do with it) and the Middle East among others and the company shed a further 9,500 employees around the world.

More: “British Chancellor Pleads for WPP’s Return to the U.K.

British Chancellor Pleads for WPP’s Return to the U.K.

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It’s been nearly two years since changes to the British “tax regime” forced Sir Martin Sorrell and WPP to pack up and move shop from London to Dublin, but now George Osborne, the recently installed Chancellor of the Exchequer for the UK, is personally reaching out to Sorrell and pleading for the advertising umbrella firm to return home.

According to Brand Republic, WPP’s move to Ireland, which the company had been considering since April 2008, has saved them around $75 million to date and reduced their effective tax rate by nearly 8 percent from 2008-2009.

Still, the report this morning states Osborne and the newly appointed government are looking to sweeten the deal for UK companies to return home, where the corporate tax rate is more than twice that of Ireland’s. Now that he’s done calling the ad industry out for wanting to cash in on the social web, maybe Sir Martin has some more time to contemplate WPP’s potential move. Though with British corporate tax form in its nascent stages, who knows how the hell long that will take.

More: “An Interview with Sir Martin Sorrell

WPP Posts Worldwide Growth

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April was good to WPP according to its chief executive. While speaking at the International Advertising Association conference in Moscow this week, Sir Martin Sorrell said, “We’ve just seen what we call our flash numbers for April, which did show that change from what we saw in March, so we are starting to see for the first time growth in our business on a worldwide basis.”

His statement comes just two weeks after the world’s largest ad holding company (by sales) upped its full-year revenue forecast from flat to 2 percent. According to Campaign, WPP’s “growth” marks the first time the advertising business has seen an increase on a worldwide basis since the economic downturn hit at the end of 2008. Guess WPP wasn’t just taking the piss when it claimed, “2010 should be a more stable year (famous last words!)” in its recent earnings report.

More: “Sir Martin: Businesses Should Promote Sustainability Because That’s What People Like

Sir Martin: Businesses Should Promote Sustainability Because That’s What People Like

BigThink interviewed Sir Martin Sorrell, asking him about WPP’s outlook on sustainability and its evolution. Using his usual indirect directness, Sorrell explained that it’s just good business to do good things. Refreshing answer, especially considering this was an easy opportunity for him to say, “well, it’s just the right thing to do” which would have been false. Businesses do things that are good for business &#151 that’s why they’re not called non-profits. Why are good things good for business?

“We know from all the data we get from the companies like Millwood Brown and Research International and TNS, our research companies, that consumers admire and respect companies that invest in these areas &#151 that respect these areas. And we also know that people coming out of universities or art schools or design schools or thinking about switching from one company to another in our industry or adjoining industry, or even thinking about doing other thing within our own company, they’re held and attracted by commitment to these areas. If you’re in business for the long-term, this is something that you should do because it’s good business.”

He goes on to explain that sustainability is part of the business model now and that operating under that MO helps improve a company’s social status. Well, he forgot to mention that’s only true to the extent of WPP’s PR team’s ability to convince the press they’re “doing good”.

More:If WPP Ran a Strip Club…

WPP Finds Sense of Humor Buried in Earnings Report

bettwewerw.pngPRNewser Editor Joe Ciarallo had the pleasure of rooting around in WPP’s preliminary earnings report for this year. So far, everything still sucks. But when life gives you lemons, make a joke out of them.

“2010 should be a more stable year (famous last words!).”

Oh Mimsy, shall we dine in the helicopter or at that little place tucked beneath the Falls of Niagra? I simply can’t decide.

Speaking of snobbery, check out ModSnob’s debut booze event tonight in the NYC.

More:WPP is going a bit green…

We Hear: Schematic Atlanta’s Down to a Handful

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Since 2006, Schematic has been expanding with the help of WPP. The agency moved from LA to New York, basically took over the Dell account (in Austin) while Enfatico floundered, and generally grew as a recognized player in the industry (though on the smaller side). So it seemed odd when a late last year we got word that the Atlanta office had closed. It hasn’t, but things aren’t looking good, according to sources.

What was once a 30-or-so-person shop has been whittled down to just four (or three, depending on who you ask). We’re told that two weeks ago, three-four of the remaining seven were let go. That included the last “creative”, a CD, and leaves three dev guys and an accounts person. According to a source familiar with the matter, there aren’t any accounts left in the office &#151 employees there are serving other clients.

The matter, if true, speaks to a broader issue facing smaller market agencies with big market roots &#151 in a down economy, brands are likely looking for bigger name agencies in hubs like New York. Why not? Some will respond to that notion and say that in Schematic’s case, a lack of creative foresight is to blame (or something like that, who knows). And maybe they’d be right, but when cars are cheap, buy a BMW &#151 it has higher “perceived value” (and an analog clock in the dash!).

An agency representative did not immediately respond to a request for comment.

More:Schematico’s CEO Responds to ‘Dumping’ Enfatico

WPP: Q3 “Less Worse” Than Q2

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WPP held its earnings call this morning and the best summation Sir Martin Sorrell & Co. could offer was that Q3 was “less worse” than Q2. According to the release, revenue during the 3-month period ending September 30 rose 16.7% year-on-year to approximately $907 million. But this figure doesn’t reflect acquisitions like TNS and currency fluctuations, so if we’re talking reality here, like-for-like revenue growth was actually down 8.7%. Still, WPP can at least take solace in the fact that this is well below Q2′s 10.5% drop.

“There is little doubt that consumer and corporate confidence has recovered somewhat from the panic [of Q4 '08 and Q1 '09],” WPP said in its earnings call. But the company is quick to note that it will be “even Stevens” for its 2010 budgets, saying that if there is a recovery, expect a slow one.

While the least affected regions of revenue growth/decline continue to be Asia Pacific, Latin America, Africa, the Middle East and Central and Eastern Europe, Western Continental Europe took the biggest hit followed by the U.S. and U.K.

On the job front, while Sorrell did warn of cuts this year to the tune of 7,200, Paid Content says that he unfortunately exceeded this number. According to the report, headcount is now 11,232 lower than it was at December 31, 2008, denoting a 10% drop in staff overall.

More: “Never Mind the Earnings, WPP Sees Stock Rise

WPP Ticks off Ford With Grey’s Chrysler Pitch

AdAge may have ruffled some feathers when just prior to the Labor Day holiday, they published a story stating that WPP’s Grey was slated to pitch the new Chrysler work. Yesterday, the publication reported that WPP got a bit of a slap on the wrist when Ford learned of the Grey’s plans to pitch the Chrysler business. And that’s no surprise, really, since WPP’s Team Detroit services Ford.

“That Ford is putting its foot down and barring WPP from pitching a rival automaker’s account isn’t a surprise, especially when you consider its history with the holding company and its comparative position to Chrysler.

“Ford spent $1.9 billion in 2008 on U.S. advertising and ranks as the 11th largest national advertiser, according to Advertising Age’s DataCenter. It also was alone among Detroit automakers in maneauvering through the industry’s stunning downturn in 2008 and 2009 without taking a U.S. taxpayer bailout.”

WPP head Martin Sorrell was not immediately available for comment. However, we have heard that calls were made to Ford immediately following the publication of AdAge’s initial report (now unavailable online). Why WPP felt pitching this client was OK has yet to be revealed.

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More:
Oh Look, Ford Has an Assurance Program Now

Never Mind the Earnings, WPP Sees Stock Rise

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Sir Martin Sorrell must be smiling in light of a MarketWatch report that states in London, WPP’s shares have advanced 3.9% ahead of its earnings call, in turn spurring Deutsche Bank to upgrade the umbrella company’s status from hold to buy.

A broker tells the trade, “Even if revenues remain under pressure, a radically leaner cost base means management can now paint a more positive view on margin prospects for next year.” Guess the leaner and meaner WPP explains Sorrell’s job cut forecast this year.

Update: What goes up must come down we suppose because even though WPP has seen its stock rise, Sorrell’s company has also watched profits plummet by 47% in the first half of ’09 according to the Guardian. July results though have been “less worse” according to WPP so don’t put away those party hats and streamers just yet.

More: “If You Work at WPP, Say Bye Bye to the Next 5 Years

If You Work at WPP, Say Bye Bye to the Next 5 Years

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WPP shareholders voted overwhelmingly in favor of a program that, if successful, will make them and Sir Martin Sorrell (aka June 21), a lot of money. For you, WPP kids, that means more business based advertising rife with acquisitions and less advertising-by-creatives.

The deal will, according to Adweek, put some $96 million in Sorrell’s pocket, if he outperforms 9 other companies in the next 5 years. Oh S.Marty, what about the children?

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