The pattern of revenue growth also varied by communications services sector and company brand. The table below gives details of the proportion of revenue and revenue growth by communications services sector for the first six months of 2010:
|Communications services sector||Constant |
as a %
|Advertising, Media Investment
|Public Relations & Public Affairs||9.4||3.4||3.2||2.0|
|Branding & Identity, Healthcare and
- Constant currency growth excludes the effects of currency movements.
- Like–for–like growth excludes the effects of currency movements and the impact of acquisitions.
By communications services sector, all sectors continue to show very similar like–for–like growth, as they did in the first five months, at around 2.0%, other than advertising and media investment management, which is now gaining considerable momentum, with year to date growth of 3%. In the second quarter, consumer insight and public relations and public affairs improved significantly, with growth of 5% and over 3% respectively. Growth in the Group's branding & identity, healthcare and specialist communications businesses (including direct, digital and interactive) in the second quarter was similar to the first quarter at just under 2%. The Group's advertising businesses achieved a 180 degree turnaround from –4% in the first quarter to +4% in the second quarter, leaving year to date revenues up marginally. The second quarter of 2010 was the first quarterly growth in our “traditional” advertising revenues since the third quarter of 2008. Media investment management grew strongly in the second quarter, with revenues up over 10% and year to date revenues up over 7%.
In the first half, direct and digitally–related activities accounted for 28%, or $1.913 billion (an annual run rate of $4 billion) of the Group's total revenues, which are running at the rate of well over $14 billion per annum. To give an indication of the Group's industry leading direct, digital and interactive position, a leading Independent Research Firm recently rated three of the Group's interactive agencies (OgilvyInteractive, VML and Wunderman) amongst seven ”digital leaders”. No other competitor has more than one. The Group's global digital agencies, Wunderman and OgilvyOne, rank as the two largest digital and interactive agencies in the world, with annual revenues of over $850 million and almost $800 million respectively.
In the first half of 2010, almost 61% of the Group's revenues came from outside advertising and media investment management, a similar percentage to last year against the Group's strategic objective of two–thirds, again within three to four years.
Quantitative disciplines (digital and consumer insight), now account for 50% of Group revenues, meeting the Group's strategic objective of one–half.
Advertising and Media Investment Management
On a constant currency basis, advertising and media investment management revenues grew by 3.0%, with like-for-like revenues up 3.0% as well. Reported operating margins increased by almost 2.0 margin points to 11.8%, as the benefit of cost actions taken in 2009, took hold.
These businesses generated estimated net new business billings of £1.799 billion ($2.879 billion).
On a constant currency basis, consumer insight revenues grew by 2.7%, with like-for-like revenues up 2.4%. Reported operating margins improved by 1.1 margin points to 7.2% as the benefits of 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.
Public Relations & Public Affairs
In constant currencies, the Group’s public relations and public affairs revenues grew by 3.2%, with like-for-like revenues up 2.0%. Reported operating margins improved 3.2 margin points to 14.8% as costs were brought into line, rising at a much slower rate than revenues.
Branding and Identity, Healthcare and Specialist Communications
The Group’s branding and identity, healthcare and specialist communications (including direct, digital and interactive) constant currency revenues grew by 2.1%, with like-for-like revenues up 1.8%. This service sector showed a strong recovery in reported operating margins, particularly in the direct, digital and interactive and branding and identity businesses, up 3.9 margin points to 9.4%.