Thursday’s Q3 data shows that WPP’s revenue dropped by 1.8%. WPP shares are down by 2.12% and are trading at 676p at the time of writing.
In Q3, revenue, excluding pass-through costs, decreased by 0.6%. Growth in the UK, Western Continental Europe, and the Rest of the World was offset by declines in North America, driven by ongoing challenges with technology clients and in the Chinese market.
$1.4 billion in new business was secured during the third quarter, with notable contributions from Estée Lauder, Hyatt, Lenovo, Nestlé, Unilever, and Verizon. The total net new business won year-to-date amounts to $3.4 billion.
Full-year net revenue growth for LFL is now anticipated to range between 0.5% and 1.0%, marking the second downward adjustment in expectations.
In the third quarter, Global Integrated Agencies saw a marginal revenue increase of 0.1%, contributing to a year-to-date growth of 1.5%, excluding pass-through costs. Integrated creative agencies, however, experienced a decline of 1.1% in Q3, with a year-to-date decrease of 0.9%.
GroupM, on the other hand, exhibited growth of 1.6% in Q3, resulting in a year-to-date expansion of 4.6%, driven by low-single-digit growth in the US and UK.
“Communications and advertising giant WPP’s engines have stalled again. Usually, high-spending technology clients in North America have applied the brakes amid an uncertain economic backdrop. China’s also dragging performance down as the macro environment doesn’t lend itself to loose corporate spending. This has culminated in another reduction in full-year expectations. While seeing growth go in reverse isn’t ideal, it’s not wholly unexpected given that advertising activity is a clear-cut barometer of the economy.” said Sophie Lund-Yates from Hargreaves Lansdown.
“WPP is doing what it can to combat these challenges, including consolidating and streamlining its offering. That could mean the business that emerges from all this could be stronger than what it started with, but there are considerable speed bumps to traverse first. As the digital world transforms at pace, this giant will have to move as nimbly as it can if it wants to thrive,”, she added.