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Time for a creative bounce

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07.09.2021

“Bounce back better”, if you will excuse the bastardisation of an already annoying phrase, summarises the sentiment coming from the listed holding company first-half results presentations.

Have the listed groups finally found their get out of jail card as they raise their growth forecasts?

Ian Whittaker, the ex-Liberum analyst writing in this very organ, rightly noted that while the bounce looked fine, comparative growth rates against the likes of S4Capital’s MediaMonks and some of the private groups suggest a continued erosion of listed group market share leading to relatively dull share valuations.

The real story is, of course, more nuanced.

Both WPP and Publicis showed strong growth in major business areas – Group M, digital, Xaxis, ecommerce media, Epsilon, PMX digital – all growing at comparable rates to their adtech cousins – 30%, 40% 50% and beyond.

With global reach and extensive workforces, the groups have leveraged their reach to effectively scale in these disciplines. They are also making great margins.

All good? Well, deploying my rudimentary maths tells me that if you have grown 10% overall and half your business is growing at 30%, 40%, 50%, then........

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