PLC is the latest advertising holding company to show signs of recovery from the global pandemic, saying some clients increased spending after making cuts earlier in the year.
WPP, whose portfolio includes creative agency group VMLY&R and media-buying giant GroupM, reported £2.97 billion ($3.84 billion) in sales in the third quarter, beating expectations of £2.3 billion, according to FactSet.
Like-for-like revenue in the quarter stripping out the effects of acquisitions, disposals and pass-through costs, fell 7.6% from the period a year earlier. That is a smaller decline than the company’s 15.1% drop in the second quarter. In North America, like-for-like revenue less pass-through costs declined 5.1%, compared with a year-over-year drop of 10.2% in the second quarter.
“We had a broad-based recovery across most sectors, particularly in PR and as GroupM’s clients started to spend more money on media,” WPP Chief Executive Mark Read said in an interview.
“We do see better momentum in new business but like everyone we look at what’s going on around the world and in Q4 we are a little bit cautious,” he added.
Although just a portion of the company’s digital revenue, WPP’s automated digital ad-buying group Xaxis showed promising year-over-year revenue growth in the third quarter with a 12% increase compared with a 30% decrease in the second quarter, said Mr. Read. He attributed the bump to clients looking for immediate performance gains after a challenging year.
WPP recently won assignments from companies including Uber, Alibaba, Intel, Unilever and Whirlpool, among others, the company said in its earnings release.
Shares in WPP were down 1.14% at $38.95 in midmorning trading.
The company, which had become unwieldy and laden with debt in recent years, had come under pressure to simplify its structure. Mr. Read, who took the helm in 2018, merged a handful of large businesses and sold a large portion of data company Kantar.
Going forward, WPP will focus on growth through both organic revenue and acquisitions, said Mr. Read. The company is looking at possible acquisitions to strengthen its marketing technology capabilities, such as helping clients work with companies like
as well as building out its e-commerce capabilities, he said.
WPP is the last of the large ad businesses to report third-quarter earnings.
Interpublic Group of
Cos., Omnicom Group Inc. and
Publicis Groupe SA
showed signs of recovery from the pandemic while warning that it will continue to weigh on results.
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