WPP IS the world's biggest marketing and advertising group, owning agencies such as J Walter Thompson and Young & Rubicam and the public relations firm, Hill and Knowlton.
Sir Martin Sorrell, the chief executive of WPP, has been consistently bleak in his prognosis for the advertising industry as the world economy has struggled for the past three years.
The WPP share price has reflected Sorrell's candour, falling from £13.24 in early 2000 to 457p now. But a meaningful recovery is in sight in 2004, according to Sorrell - and most big agencies would concur.
Next year is also expected to be better for advertising spend than a largely flat 2002 (and, by the way, such spending is normally a lead indicator of economic recovery). Agency share prices tend to rise in advance of growth in billings.
So we expect shares in WPP and its peers to be on an upward trend long before economic growth data starts to show a general recovery.
WPP is heavily exposed to the advertising cycle. If Sorrell and the rest of the advertising industry are right that the end of their recession is in sight, then share prices will be responding long before 2004 comes along. The shares have edged off a three and a half year low of 390p. Buy.
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