WPP chief executive Sir Martin Sorrell has urged businesses to invest in their brands as his network reported a 10.5% revenue rise in its first-quarter results.
WPP showed reported revenues of £3.076 billion and reported billings up by 8.3% to £11.922 billion for the first quarter of the year.
The network, which operates consultancies including Landor, Fitch, The Partners and AKQA, said its branding and identity groups had performed “strongly” in this period, with like-for-like growth of 5.2%.
Branding is strongest sector
WPP says its branding and identity, healthcare and specialist communications sector has been its strongest performing sector – with all its businesses apart from the healthcare groups growing in the first quarter.
Sorrell has also urged businesses to invest in their brands “to stimulate top-line sales growth”.
He says: “Although consumers and corporates both seem to be increasingly cautious and risk averse, the latter should continue to purchase or invest in brands in both fast and slow growth markets.
“You cannot cost-cut your way to success”
“There is a clear correlation between investment and innovation and long-term financial success.
“Take for example brand investment. If we and you had invested in the top ten brands in our annual BrandZ Top 100 Global Brands Financial Times survey over the last ten years, we would have outperformed the MSCI World Index by well over 400 per cent and the S&P 500 Index by almost 75%.”
Sorrell adds: “There is a clear correlation between investment in brands, top line like-for-like growth and total share owner return, through stock price appreciation. You cannot cost-cut your way to long-term success.”