LONDON—WPP, which owns the world's largest collection of public relations and public affairs business, today reported that revenue from those firms was up 2.5% in 2014 on a like-for-like basis.
The group's preliminary 2014 results revealed a particularly strong 4Q for its PR businesses, which include H+K Strategies, Burson-Marsteller, Ogilvy PR and Cohn & Wolfe, with revenue up 5.1% on a like-for-like basis during the period.
In particular, WPP CEO Sir Martin Sorrell pointed to PR growth across North America, the UK and Asia-Pacific, and singled out the performances of Burson-Marsteller, Cohn & Wolfe, and the "specialist public relations and public affairs businesses".
However, Sorrell noted that H+K Strategies was "more challenged."
"I was pleased that Cohn & Wolfe was called out in WPP's statement," said Cohn & Wolfe CEO Donna Imperato. "I actually thought we'd get our own paragraph! We have had a record year, with 11.5% growth globally, driven by our integrated communications work across all regions and practices."
The group's PR unit also saw a welcome margin improvement, up to 15.8% for 2014, compared to 14.7% for 2013, reflecting an increase of 1.3 margin points in constant currency terms.
For 2014, PR revenue totalled £891.9m, after earlier reporting 2.3% growth in the first half of 2014. However, the PR division's growth lagged two of the group's three other units: advertising and media investment management (+15%) and branding, healthcare and specialist comms (+4%). Only data investment management (+0.6%), performed worse.
Overall, the group reported like-for-like revenue growth of 4.6%, reaching £11.5bn for the year. Annual profits hit a record high of £1.45bn, up 12%.
Sorrell noted that 2014 was another tough year, thanks to continued uncertainty among clients.
In particular, he pointed to a "fragile" Eurozone, a "litany of woes" in the Middle East, and "continuing fears around the BRICS and Next 11" markets, particularly in relation to Brazil, Russia and China. He also noted concerns about US monetary policy, and whether the UK general election would impact the country's "strong" economic recovery.
"[Clients] remain focused on a strategy of adding capacity and brand building in both fast growth geographic markets and functional markets, like digital, and containing or reducing capacity, perhaps with brand building to maintain or increase market share, in the mature, slow growth markets," said Sorrell. "We see little reason, if any, for this pattern of behaviour to change in 2015, with continued caution being the watchword."
Accordingly, Sorrell expects a similar pattern in 2015. "Although consumers and corporates both seem to be increasingly cautious and risk averse, they should continue to purchase or invest in brands in both fast and slow growth markets to stimulate top line sales growth" — Sir Martin Sorrell
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