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Ad giant WPP sees revenue soar

WPP has seen its revenues climb 12.2% during the third quarter of this year, with the advertising giant cautiously optimistic heading out of the global economic crisis.

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Q3 trading update reveals reported revenues up 12.2% to £2.253bn.

Total year-on-year sales from the UK were up 7.4% to £262.3 million in the three months ending September 30, compared with 0.2% growth in the first quarter and a rise of 5.1% in the second quarter.

The figures from WPP, led by chief executive Sir Martin Sorrell, are viewed as an important bellwether of the economy because companies' spending on advertising and marketing can reflect their confidence and strength.

Traditional advertising has also recovered sharply, with an increasing trend in the first nine months.

WPP, which owns names such as Ogilvy & Mather and J Walter Thompson, added: "This continuing overall improvement is most welcome, particularly after the brutality of a post-Lehman 2009.

Calendar 2010 looks set fair with a good fourth quarter in prospect, particularly as most of our clients budget on a calendar year basis."

Excluding impact of acquisitions and currency fluctuations, like-for-like revenue growth was up 7.5%, company hails this as “significant and sequential improvement on the first two quarters”.

Across its regions, WPP says the US - “the first region affected by the global economic crisis, has been the first to recover” with Q3 revenues on a constant currency basis up 9.9%.

Western Continental Europe, although continuing to be the slowest growth region, showed a marked improvement, with revenues up 6.1% compared to 2.5% in quarter two and -1.1% in quarter one.

Asia Pacific, Latin America, Africa and the Middle East and Central and Eastern Europe “also showed considerable improvement”, with revenues up 8.3%.

Middle East “only sub-region to show some softness”, with revenues down.

The WPP said both Mainland China and India continue to lead the Asia region, with revenues up more than 23% and almost 15% respectively.

WPP said it expected like-for-like revenues in 2011 to be similar to this year, compared with a previous forecast for a 2% rise.

The revision follows the stronger-than-expected 2010 and amid ongoing fears over the strength of American consumer demand and impact of deficit cuts by governments.

In August, WPP said its previous forecast for a LUV-shaped recovery - referring to an L-shaped recovery in western Europe, a U shape in North America and V in the emerging markets - was now more a "LuVVy" rebound as the US performs better than expected.

WPP has also announced a five million US dollar (£3.1 million) strategic investment in Buddy Media, which helps brands build a presence on Facebook.

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