- WPP’s revenue for the primary half of 2023 grew 6.9% year-over-year for a complete of $9.2 billion, the corporate said in its latest earnings release. Like-for-like revenues less pass-through costs, which consist of fees paid to outside providers, increased 2%.
- North America, and particularly the U.S., weighed on growth, with executives citing a drop in spending by technology clients as one factor dragging down results. North American revenues declined 4.1% in Q2 and 1.2% across the primary half of the yr.
- Expecting macroeconomic uncertainty to proceed into the second half, in addition to lower spending from technology-related clients, WPP revised its 2023 outlook, projecting like-for-like revenue less pass-through costs to grow between 1.5%-3%. The previous guidance was 3%-5% growth.
Like the opposite agency holding corporations, WPP’s earnings are being negatively affected by continued macroeconomic concerns, particularly as they affect technology and technology-related clients. Outside of the U.S., growth was within the mid-single digits.
“Our performance in the primary half has been resilient with Q2 growth accelerating in all regions except the USA, which was impacted within the second quarter by lower spending from technology clients and a few delays in technology-related projects,” said WPP CEO Mark Read in a statement. “In the near term, we expect the pattern of activity in the primary half to proceed into the second half of the yr.”
The company noted it has added $2 billion in net recent billings over the primary half of 2023, including assignments from Reckitt, Mondelez, easyJet, Lloyds Banking Group, Pernod Ricard and Maruti Suzuki. Read also noted the corporate’s strong performance on the Cannes Lions Festival, winning five Grand Prix and 165 total Lions. Mindshare was also recognized because the most-awarded media agency on the festival.
Like other holding corporations and agencies, WPP is working hard to develop its AI capabilities to stay profitable and competitive. WPP is using AI to automate workflows, speed the technique of ideation and concepting, and developing personalized creative for its clients. The company noted it’s working with technology from the entire predominant AI corporations, including Adobe, Google, IBM, Microsoft, Nvidia and OpenAI, with dedicated and proprietary enterprise platforms.
“AI shall be fundamental to WPP’s future success and we’re committed to embracing it to drive long-term growth and value,” Read said.
WPP results were led by a robust performance from media planning and buying unit GroupM, which grew 6.1% in the primary half. Those gains were partially offset by a 0.8% decline at other global integrated agencies.
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