WPP sets £817m record and dismisses recession worry

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Sorrell's message today is that the US and thus the world are not headed for the dreaded "R" word, and that we are at the beginning of the end of TV dominance as the internet takes over as the main advertising medium.

Announcing 2007 profits up 6.7% at a record £817 million, Sorrell said: "The fallout from the credit crunch is likely to be felt in the real world in 2009 when a slowdown — and it will only be a slowdown and not a recession — in the US seems hard to avoid.

"It seems inevitable that the real world will at some point in time be affected by the private-equity, subprime, insurance monoline and housing market crises. But this year has started well, up 5% like-for-like and better than last year, as we go into a 2008 in which the Beijing Olympics, the US Presidential elections and European football championships will play a major part.

"We expect industry growth to be 4% this year and we expect WPP to better that, but for 2009 we will not have these big quadrennial events to stimulate economic activity."

Insights into the future of advertising and marketing are also skewed by the growth of the internet.

Sorrell said: "Internet advertising will overtake television in Sweden this year and will overtake TV in Britain in 2009."

WPP's total dividend is lifted by 20% to 13.45p.