Friday preview: WPP to unveil first-quarter results

WPP's Chief Executive Office Martin Sorrell on Thursday outlined the amount the advertising company spends on digital promotions ahead of its first-quarter results.

Sorrell said digital now accounts for 34% of WPP's media investment. The group spends $73bn globally on buying ad space across media from TV and press to Google and Facebook.

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"The two big [anomalies] are newspapers and magazines. We are still investing 20% [of client ad budgets] but consumers are only spending 7-10% of time. That has to change".

His remarks come a day before the company unveils its quarterly sales. Analysts expect sales growth of 2.5%.

Credit Suisse said it believed the agency was well placed to benefit from the digital transition in fees and margin.

"We like the diversified nature of their revenues and relatively high exposure to faster growing markets," the broker said Wednesday,

Analysts at Investec expect a strong cash return and dividend payment from WPP on the back of decent performance in emerging markets.

However, it also noted the weak first-quarter sales from WPP's rival Publicis.

"Recent poor 1Q Publicis like-for-like sales is unhelpful for WPP sentiment though we believe WPP should outperform given better geographic mix and Jan/Feb trading to date," Investec said last week. The stock was issued a 'buy' rating.

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