WPP rebounds with third-quarter growth as shares increase
By Oluwaseyi Lawal
Advertising giant, WPP, has experienced a return to growth in the third quarter, achieving a 0.5% increase in organic revenue, which surpassed market expectations of a 0.2% decline.
The better-than-anticipated performance, bolstered by securing new business with Amazon, Unilever, and Henkel, pushed WPP’s shares up by as much as 5%, reaching a four-month high. This turnaround followed a 1% drop in organic revenue during the first half of the year.
CEO Mark Read noted that demand from the company’s top 10 clients had risen by 7% in the quarter, with significant gains across various client sectors, including technology, which had previously posed challenges.
Read also attributed the strong quarter to new business wins and an improved competitive stance, benefiting WPP’s subsidiaries, such as media buyer GroupM and creative agencies Ogilvy and VML.
He said, “”We won Amazon’s media account outside the Americas with a pitch built around WPP Open and led by a team drawn from across GroupM and WPP, leveraging our unmatched global footprint. It’s the world’s largest advertiser, so it’s a very important win for us.”
Regionally, the expansion in North America, continental Europe, and India was somewhat balanced out by challenging market conditions in China. He noted that consumer confidence in China was low.
Speaking on the Chinese market, he said, “”In the short term, trading remains difficult, and that particularly impacts WPP, where we work with a number of luxury, automotive and fast-moving consumer goods companies, three sectors that are under some macro and competitive pressures.”
He further stated that the outlook for the U.S consumer was mixed, with pressure persisting at the lower end.
“Companies that have pushed too hard on price have found the market a little bit more difficult.”
Even with the better-than-anticipated quarter, WPP maintained its full-year forecast for organic revenue, expecting it to range from a 1% decline to staying flat.
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