WPP, whose ad agencies include JWT and Ogilvy & Mather, posted fourth quarter organic revenue growth of 8.5 percent and said the solid performance had continued into January with revenue up over 8 percent.

The strong finish to the year, which had been expected after rivals Omnicom and Publicis posted better than expected results, helped WPP to post a full-year figure of 5.3 percent, with both the fourth quarter and full-year figures ahead of forecasts.

For 2011 it expects the key industry metric of like-for-like growth, which strips out the impact of acquisitions and currency moves, of 5 percent and operating margins to rise 0.5 margin points to 13.7 percent.

Analysts had expected Martin Sorrell’s firm to report Q4 growth of 7.3 percent and full-year growth of 4.9 percent although expectations had risen after US group Omnicom and France’s Publicis reported strong trading.

A solid update by another peer Interpublic and reports from media groups that ad markets were growing strongly has added to the sense in recent weeks that the industry is well into a recovery from one of the toughest downturns in recent history.

WPP’s performance was boosted by the rebound in the US, continued growth in China, its strong presence in the digital market and an overall drive by fast moving consumer goods companies to increase their marketing spend.

For 2011 it expects organic revenue growth of around 5 percent, in line with forecasts.

Overall reported revenue was up 7.4 percent to 9.3 billion pounds ($15.14 billion), compared with an analyst forecast of 9.2 billion pounds. It also said it would target a divided payout ratio of around 40 percent over the medium term from around 30 percent.