Third quarter performance impacted by the continuation of second quarter trends, says the company.
WPP cut its outlook for the second quarter and is expecting like-for-like growth this year to be 0.5-1.0%, as big tech clients continued to rein in marketing spend.
Like-for-like revenue less pass-through costs in the third quarter declined by 0.6%, missing consensus of 1.0% growth. Its global integrated agencies grew revenue less pass-through costs +0.1% in Q3 (YTD +1.5%) with integrated creative agencies declining -1.1% (YTD -0.9%).
GroupM grew +1.6% in Q3 (YTD +4.6%) with low-single digit growth in the US and UK.
"Our top-line performance in Q3 was below our expectations and continued to be impacted by the cautious spending trends we saw in Q2, particularly across technology clients with more impact from this felt in GroupM over the summer than the first half," CEO Mark Read says.
The company says that the launch of VML, the world’s largest creative agency with world-class creativity and deep expertise in commerce, data and technology will strengthen them. Further integration of GroupM with common products and single technology platform, streamlining of operations and back-office functions supporting client-facing agencies will further simplify the business. “Together these moves are expected to drive stronger revenue growth and net annualised cost savings of at least £100m in FY25 with a part-year benefit in FY24,” says the company.
“In a world being rapidly reshaped, we need to continue to evolve our offer to clients and simplify our business. I am excited by the creation of the world’s largest creative agency, VML, and the continued evolution of GroupM. Both these developments will strengthen our offer to clients, simplify the integration of our services and maximise the returns on our ongoing investments in AI and technology,” adds Read.
“We continue to win both creative and media assignments from leading global companies including significant wins in the third quarter with Estée Lauder (media), Hyatt (creative), Lenovo (creative), Nestlé (media) and Verizon (creative). Our net new business performance of $1.4bn in the quarter showed sequential improvement after a tougher first half,” he adds.