Home Agencies WPP Hopes The Bleeding Has Stopped, Looks To Growth Opportunities

WPP Hopes The Bleeding Has Stopped, Looks To Growth Opportunities

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WPP has struggled to grow in recent years, as key clients in fast moving consumer goods (FMCG) reduce spend and its traditional creative agencies underperform.

While the tech vertical and its media business are relative bright spots, they aren’t big enough to buttress the entire holding company.

WPP’s Q3 performance, which the company reported Friday, shows that its North America business growth is better than it has been in previous quarters – but it’s still negative.

Q3 North America revenue on a like-for-like basis declined 3.5%, compared to a 5.9% decline in Q2 and an 8.8% decline in Q1. Total North America Q3 revenue was just north of 1 billion pounds.

Its total Q3 revenue was 3.2 billion pounds, showing 0.7% like-for-like growth. Read the release.


While WPP CEO Mark Read didn’t say when he expected North America to get back to positive growth, he explained why the declines weren’t as bad this quarter.

The creative agencies, he said, had “heavy bias towards FMCG,” a category that suffered revenue pressure and made cuts. Now, that category is improving and the initial client losses were heaviest in the latter part of 2018 and the first half of 2019.

Looking at WPP’s biggest FMCG clients this year, Read said, six grew and three declined. “So you can see a shift toward more expansive budgets,” he said. “What we’re trying to do is shift the offer to work with those clients with a broader offer and position ourselves to grow.”

Historically, WPP was a communications business, Read added, and WPP is looking to amplify not only that offering but also its capabilities in commerce and technology.

Going forward, WPP will seek to acquire companies it can “bolt on” in those areas, rather than major purchases. In terms of amplifying WPP’s technological capabilities, Read indicated that the company will likely invest more in its current partnerships with enterprise tech giants Adobe, Salesforce and Google.

A recent consolidation of healthcare agencies has also helped growth. Previously, WPP had tried to combine its various healthcare units into a single entity, an effort that was not successful. Now, those units have been realigned back to their major agencies. For instance, Ogilvy Health has been folded back into Ogilvy.

Finally, Kantar had been under pressure as clients cut their research budgets. Read claimed that some clients now believe they cut those budgets too far and are considering reinvesting – though if they do, that transition will take time.

WPP still owns a 40% stake in Kantar, after selling a majority share to Bain Capital in August, at a $4 billion valuation.

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