WPP today reported a surprise return to revenue growth in the first quarter as clients began to increase their marketing spend after a frugal pandemic year.

The London-listed ad giant posted a 3.1 per cent rise in revenue less pass-through costs — its key metric — to £2.3bn for the first three months of the year.

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This was compared to a 6.5 per cent drop in net sales in the fourth quarter and beat analyst expectations of a 1.5 per cent decline.

The positive figures mirrored similar upbeat updates from rivals Publicis and Omnicom, suggesting the first signs of recovery in the global advertising market.

WPP chief executive Mark Read hailed a “strong start to the year with a return to growth in all business lines and most major markets”.

“I think the key face is that clients can see a strong recovery in consumer demand as the year progresses,” he told City A.M. “Also we’re seeing a number of companies really invest and reinvent their business for the future.”

Shares in WPP were up more than 3.5 per cent in morning trading.

The ad behemoth’s strongest trading came in China, where revenue surged more than 18 per cent. The UK posted strong growth of 3.9 per cent, while the US ticked up 0.7 per cent.

Under boss Read WPP has pursued a strategy of combining its digital and data capabilities with its creative agencies in an effort to update the group for the modern advertising market.

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The company posted 2.8 per cent revenue growth at its global integrated agencies, with VMLY&R the best performer. Its media buying arm Group M also performed strongly, with 5.8 per cent growth.

WPP reported increased business in sectors including ecommerce, technology and brand identity.

Public relations divisions were up two per cent, driven by strong trading at specialist firms Finsbury Glover Hering and H+K.

WPP said it had won $1.3bn of net new business over the quarter, securing work from clients including Absolut, JP Morgan and Salesforce.

“The roll-out of vaccines is improving visibility in many markets, although there is inevitably uncertainty over the pace of recovery,” Read said.

The ad boss added that WPP was making good progress in its transformation programme and reiterated its forecasts of mid single-digit growth for the full year.

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“Relief oozes from these results as the bounce back has clearly begun in the ad world with mothballed projects dusted down and the squeeze on budgets eased,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.

Streeter added that the results were a “milestone” in WPP’s turnaround but warned “caution is still the name of the game”.