The ad agency holding company WPP is on the up and up and remains confident in its clients’ continued investment in marketing projects despite a challenging macroeconomic environment.
WPP is “well positioned to deliver sustainable, long-term growth” after seeing broad-based growth in 2022, said CEO Mark Read during the company’s earnings report on Thursday.
The London-based holding company – whose portfolio includes the media-buying arm GroupM and creative agencies, such as Ogilvy, Hogarth and Wunderman Thompson – saw increases of 6.4% in Q4 and 6.9% for 2022 in YOY revenue. In 2023, WPP projects 3%–5% growth.
Most of WPP’s main markets, including the US, the UK, Germany, India and Brazil, experienced strong growth, according to CFO John Rogers. China saw an 8.4% drop in revenue in Q4 and a 4% decline for 2022, which Rogers attributed to COVID-19 lockdown policies. As for the revenue nosedive of 12.2% in France for Q4, WPP is still feeling the effects of losing key clients in 2021.
Clients still want to invest in brand building, according to Read, even with inflation and concerns about the global economy. And WPP is trying new things to keep its clients active.
In a more complicated, competitive media landscape and with more choices available to marketers, WPP is branching out from its core advertising and communications services to invest in customer experience, commerce and technology. Seventy-five percent of WPP’s business remains in communications, however, and Read said that’s still growing with influencer and social media marketing, retail media and programmatic.
“Our offer is different,” he said. “It’s broader, it’s more relevant for clients and it’s more integrated.”
On the commerce front, WPP partnered with Stripe and Instacart to get early product insights and access to custom features. It also recently acquired ecommerce agencies Corebiz, Newcraft and Diff to strengthen its existing commerce offerings.
And WPP has been simplifying its internal structure by winnowing down hundreds of agency brands under its umbrella to a handful, including GroupM Nexus and EssenceMediaCom.
Also, of course, staying relevant means touting generative AI. And Read touted WPP’s 2021 acquisition of Satalia, which provides AI services for workplace and physical supply-chain management, like allocating workers to certain places or tasks.
“Whether or not [generative AI] is going to fundamentally revolutionize search,” he said, “it’s certainly captured the world’s attention.”
