WPP, the world's largest communications group, reported 2014 revenue rose 4.6% to $17.4 billion and pre-tax profit grew 12% to $2.2 billion, with North America and the U.K. performing particularly well.
Organic growth (excluding acquisitions) was 3.3% in 2014, due to a slower second half, but rose to 3.9% in January 2015. Rival Omnicom's organic growth for 2014 was 5.7%, while Publicis Groupe's reached 2%.
Speaking to analysts in a webcast in London this morning, WPP CEO Martin Sorrell said that he expects 2015 to "improve a little bit" over last year. However, WPP's statement about earnings was cautious about the year ahead, warning that it will be "demanding," partly because there are no major events like the Olympics, the FIFA World Cup or a U.S. presidential election to boost marketing investment.
Mr. Sorrell identified five "grey swans" that could be unsettling for business in 2015, including the U.K. election in May, which he said is unlikely to help conditions in WPP's home market, regardless of the outcome. If a right-wing government is elected, there will be uncertainty about Britain's position in Europe, while a left-wing leader would champion a "business-bashing" agenda.
He cited four other "grey swans" that could knock business confidence in 2015: the "litany of woes" in the Middle East, the "fragile" eurozone, "continuing fears" around the slowdown in emerging markets, and the situation in the Ukraine.
Revenue growth at WPP, whose agencies include Ogilvy & Mather, Grey, Y&R, JWT, Mindshare, Mediacom and Wunderman, was 9.9% in the U.S., 12.9% in the U.K., 7.9% in Greater China, 5.2% in Germany and -0.4% in France. In Argentina, India and South Korea, revenue was up more than 20%.
Mr. Sorrell revealed that Google gets the biggest share of WPP's media investment, accounting for $2.9 billion in 2014. Spending with Facebook rose to $640 million from $439 million, and WPP's relationship with Twitter grew to $150 million in 2014, from $50 million the year before. Fox and News Corp. accounted for $2.5 billion of WPP's media investment, while other traditional media brands like CBS, ABC and Viacom accounted for between $1 billion and $1.5 billion in spend.
Mr. Sorrell said that this year WPP has a "heavy pipeline" of acquisitionsof small and medium-sized businesses, and is focusing again on faster-growth markets and new media.
In an analyst note, Liberum described WPP as the "best positioned" among the agency groups but warned that margins are at risk and that "the competitive environment will be less favorable than in the past."