Artificial intelligence helps advertising group WPP win Amazon contract
- British advertisers are cutting back on marketing spend due to budget considerations
WPP won a major contract with tech giant Amazon in the third quarter thanks to its recent adoption of artificial intelligence tools, the advertising group said on Wednesday.
The group told investors that WPP Open – its AI-powered marketing operating system – was “central to our successful pitch to Amazon” for media services outside America, with the US company particularly impressed with its “media studio” feature.
WPP, which has invested £250 million in ‘AI-driven technology’, also won contracts with Unilever and chemicals group Henkel this quarter.
WPP delivered like-for-like revenue growth before pass-through costs of 0.5% to £2.77 billion in the third quarter, driven by growth in North America and Western Continental Europe
Boss Mark Read said: “Our success with two of the top ten advertisers in the world demonstrates the renewed competitiveness of our offering.
“Our people are increasingly integrating AI into the way we work and deliver creative and media campaigns to clients, with WPP Open usage up 107 percent since the start of the year.”
WPP revenues before pass-through costs increased by a slightly better than expected 0.5 percent on a like-for-like basis to £2.77 billion during the period, with North America and Western Continental Europe posting growth of 1.7 and 2.2 respectively percent yielded.
But the company faced ‘a continued decline in China’, where sales fell 21.3 percent, while UK sales also ground to a halt.
Companies are cutting marketing spend
The IPA Bellwether Report, which tracks the marketing intentions of UK businesses, shows that 21.6 percent of advertisers increased their marketing budgets in the third quarter – but an identical percentage said they were cutting back on marketing budgets.
Paul Bainsfair, director general of the IPA, said: ‘The negative hype surrounding the impending budget has undoubtedly caused troubled waters for UK businesses and their marketers.’
WPP shares rose 3.8 percent to 803.2p on Wednesday afternoon, taking one-year gains to 15.4 percent.
Analysts at Shore Capital Markets said: ‘While WPP’s recent trading performance has lagged the market leaders, this morning’s statement shows signs of improved momentum and the group remains a leading global player with a deep skill set, broad offering and an enviable blue chip customer base. . base.
‘We believe these factors mean the company is well placed to benefit from medium-term growth in advertising and marketing spend, with the sale of FSG Global strengthening its already robust financial position.
‘We therefore maintain our buy rating for the long term, although a short-term catalyst for a sustainable improvement in share prices remains elusive.’
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