WPP stutters in Q1 2024

CEO Read says strategy is on course

WPP went into reverse in the first quarter of 2024, with an organic decrease of 1.6%, in line with expectations, it says, but still way behind Publicis (up 5.3% in Q1), Omnicom (4%) and even Interpublic, which has also been struggling, up 1.3%.

Maybe Japan’s Dentsu, which has still to report, will save WPP’s blushes.

North America was mostly to blame , down 5.25% with those elusive tech clients still keeping their hands in their pockets. There were also creative losses, notably Pfizer (also blamed by IIPG for some of its woes) and at media operation GroupM.

What WPP calls global integrated agencies fell back by 0.7%, with 2.4% growth in GroupM offset by a 3.3% decline at creative agencies. Ogilvy was a rare standout here. The above numbers suggest some of WPP’s other gaggle of companies had a pretty gruesome time.

CEO Mark Read (above) says: “The first quarter of 2024 was very much in line with our expectations with performance reflecting the toughest comparator of the year.

“Strategically, we have progressed well on the priorities set out at our Capital Markets Day at the end of January. We’ve rolled out multiple AI tools through our intelligent marketing operating system WPP Open, including the latest foundation models from Bria, Google and OpenAI, and at Google Cloud Next we launched our Performance Brain to predict the best-performing content ahead of campaigns going live. These products are being deployed at scale, together with investment in training for our people. WPP Open was also at the heart of our most recent new business successes, including major media wins with Nestlé.

“Structurally, VML (creative agency) is now well established and is on track to deliver savings. GroupM is progressing well with its simplification and Burson (PR) will be operational in July. I’m very pleased with the progress we are making and we are already seeing the benefits of a simpler and more agile structure for our clients.

“Our outlook for the full year is reiterated. We remain on track to return to growth in the balance of the year, supported by an encouraging new business pipeline and the strength of our business creatively and in media, both powered by new AI capabilities, while our simpler structure will drive organisational flexibility and stronger cash conversion.”

So it’s a ‘jam tomorrow’ story from Read (although he’s right about comparators.)

WPP watchers are far from convinced that VML (a merger of VMLY&R and Wunderman Thompson) has the creative firepower to match its scale (30,000 or so people) while putting Essence on top of Mediacom at GroupM seems to have rather de-powered Mediacom. As for AI, we’ll have to wait and see.

WPP shares fell 3% in early trading.

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