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By Kate Holton
LONDON, March 9 (Reuters) - WPP strengthened itsposition at the top of the advertising industry last year as itsgeographical reach and strong digital sales gave it the edgeover its two closest rivals, who were distracted by a failedmerger.
The British company, run by the high-profile businessmanMartin Sorrell, said on Monday that 2015 started strongly withan increase in January trading, helped by standout performancesin the United States and China.
WPP's reassuring outlook and the January performance markeda slight improvement in sentiment from an October update, whenSorrell said trading in the fourth quarter was set to be tough.
"After coming across less upbeat in the last two quarters,shareholders should be pleased with the performance over thefull year," said Lewis Sturdy, a trader at London Capital Group.
WPP, which counts the likes of Ford, Unilever and Microsoftamong its clients, reported a 3.3 percent rise in 2014like-for-like net sales and that measure rose by 3.9 percent inJanuary.
The measurement more commonly used by its rivals,like-for-like revenue, was up 8.2 percent in 2014, comfortablyahead of the 5.7 percent growth recorded by Omnicom, theNo. 1 U.S. advertising company, and a 2 percent rise at France'sPublicis.
Omnicom and Publicis tried to merge in 2014 to leapfrog WPPas the world's biggest advertising group, prompting many clientsto reconsider their contracts. While Omnicom stabilisedrelatively quickly, Publicis has taken longer to recover.
DIGITAL CHALLENGE
WPP, owner of the JWT and Ogilvy & Mather agencies, said ithad topped the industry's new business table for the third yearrunning in 2014 and expected solid growth in 2015 following anumber of recent big contract wins.
WPP had revenue of $18.96 billion in 2014, outpacing Omnicomwith $15.3 billion and Publicis on $7.9 billion.
With big brands moving large chunks of advertising spendonline to reach the millions of people on social networks andtraditional sites, WPP has historically been well placed as ithad the greatest exposure to digital advertising.
That may be challenged, however, after Publicis moved to buydigital specialist Sapient.
WPP also noted that trading in its home market could beaffected by the May 7 parliamentary election, which is shapingup to be the most unpredictable in a generation and will likelyresult in another coalition government.
On a geographical basis, North American net sales rose 3percent on a like-for-like basis in 2014, with Britain up 4.8percent. Western continental Europe increased 1.1 percent andits division of Asia Pacific, Latin America, Africa & MiddleEast and Central & Eastern Europe climbed 4.6 percent.
Analysts welcomed the results, and WPP shares opened 1.2percent higher to add to the 14 percent rise since the start ofthe year, although they noted that the full-year results didmark a slowdown in the fourth quarter.
WPP, which has more than 179,000 staff in 111 countries,said the strongest growth had come in the travel, airlines andentertainment sectors while packaged goods firms remained underpressure as shoppers looked for cheaper deals for their brands.
"The growth has been across the board," Sorrell said. "I waspleased with the recovery in western continental Europe. But thetwo areas that make the big difference are the U.S. and China."
The company will aim to buy back 2-3 percent of itsoutstanding share capital.
"WPP remains a true global barometer, extracting gains fromthe economic pockets which are faring well, whilst also beingmindful of the macro and geopolitical concerns which are yet tobe resolved," said Richard Hunter, head of equities atHargreaves Lansdown Stockbrokers.
($1 = 0.6637 pounds) (Editing by Paul Sandle and David Clarke)