WPP Plc. Partners With Microsoft - Analyst Blog
May 29 2012 - 1:16PM
Zacks
Ireland-based advertising agency WPP Plc.
(WPPGY) recently penned a partnership agreement with
Microsoft (MSFT) Advertising. The contract will be
given effect through the company’s global advertising entity, 24/7
Media. This was done with the clear intent of enlarging the
client-base of both companies through providing enhanced digital
advertising services.
Under the pact, 24/7 Media’s services will be integrated with
Microsoft Advertising’s advanced solutions which would not only
escalate the company’s productivity levels but also cater to
providing a seamlessly flexible, user-friendly and inexpensive
digital marketing solution platform for its partners and
consumers.
WPP Plc.‘s 24/7 Media and Microsoft Advertising will be jointly
engaged in providing improved media planning services to their
clients through 24/7 Connect, a latest tool which was recently
launched by 24/7 Media. Moreover, following the agreement,
Microsoft Advertising Exchange, particularly created for serving
the need of publishers, will now be considered as an intermediary
advertising exchange of 24/7 Media.
Explicit in its enthusiasm regarding the deal, management states
that it has finally been able to meet the demand for providing
cross border digital marketing solution internationally with this
partnership. Post the agreement, the online advertising market is
likely to surpass $98 billion in the fiscal year of 2012.
Earlier, in the first quarter of fiscal 2012, WPP Plc. witnessed
about 7.6% augmentation in revenue from the prior-year quarter.
Geographically, the company fared well posting a noticeable growth
of 11.2% in Asia Pacific, Latin America, Africa, the Middle East
and Central & Eastern European regions.
Additionally, among the company’s four business segments,
Advertising & Media Investment segment witnessed strongest
performance in the quarter through generating total revenue of
£973.0 million (US$1,528.4 million), which increased 8.4% year over
year.
We believe that the current deal will be highly beneficial for
the company, primarily because WPP plc. enjoys a reputation of
providing the best digital advertising technology solutions
globally. It should, however, be aware of the stiff competition
from its rivals such as Local.com Corporation
(LOCM), AirMedia Group Inc. (AMCN) and
Clear Channel Outdoor Holdings Inc.
(CCO).
The current Zacks Consensus EPS Estimates for WPP plc. are $5.66
and $6.32 for the fiscal years of 2012 and 2013, respectively. The
company currently carries a Zacks #3 Rank which denotes a
short-term (1-3 months) Hold rating. We currently maintain a
Neutral recommendation on the stock.
AIRMEDIA GP-ADR (AMCN): Free Stock Analysis Report
CLEAR CHANL OUT (CCO): Free Stock Analysis Report
LOCAL.COM CORP (LOCM): Free Stock Analysis Report
MICROSOFT CORP (MSFT): Free Stock Analysis Report
WPP PLC (WPPGY): Free Stock Analysis Report
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