Financial Performance of Advertising and Media Companies

Echoing the sentiment of every other holding company that the worst of the recession's impact on the ad business has past, WPP, the world's largest ad conglomerate, today reported a pre-tax profit drop of 16.1% to $1.2 billion down from $1.5 billion in 2008.

In a year it described as "brutal," the holding company also announced revenue for 2009 was down 8.1% to nearly $13.1 billion. Geographically, none of its regions showed any growth. North America dropped 8.1% from the year-prior period, the U.K. fell 6%, Western Continental Europe decreased 10.2% and Asia Pacific, Latin America, Africa and the Middle East and Central and Eastern Europe dropped 6.8%.

All of its business practices declined as well. Advertising and media-investment management declined 8.5% while PR and public affairs dropped 7.4%. Its consumer-insight practice fell the sharpest at 9.5%.

Despite the rough year, the group said there were signs that 2010 would be more financially productive, citing its belief that WPP would experience organic growth in the second quarter.

There were "less-worse trends in the second half and final quarter of the year," WPP said in an earnings statement. "We seem to have moved from staring into the abyss post the Lehman Brothers crisis, to a less worse phase in the second half of 2009 and a stabilization phase towards the end of 2009 and the beginning of 2010."

WPP Chief Executive Martin Sorrell also recently said the company has lifted a hiring freeze instituted last year and started replacing some lost headcount. The total number of staffers at WPP at year-end 2009 was 98,759 compared with 112,663 at the end of 2008, a decrease of nearly 14,000 people or 12.3%.

The London-based company -- which is the parent of creative network Ogilvy & Mather, direct agency Wunderman, media shops Mindshare and Mediaedge:cia as well as PR shop Burson-Marsteller -- posted results on par with most of its competitors. Omnicom, reported a 20.7% decline for 2009 in net income last month, and Interpublic Group of Cos. a 13.4% revenue drop for the year. Of the four biggest companies, Publicis Groupe fared the best with a drop in profit of 9.8%.