WPP has stumbled into 2024 with a 1.6% drop in organic revenue, lagging considerably far behind rivals Publicis (up 5.3%), Omnicom (4%) and even struggling IPG (1.3%).
Although the global holding group registered growth in the UK (0.3%) and Western Continental Europe (3.3%), this was offset by a disastrous performance in North America, where it posted a 5.2% drop in organic revenue.
Across the remainder of its global markets, WPP also saw a drop in organic revenue, although marginal (0.6%), attributed primarily to a decline in Asia Pacific of 3.2%.
Throughout its five biggest markets, the agency network registered an undeniably poor performance, seeing a shocking 15.4% fall in China, followed by a worrying 5.4% drop in the US and 1.9% in Germany. Growth of 6.6% on the Indian market is however promising.
WPP’s global group of integrated agencies also registered a modest decline of 0.7%, citing continued reticence among tech clients to spend big as well as its loss of the mammoth Pfizer account in May.
Heavyweights Hogarth and Ogilvy saw continued growth supported by recent client wins, while the newly-formed VML posted a disappointing decline.
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“The first quarter of 2024 was very much in line with our expectations with performance reflecting the toughest comparator of the year,” WPP CEO, Mark Read said.
“Structurally, VML is now well established and is on track to deliver savings. GroupM is progressing well with its simplification and Burson 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.
He continued: “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.”
Despite painting a broadly depressing picture, WPP cites cause for optimism after restructuring processes at VML, Burson and GroupM.
A raft of recent new client wins including AstraZeneca, Canon, Molson Coors, Daiichi Sankyo, Nestlé, Perfetti, Perrigo, Rightmove and Telefónica also provide room for optimism.
Reaffirming its pessimistic forecast of between 0 and 1% growth in 2024, WPP expects mergers and acquisitions to add 0.5% to 1% of organic growth throughout the year.
