WPP cuts outlook again as tech clients slash marketing spend

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.

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.