Ad group WPP has today forecast better-than-expected organic growth of 3% to 5% for 2023, helped by a client need to navigate an increasingly complex media market and an easing of restrictions in China.
The owner of the Ogilvy, Grey and GroupM agencies reported a 6.9% rise in like-for-like revenue less pass-through costs for 2022.
This compared with a forecast range of between 6.5% and 7%.
"There had been some fears that clients would stop spending in Q4 but actually we delivered 6.4% growth, we actually accelerated a bit," chief executive Mark Read told Reuters.
"The outlook is pretty good, clients tell us they want to continue investing in marketing. In a much more complex world, and in a world where clients try to support price increases and in some way re-evaluated the value of marketing during Covid, they're looking to spend," he said.
WPP, the world's largest advertising holding company, has seen its shares rise more than 30% in the last six months as investors accepted that marketing groups did not need to suffer despite a slowdown in the global economy.
The outlook is more positive than many analysts had expected before the results, with Citi forecasting a more conservative prediction of flat growth and flat margins.
French rival Publicis was similarly upbeat earlier this month, saying that client spending on digital marketing had helped it to beat expectations for 2022.
Read said he expected the Chinese business to start showing growth in the second and third quarters, after it enjoyed a solid performance in the first quarter of 2022, helped by booming demand in areas like outbound travel and electric vehicles.
Generally Read said the company had benefited from the explosion of marketing opportunities for clients, including TikTok, the arrival of adverts on Netflix and retail platforms.
It won $5.9 billion of net new business, including from the likes of Audible, Danone, SC Johnson and Verizon.
Citi analysts said the outlook was materially better than expected.
