by Kate Holton

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LONDON (Reuters) – British advertising group WPP forecasts organic growth of 3% to 5% for 2023, above expectations, as clients seek to navigate an increasingly complex media market favored by the easing of restrictions in China.

“We enter 2023 in a strong financial position, with good momentum thanks to new contracts and the many opportunities that come our way,” Chief Executive Mark Read said in a statement.

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The owner of agencies Ogilvy, Gray and GroupM reported a 6.9% increase in like-for-like revenue for 2022, compared to forecasts of between 6.5% and 7.0%.

“There was some concern that customers would stop spending in the fourth quarter, but in fact we delivered 6.4% growth, we even accelerated a bit,” Mark Read told Reuters.

“The outlook is pretty good, customers are telling us they want to keep investing in marketing. In a much more complex world…they’re looking to spend.”

Citi analysts expected more cautious growth and stable margins.

The title WPP took 5.5% at 8:46 GMT on the London Stock Exchange.

The world’s largest advertising holding company has seen its share price soar more than 30% in the past six months.

In addition, its French competitor and world number three Publicis said in early February that it anticipated organic growth of 3% to 5% in 2023, a forecast deemed “impressive” by analysts.

Mark Read also expects business in China to start showing growth in the second and third quarters, thanks to booming demand in areas such as outbound travel and electric vehicles.

The business has benefited from the explosion of marketing opportunities for customers, including TikTok, and the arrival of ads on Netflix and retail platforms, the chief executive added.

It won $5.9 billion in new contracts, including from Audible, Danone, SC Johnson and Verizon.

(Report Kate Holton; Kate Entringer, edited by Blandine Hénault)

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