Yes, we’re still in that recession. London-listed advertising giant WPP on Tuesday reported worse than expected Q109 earnings, but CEO Sir Martin Sorrell is sticking to his prediction that H209 will be better than H1 and that some recovery will take place in the advertising economy next year. “Reportable” revenues rose 35.6 percent year on year to £2.11 billion—but that’s only a 11.1 percent increase in constant currency terms and in like-for-like terms total revenues were 5.8 down on Q108. In dollar terms the UK contributed $360.1 million (£246 million) in revenue, a 15.9 percent year on year drop in constant currency terms.

SEE ALSO: WPP To Cut ‘Thousands’ Of Staffers; North America And Europe Bear The Brunt

That’s below the number WPP had budgeted for—Sorrell predicted a 2 percent revenue drop for 2009 as a whole—but the company stresses that operating margins are ahead of budget and that the decline was offset by cost-cutting measures, mainly redundancies. The company blames cuts in client spending due to the sub-prime housing crisis and the collapse of of the Lehman Brothers investment bank in September as the main causes for the fall. The rate of decline had slowed in March, perhaps suggesting some stabilisation.

—Digital growth: WPP says “structural pressure on traditional media” continued in the developed nations—digital media grew faster in terms of spending but at a lower rate than in previous quarters. More after the jump.

Release | Webcast | Financials