WPP PROFIT RISES 14%
WPP recorded a 14 percent rise in first-half operating profit to $853M on a six percent jump in revenues to $8.9B as the U.S. economic slowdown in ad/PR spending was offset by “good growth” in the U.K. and developing world.
CEO Martin Sorrell said Aug. 24 he believes it is too early to “predict the impact of the recent correction in the world equity markets on consumer and corporate behavior,” but notes there have been no cutbacks yet.
He sees a disconnection between the “macro picture as defined by the stock markets and the micro picture as defined by individual company results.” He does warn that “markets look to the future, often a year or so in advance, and are rarely wrong.”
Sorrell said “boardroom fear” has CEO’s cutting capital spending in favor of boosting marketing outlays.
On the deal front, WPP sees a “very significant pipeline of reasonably priced small and medium sized potential acquisitions.”
Sorrell has established a $650M acquisition war chest for the year. That’s up from a $165M annual cap.
WPP looks forward to the 2012 London Olympics and U.S. presidential election, a race that could result in $4B spending).
CALIFORNIA RAIL SEEKS PR AGAIN
California’s high-speed rail project is reviewing its multimillion-dollar PR account with a new RFP after Ogilvy PR Worldwide resigned the account in June.
The $45B plan to build high-speed train lines between Los Angeles and San Francisco has faced public criticism and various setbacks, and Ogilvy quit the account after less than two years amid reports that both client and agency were not on the same page.
The California High Speed Rail Authority issued the new RFP on Aug. 23 with a deadline set for Sept. 7.
The RFP notes that Ogilvy terminated its work in June and is currently serving in a transition role. It had billed more than $2M through February 2011.
Ogilvy edged Porter Novelli and Mercury Public Affairs to win the account in 2009.
The Authority said there is a maximum of $1.1M available for the PR pact in the current fiscal year with future years estimated at $1.7M through 2014.
“Simply put, the contractor will be responsible for assisting in the success of the implementation of high-speed rail in California by explaining key decision points of the project to a broad audience,” reads the RFP. That includes a long-term communications strategy and helping to execute it.