WPP cuts outlook again as tech clients slash marketing spend
- The company now expects like-for-like growth of 0.5-1.0 percent for 2023
- In August, the group expected like-for-like sales of 1.5 to 3 percent
WPP cut its outlook for the second time in as many quarters as technology clients continued to cut back on marketing spending.
The company, which includes Ogilvy, said it now expects 2023 like-for-like growth of just 0.5 to 1 percent this year, after revenue minus pass-through costs fell 0.6 percent last quarter. decreased.
The market had expected WPP to achieve growth of 1 percent in 2023.
WPP’s like-for-like revenue minus pass-on costs fell by 0.6 percent in the quarter, while the market had expected growth of 1.0 percent
Mark Read, CEO of WPP, said: ‘Our top performance in the third quarter was below our expectations and continued to be influenced by the cautious spending trends we saw in the second quarter, particularly among technology customers, the impact of which was greater at GroupM. during the summer than in the first half.’
Read noted that Meta, which published its results this week, had cut marketing spend by 24 percent.
He told Reuters news agency: ‘Technology companies… look very carefully at their marketing spend.
“But I think that will correct itself in the long run.”
The company previously lowered its revenue expectations after U.S. technology customers cut back on advertising and growth in China was slower than expected.
In an August trading update, the group told shareholders it expects like-for-like sales of 1.5 to 3 percent in 2023, down from its previous expectation of 3 to 5 percent growth.
It also reported that comparable sales rose 3.5 percent to £7.2 billion in the first half, but growth slowed to 2.3 percent in the second quarter.
WPP shares fell 3.24 percent to 668.60p in morning trading on Thursday.
DIY INVESTMENT PLATFORMS
A. J. Bell
A. J. Bell
Easy investing and ready-made portfolios
Hargreaves Lansdown
Hargreaves Lansdown
Free fund trading and investment ideas
Interactive investor
Interactive investor
Invest with a fixed amount from € 4.99 per month
EToro
EToro
Social investing with CopyTrader feature
Bestinvest
Bestinvest
Free financial coaching
Affiliate links: If you purchase a product, This is Money may earn a commission. These deals have been chosen by our editors because we believe they are worth highlighting. This does not affect our editorial independence.
Compare the best investment account for you