Margins also improved across all sectors
In constant currencies, Advertising and Media Investment Management revenues grew by 7.0%, with like-for-like revenues up similarly at 7.1%. All of the Group’s four largest advertising networks finished the year strongly, with growth in our Media Investment Management business over 13% in the year. Advertising showed sequential quarterly like-for-like growth in the last three quarters of 2010, following six quarters of decline. This strong revenue growth in 2010, together with the cost actions taken in 2009, resulted in the combined reported operating margin of this sector improving by approximately 1.5 margin points to 15.3%.
In 2010, Ogilvy & Mather, JWT, Y&R, Grey and United Network generated estimated net new billings of over £0.8 billion ($1.2 billion) and GroupM, the Group’s Media Investment Management company, which includes Mindshare, MEC, MediaCom and Maxus, generated estimated net new billings of £1.5 billion ($2.4 billion). tenthavenue has been created as a separate ‘engagement network’, focused on out-of-home media, including Group companies Kinetic, Quisma and Spafax.
Consumer Insight revenues grew by 4.4% in constant currencies, with like-for-like revenues up similarly at 3.9%. Reported operating margins improved by 1.1 margin points to 9.7% as benefits resulting from the integration of TNS custom research and Research International and the other operations of both TNS and Kantar, in media, healthcare, retail and their related panel activities, were realised. Reported gross margin margins (headline PBIT as a proportion of gross margin rather than revenue) improved 1.5 margin points to 13.2%.
|Advertising and Media Investment Management||10||7.0|
|Public Relations & Public Affairs||10||4.3|
|Branding & Identity, Healthcare and Specialist Communications||10||5.0|
|Advertising and Media Investment Management||10||15.3|
|Public Relations & Public Affairs||10||15.8|
|Branding & Identity, Healthcare and Specialist Communications||10||12.4|
- See definition in the Financial glossary.
- The calculation of headline PBIT is set out in note 31 of the financial statements.
The Group’s Public Relations & Public Affairs businesses had a strong end to the year, with constant currency revenue growth of 5.6% in quarter four, the highest quarter of the year. Operating margins rose by 0.5 margin points to 15.8%. Particularly strong performances were recorded by Burson-Marsteller and the Group’s specialist public relations businesses.
The Group’s Branding & Identity, Healthcare and Specialist Communications (including direct, digital and interactive) constant currency revenues grew by 5.0% in the year and 7.3% in the final quarter. The Group’s global direct, digital and interactive agencies grew strongly, as did Branding & Identity with revenue up almost 11% in the final quarter. This service sector showed a strong recovery in reported operating margins, up 2.0 margin points to 12.4%.
Marketing services comprised 60% of our revenues in 2010, a similar proportion to 2009. It is no longer accurate to call us an advertising agency, we are really a communications services company.