UPDATE: WPP Keeps 2010 Revenue Goal; Ad Improvement Continues

By Ruth Bender Of DOW JONES NEWSWIRES PARIS (Dow Jones)--WPP PLC (WPP.LN), the world's largest advertising company by revenue, said Tuesday it still expects to post around 2% organic revenue growth this year as advertising markets continue to improve. In a statement, coinciding with the group's annual general meeting in Dublin, WPP said organic revenue grew 2% in the first five months of the year, on a strong rebound in U.S. advertising spending and growth in Asia. In the U.S., organic revenue growth--a closely watched metric in the ad industry that strips out acquisitions, disposals and currency movements--was up "well over 5%" in the first five months and over 7% in April and May, WPP said. The U.K. has also improved since January, posting organic revenue growth of over 4% in both April and May, the group said. Continental Europe, however, remained flat in the first five months, with revenue in Western European markets still down slightly in the first five months as markets such as France and the Netherlands remain tough. In Asia though, growth is booming, with organic revenue in mainland China up over 7%, and in India almost 12%. WPP said it expects these improvements to continue, helped also by big global events such as the soccer World Cup and the Shanghai expo. The trading update follows a recent series of upbeat comments from advertising executives and market forecasters. Last Thursday, WPP's GroupM raised its forecast for global advertising spending to 3.5% from its previous forecast of 1%. WPP Chief Executive Martin Sorrell also told Dow Jones Newswires last week that the group's 2% organic revenue target was "probably on the conservative side." Still, the group said it remains cautious amid fears in Europe of contagion from Greece, Portugal and Spain and fears of more austerity plans or fiscal stimulus withdrawal. Worries about growth in the U.S. later in the year are another reason to stay cautious, the group said. "It has been a pretty bumpy ride - and it is not over yet. Nor, in one sense, will it ever be over," WPP said, adding that the group will continue to focus on improving profitability now that revenue is back to growth, as well as winning new business. At 1200 GMT, WPP shares were trading down 1.5% at 647 pence, in an overall higher London market. -By Ruth Bender, Dow Jones Newswires; +33 1 40 17 17 54; ruth.bender@dowjones.com (END) Dow Jones Newswires June 29, 2010 08:38 ET (12:38 GMT)