By Kate Holton
LONDON (Reuters) -The world's largest advertising group WPP (LON:WPP) raised its full-year sales outlook on Wednesday, saying strong client demand had helped it to buck the gloomy mood gripping the global economy.
Tech giant Google (NASDAQ:GOOGL) reported its first quarterly miss of the pandemic on Tuesday, adding to the sense that the invasion of Ukraine, soaring inflation and product shortages had started to throttle the recovery from COVID-19.
Britain's WPP, owner of the Ogilvy, Grey and GroupM agencies, said that while customers were cautious about the growing pressure on consumer budgets they had not cut back their ad spend. It mentioned Coca-Cola (NYSE:KO) as one client that had provided a strong impact.
Inflation can also have a positive impact on advertising budgets as businesses need to produce marketing campaigns to explain and support their price rises.
"We had a good year last year and that momentum has very much continued into the beginning of this year," Chief Executive Mark Read told Reuters.
Advertising holding companies such as WPP, Omnicom Publicis and IPG have been in the vanguard of the corporate pandemic recovery as clients used their data, creative skills and strategic advice to produce and place new ad campaigns.
Both Publicis and Omnicom beat first-quarter forecasts in results published this month, although comparisons will become harder for the sector through the rest of the year.
For WPP, it said its main net sales metric - like-for-like revenue less pass-through costs - jumped by 9.5% in the first quarter, ahead of a forecast of 7.1%. Net sales rose by 12.1% in 2021.
The British group said it now expected full-year net sales growth for 2022 of between 5.5-6.5%, up from its previous forecast of around 5%.
"Demand is strong for our services, particularly in digital media, ecommerce, data and marketing technology," it said, with strong performances reported in the United States and Britain.
WPP shares rose 1% against a flat FTSE 100 index.
Analysts at Citi said the results marked an "emphatic" beat against forecasts, helped by broad-based growth across geographies and divisions and after WPP merged some of its agencies to provide a more integrated service for customers.