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High-tech firms boost advertising

The world's second-largest marketing services conglomerate, WPP, unveiled a surge in sales during the first quarter of the year.

The world's second-largest marketing services conglomerate, WPP, unveiled a surge in sales during the first quarter of the year. Sir Martin Sorrell, the chief executive, said that internet and telecommunications companies had recovered from the depths of the high-tech meltdown, which brought a profound slump in advertising in the sector between 2000 and 2004.

The revival was being led by internet companies such as Google, Yahoo! and Microsoft, which are competing for customers in the lucrative internet portal market. Microsoft, the world's biggest software company, recently announced plans for a new global marketing push for its Windows operating system. Analysts expect the company to spend more than $100m on the campaign. ìThe telecoms and IT sectors have come back to where they were before the Internet bust,î Sir Martin said. ìLook at what is happening with Google and Yahoo!

He cited the strong results yesterday from Google, which operates the world's most popular internet search engine, as a reflection on the growing weight of online advertising. Web-based advertising, along with direct and interactive marketing, is expected to account for about 15 per cent of WPP's revenues in 2005.

ìThe continually increasing cost in network television, the fragmentation of media, and the development of new technologies are all moving the market toward direct interactive and internet,î he said.

WPP reported a 16 per cent increase in sales to £1.11bn during the three months to March 30, as the company gained income from the Grey Global business it acquired this year from £865m, and won new business from clients such as Samsung and Unilever.

ìWe feel good about the first quarter, it's a continuation of what we saw in the final two quarters of last year,î Sir Martin said. Latin America continued its strong performance, showing stronger growth than the Far East, while in Europe the UK continued to outshine the Continent, although key markets such as France and Germany were improving.

ìThey are less worse than they were,î Sir Martin said. He revealed a positive outlook for new business wins. ìIt's early days, but the market is strong at the moment in media planning and buying,î he said.

2nd September 2008

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