WPP Plc (WPP) Chief Executive Officer Martin Sorrell said organic revenue growth at the world’s largest advertising company in 2014 will beat this year’s gain of more than 3 percent in a “tough, but manageable” market.
The U.K. is showing a strong advance even as fast-growing markets are slowing, Sorrell said at an investor conference in Barcelona. Organic revenue, which strips out effects including currency fluctuations and acquisitions, is the key figure used by the ad industry to track growth.
WPP is spending as much as 400 million pounds ($646 million) this year acquiring digital-ad assets and operations in countries such as Turkey, Brazil, Vietnam and India to counter slower growth in much of Europe. The London-based company faces losing its top spot in the industry as rivals Publicis Groupe SA (PUB) and Omnicom Group Inc. (OMC) forge ahead with a planned merger.
Sorrell forecast a “considerable move of executives to our company” because of the merger. “There’s a lot of movement in the industry and this sort of movement stimulates it further,” he said in an interview earlier in the day.
There has been speculation that WPP won’t be content to play second fiddle and will buy a large competitor such as Interpublic Group of Cos. or French peer Havas SA.
Sorrell today called IPG and Havas “significantly overvalued” and reiterated he wasn’t interested in buying either.
When asked about the logic behind the Publicis-Omnicom merger, Sorrell said it may offer tax and financial advantages.
“Maybe the benefits are just getting out of France, getting the fiscal benefits of being in Amsterdam,” where the combined company will be based, he said. The deal “certainly has disturbed the client base and certainly has disturbed staff.”
WPP may benefit from the merger as some accounts are expected to shift, according to a note from Jefferies last month.
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