WPP shrugs off Brexit vote after upping growth forecasts this year and next
Advertising giant WPP’s Group M media arm has shrugged off the Brexit vote after raising growth forecasts for both 2016 and 2017 on the back of strong growth in digital advertising.
Prominent remain campaigner Sir Martin Sorrell had warned of the adverse impact of a vote to leave in June but has now described the short-term impact of the decision as ‘negligible’.
As a result Group M has raised its growth predictions 6.3 to 7.2% this year and upped its forecast from 5.8 to 7.2% next year although it warns that longer term repercussions are ‘unknown’.
Adam Smith, futures director at Group M, commented: “While the effect of the future European Union exit on the UK is unknown, the short-term impact was negligible. To our surprise, we are revising UK advertising growth up.”
While these headline figures appear strong they are entirely built on a strong showing by digital ads, with traditional media spending slipping further into negative territory, falling from -1.1 to 2.6% this year and 0.5 to -1.4% next year.
Google and Facebook account for three quarters of all UK digital ad spending.
The upgrade in near-term sentiment will provide a timely boost to the industry just as seasonal Christmas campaigns get underway with John Lewis and its trampolining Boxer, Sainsbury’s and Waitrose all weighing in with big promotional efforts.