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Sorrell: recovery is some time away |
The media industry both at home and abroad is in the grip of a recession that will last into the second half of next year before any noticeable upturn. That's the view of WPP chief executive Sir Martin Sorrell and one being voiced increasingly in private by senior figures in TV and agencies. Speaking at a conference in Spain on Tuesday, Sorrell said he believed that a recovery was some time away. "Conditions in the advertising industry are tough and the outlook is pretty gloomy. There appears to be a disconnect between what politicians say and what we are seeing in the real world." His comments coincided with an announcement by Aegis Group of a fall in profits this week and the loss of 180 jobs.
Aegis - which is in the frame as a possible takeover target for WPP should its bid for Tempus be trumped by Havas - said half-year pre-tax profits fell by 22% to £27.2m. Aegis chief executive Doug Flynn said: "The third quarter has been a bit more of the same."
The job losses, most of which will be in the US, are designed to save £8.7m next year.
Meanwhile, SMG chief executive Andrew Flanagan underlined the gloom at ITV this week revealing interim pre-tax profits of £20m down from £30m last year with its TV business accounting for 60% of the shortfall.
SMG has frozen management salaries and recruitment and job losses are possible as part of an on-going business review.
Flanagan said: "This is the toughest advertising market of recent times and visibility is poor enough to make predictions unwise at present."
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