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WPP: Digital Will Be Two-Thirds Of Our Business In Three Years

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WPP has pledged that new media services will make up two-thirds its revenues in “three or four years” and that it expects 2010 to be a stable year, as it reported an 11 percent drop in profits to £663 million ($1 billion) after a “brutal” 2009 and a particularly low second quarter. The company reported a 16 percent increase in revenues to £8.6 billion ($13 billion) for the year to December 31, in today’s earnings report.

New media sales accounted for 27 percent of the advertising and marketing group’s revenues, or $3.6 billion. This is already a big step: to compare, one competitor, Havas, last month said that digital accounts for 16 percent of its revenues to account for one-fifth of its revenues by the end of 2010.

WPP appears to be pegging its own digital revenue share to stats that are coming out on how much time people are spending online. Sir Martin Sorrell pointed out that recent figures show that this too is currently hovering around the 27-28 percent mark.

Mark Read, director of strategy and CEO of WPP Digital, touted the company’s specialist digital expertise in the earnings call: “We have to have digital in all our businesses.” The company is continuing to integrate technology platforms into the business, and industry partnerships with companies like Google (NSDQ: GOOG), Yahoo (NSDQ: YHOO), Microsoft (NSDQ: MSFT), Facebook, MySpace (NYSE: NWS) and Omniture (NSDQ: OMTR), now owned by Adobe.

Digital is a blessing and a curse, says Read: “Technology is shaping our industry…however this is confusing for our clients and extremely complicated to manage.”

Search: $520 million was spent by WPP’s clients on search advertising, a three-fold increase on the year before, says Read. Currently WPP is buying inventory on around 100 search engines worldwide.

24/7 Real Media: Read says this WPP division is now number-seven in comScore’s ad network rankings. B3, the division’s proprietary trading network, had a run-rate of $120 million by the end of the year, out of $680 million in digital spend on WPP platforms overall. Read says it will be launching a real-time bidding service on B3 in the next three to six months.

WPP is planning a “Digital Day” on April 23 where it will share more information on its digital strategy.

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