Notes of caution

This year is shaping up to be another tough one for the advertising industry, writes global agency holding company WPP.

In a trading update it says: “There seems little reason for an upside breakout in growth in terms of worldwide GDP, or indeed a downside breakout, despite the possibility of an increase in interest rates in the short term.”

WPP is more confident about advertising growth in developing markets, including SA, than in more mature markets. It also sounds a note of caution over the practice of discounting. “There have been several examples of major groups being prepared to offer clients up-front discounts and payments as an inducement to renew contracts. These practices will result in poor financial performance and further consolidation.”