What is Preliminary Market Research

WPP is growing strongly, but not with market research

WPP publishes the preliminary results for the 2016 financial year. It was another record year. The market research division is still the weakest in the group. But it can increase profitability.

The turnover of the WPP group rose by 17.6 percent to 14.39 billion Great Britain Pounds (GBP). At constant exchange rates, the increase is 7.2 percent. The organic growth is given as 3 percent. After-tax profit is £ 1.5 billion, up 20.6 percent or 7.2 percent at constant exchange rates. The second half of the year was more successful.

In the Data Investment Management (DIM) sector, i.e. the market research division of the WPP Group, which can now largely be recognized by the prefix Kantar, sales fell by 0.9 percent on a comparable basis (at constant exchange rates and without acquisitions). The other divisions grew in this strict analysis: Advertising and Media Investment Management by 4.7 percent, Public Relations and Public Affaires by 2.5 percent and Brand and Identity, Healthcare and Specialist Communications by 3 percent.

The market research division accounts for 18.5 percent of the entire group and was less successful in the second half of the year. Net sales were up 3.2 percent at constant exchange rates at GBP 1.9 billion.

The mature markets were described as difficult. You are under increasing pressure, according to a press release from the company. Syndicated Research continues to show resilience and is growing by 1 percent on a comparable basis, whereas Custom Research, which accounts for half of current DIM sales, is declining.

The areas Kantar Worldpanel, Kantar Health, Kantar Public, Kantar Retail and IMRB would show significant growth, it is said. The division's margin was 17.6 percent. Strict cost controls and the reconstruction have already contributed to a better margin.

The WPP Group made 56 acquisitions in the past year. In the DIM area, purchases were made in the USA, Denmark, Greece, India and New Zealand. In the past two months of this year, two acquisitions were made in the DIM division. (hed)