WPP and Interpublic lag Publicis and Omnicom in Q3
WPP and Interpublic, two pillars of the ad holding company world, are both struggling with organic revenue: WPP reporting Q3 negative growth of -2.6% (-3.3% for the year) with Interpublic, the eldest of the big holding companies, reported Q3 revenue growth down -2.9%.
WPP reported 0.5% Q3 growth in terms of like-for-like revenue, claimed to be its its key metric, and therefore slightly ahead of its full year guidance.
The bright spot for WPP was Q3 organic growth of 4.8% at giant media operation GroupM. Regionally the US and Europe inched ahead with the UK flat while China remains a disaster area (-21.3%) although GroupM has recently won the Chinese Honor smartphone business. Total revenue in Q3 was £3.6bn (£10.7bn for the year, showing that WPP remains a substantial business despite its ongoing growth issues.) Rivals Publicis reported Q3 growth of 5.8%, Omnicom 6.5% (around 3.5% if its numbers were calculated net as WPP’s are.)
WPP CEO Mark Read says: “Our third quarter delivered like-for-like growth in net sales (revenue), with a strong performance from GroupM in particular. We saw growth in North America, Western Continental Europe and India, though trading in China remains difficult.
“Most importantly, we returned to form in new business, winning Amazon’s media account outside the Americas and securing our media relationship with Unilever, including taking back the retail media and activation business in the United States. Our success with two of the world’s top ten advertisers demonstrates the renewed competitiveness of our offer. We are also proud to be supporting the new Starbucks leadership team with our recent creative win in the United States.
“Our people are increasingly embedding AI in the way that we work and deliver creative and media campaigns to clients, with usage of WPP Open up 107%6 since the beginning of the year. Supporting this, the creation of VML and Burson, and the simplification of GroupM, are delivering a stronger business and structural cost savings.
“We are encouraged by progress during the quarter, but with recent new business wins primarily impacting 2025 and continuing macroeconomic pressures our expectations for the full year remain unchanged.”
WPP is sticking with its guidance of 0% to -1% for the year, with new business including a chunk of Amazon media not coming on board until 2025. Interpublic too is sticking with previous guidance of growth of just 1%. Both companies are still registering the shock waves of losing Pfizer business (which went to Publicis) at the start of the year. Interpublic is also suffering heavy costs as it tries to dispose of big digital agencies R/GA and Huge ($232m.)
IPG CEO Philippe Krakowsky says: “During the quarter, we saw solid contributions to growth from media services, sports marketing, data management and public relations. Our adjusted EBITA margin was 17.2%, underscoring continued operating discipline as we continue our enterprise-wide investments in growth and business transformation.
“Third quarter results include non-cash goodwill impairment expense of $232 million related to our digital specialist agencies and progress with the strategic sales process for R/GA and Huge.
“The quarter also continued to see progress in the evolution of our offerings and organizational structure, as we invest in the stronger, growing areas within the portfolio. The launch of Interact marks the next evolution of our marketing intelligence engine, which integrates data flows across the campaign lifecycle and consumer journey.”
Which is much the same message as Read’s: essentially it’s jam tomorrow via technology. Whether this is enough for shareholders of both companies we wait to see.
This is an amended version of an earlier story.
