SIR MARTIN SORRELL, chief executive of WPP, gave warning yesterday that 2006 could be another testing year for media companies dependent on advertising in the UK.

His prediction will cast a pall over the British advertising industry — since Easter spending on advertising has fallen, reflecting weakness in the wider economy. Some media company executives say that the downturn is the most severe since the recession of the early 1990s.

Speaking to The Times, Sir Martin also gave warning about the outlook for advertising in the United States.

In 2002 Sir Martin famously described the advertising industry as being in a “bath-shaped recession”, meaning that expenditure on advertising would slide steeply, stagnate over a prolonged period, then recover. The WPP chief executive said in autumn 2003 that the advertising industry was “starting to climb out of the bath” and by February last year he said the process was complete.

However, Sir Martin said yesterday that there were “no signs of baths or showers yet” but the American market could be at risk of a shower.

He said: “The biggest risks of a shower could be the US, with the consumer coming under pressure and inflation rising or continued tough conditions in Western Europe.”

Sir Martin added that western continental Europe, particularly France and Germany, should improve but “the UK may remain difficult”.

The founder of WPP said that, on a global level, 2006 should be better than this year and would be buoyed by big events, such as the Winter Olympics in Turin, Italy, the football World Cup in Germany and mid-term congressional spending in the United States.

Globally, digital media would lead the way while the market research industry would continue to consolidate.

He added that emerging advertising markets in Asia, Latin America, the Middle East and Eastern Europe would probably prove strong next year and was particularly bullish about the prospects for the Chinese economy.

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