WPP already wasn’t having yr. Its outlook just got worse.
The ad-holding group on Tuesday (July 8) downgraded its full-year guidance, foreseeing declines between 3% and 5% in 2025 resulting from macroeconomic conditions and the network winning less net-new business than originally anticipated. Previously, the U.K.-based firm said that its like-for-like revenue less pass-through costs, a vital measure of agency health, could be either flat or down 2% in 2025.
In its trading update, the group said that performance deteriorated as the second quarter progressed. Recent months have seen the agency lose several large accounts, including the $1.7 billion media business of Mars to Publicis Groupe last month. Earlier within the yr, WPP saw Coke’s media and data business in North America move to the identical rival. The Q2 period is now forecast to see declines between 5.5% and 6%, below expectations, putting WPP down within the range of 4.2% to 4.5% for H1.
Looking beyond WPP’s client losses, the news suggests that exterior forces like tariffs are having an even bigger effect on advertisers. WPP executives within the spring stated that tariffs will “undoubtedly” impact how many consumers prioritize investments in advertising and promotion. Whether similar headwinds are affecting competitors as strongly will grow to be clearer in the approaching weeks as more agency networks report their Q2 earnings.
“While we expected the second quarter to be just like the primary quarter, performance in June was worse than anticipated and we expect this pattern of trading in the primary half to proceed into the second half,” said WPP CEO Mark Read in a press release attached to the trading update. “Our focus stays on ensuring the correct balance between investing within the business for the long-term and continuing to scale back structural costs, while taking appropriate actions to answer the present trading environment.”
The revised outlook comes as WPP confronts a leadership transition and major changes to operations, including overhauling its network to center on artificial intelligence. The company is on the hunt for a brand new chief executive following Read’s announcement in June that he’ll retire at the tip of December.
Read has served as CEO for seven years, attempting to steer WPP through the pandemic, inflation, global conflict and the rise of generative AI, but the corporate’s share price has plunged during his tenure and reached recession-era lows following this week’s trading update, Bloomberg reported. WPP can be within the midst of revamping its key media investment unit, which was officially rebranded from GroupM to WPP Media earlier in June.
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