WPP, reporting improving revenue and major pitch wins in the third quarter, is still cautious about the recovery from the economic fallout of the pandemic.
Like-for-like revenue at the world’s biggest advertising group fell 7.6% in the three months to September, a marked improvement on the 15.1% fall in the June quarter.
Headline revenue was £2.969 billion (AUD5.46 billion), down 9.8%.
“We feel fairly confident the worst is behind us,” CEO Mark Read said after releasing quarterly results.
London-based WPP, like many of the holding companies, sees the June quarter as the bottom of the COVID-19 trough.
However, the company is not yet ready to call a recovery. Ahead is the holiday season, a key period for retailers, and lockdowns could impact trading.
“Given the tightening of COVID restrictions around the world and uncertainty in the global economic outlook, we remain cautious about the pace of recovery,” says Read.
WPP reported $US1.6 billion (AUD2.27 billion) in business wins in the third quarter, including the global Uber account, Alibaba, Dell, HSBC, Intel and the retention and expansion of the Walgreens Boots Alliance.
The company is seeing recovery in integrated agencies, particularly at GroupM. VMLY&R continues to be a strongest performer, slightly down year-on-year.
Public Relations, down just 2.9% in the quarter, is the strongest performing sector but specialist agencies, down 13.9%, remain challenged.
Brand Consulting and other niche agencies are under pressure from client budget cuts.
“WPP continues to demonstrate its resilience in a challenging market,” says Read.
“We have maintained our new business momentum as clients seek out our creativity and our skills in media, technology, data and ecommerce.
“Our people have done a superb job in serving our clients, largely working from home, but the events of 2020 have of course created new pressures for everyone.
“We have increased our investment in employee support services, with a particular focus on mental health and wellbeing, and this will be an ongoing priority for our leadership.”
WPP expects its full year results to be within the range of current market expectations, assuming no widespread lockdowns in major markets, with like-for-like revenue down between 8.5% and 10.7%.
This is an improved outlook. In August the company forecasting a 10.0% to 11.5% drop in ike-for-like revenue.
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