WPP PLC, the world’s biggest advertising company, will more than double the amount it sets aside this year for acquisitions to expand in faster-growing emerging markets, chief executive officer Martin Sorrell said.
WPP will allocate more than £200 million (US$325 million) this year on acquisitions, compared with a typical annual budget of £100 million in previous years, Sorrell said in an interview with Bloomberg Television at the World Economic Forum in Jakarta yesterday.
The company is seeking to expand in “new media” such as the Internet, and in emerging markets, he said.
Advertising companies are benefiting as companies increase marketing spending following the economic slowdown.
Dublin-based WPP, the owner of ad agencies including Young & Rubicam, Ogilvy & Mather and the Grey Group, this month boosted its full-year sales forecast, helped by growth in Asia, Latin America and Africa. Sorrell said he was “bullish” about growth prospects in the advertising industry this year and next year.
“We have considerable flexibility in terms of acquisitions,” Sorrell said.
WPP is expected to post US$2.5 billion in earnings before interest, tax, depreciation and amortization this year, and is seeking to expand in emerging markets including Brazil, Russia, China and India, he said.
In the first four months, WPP made a number of small and medium-sized acquisitions or increased stakes in companies based in countries including the US, the Netherlands, China and South Korea.
WPP said this month it bought a 70 percent stake in F.biz, the biggest independent digital advertising agency.
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