27 October 2012 - 3:20pm | posted by | 0 comments

Sir Martin Sorrell admits reason for 'September cliff' at WPP, Interpublic Group, Publicis Group & Omnicom is 'difficult to explain'

Sir Martin Sorrell admits reason for 'September cliff' at WPP, Interpublic Group, Publicis Group & Omnicom is 'difficult to explain'Sir Martin Sorrell admits reason for 'September cliff' at WPP,

The reason for the sharp slowdown recorded by the big four global marketing companies; WPP, Omnicom, Interpublic Group (IPG) and Publicis is ‘very difficult’ to explain, WPP’s CEO Sir Martin Sorrell has admitted.

This week, the global marketing groups released financial results, with WPP revealing their third quarter results, which despite seeing revenue rise by 1.6 per cent to £2.496 billion, saw it cut its growth forecast for the second time this year.

Rival group Publicis meanwhile, also saw a slowdown during the third quarter, which CEO Maurice Levy described as ‘severe’ with growth of 2 per cent, well short of the predicted 4.1 per cent target.

US company IPG also saw its third quarter revenue drop, down by 3.2 percent to $1.67 billion.

"This year has proven to be more challenging on the revenue front than anticipated, but we continue to manage the business effectively and will deliver increased full-year profitability relative to 2011," said IPG CEO Michael Roth.

Speaking to The Drum about the slowdown, Sorrell said that while the performance of the company was ‘not too far off it is very difficult to figure out” the reason for the September performance seen by all.

“There seemed to be almost a September cliff,” added Sorrell who, in the statement revealing WPP’s figures, used the analogy of four grey swans to represent the problems in the Eurozone, the hard/soft landing in China, the unpredictability of the situation in the Middle East and the uncertainty surrounding the imminent US election, which he believes Obama will ‘squeak through’ to win a second term.

These are contributing factors that saw people get “nervous”.

“There are some signs, if you look at the early warning figures, of things getting a little bit better. There’s maybe a little bit of recovery coming, but it’s at very low levels and its too early to predict whether it can be consistent.”

He added, in terms of the US election that he believed most US companies were looking to Presidential challenger Mitt Romney, and was unsure as to whether Obama’s re-election would be positive for economic recovery.

“It depends whether Obama changes, and if Obama worries about his legacy it’s probably good. If he carries on a he did in the first four years maybe not,” Sorrell explained.

Asked about this weeks news that the UK is out of recession, Sorrell was also reluctant to become enthused by the news.

"We’re bumping along at the bottom. It’s a corrugated bottom though, a bit sore. I don’t think we’re out of it. At best you can describe it as being neutral to positive...but we shouldn’t get too excited about one quarter of one per cent growth.”

Don't miss out... Get your Advertising news by email

See all specialist newsletters

35 related companies from Profile Hub:

, The Drum's modern marketing directory:

Be the first to comment on this article: sign in or register.

Latest Projects from the Profile Hub

Smith Cooper Website Refresh

Smith Cooper is one of the Midlands' leading accountancy...

Peak Scientific Innovation - Brand Communications for US Market

Peak Scientific is a leading Scottish gas generator...

Messages in the Deep

“Messages in the Deep” tells the remarkable tale of the...

Launching New Scrabble Format in Digital Era

The Challenge Launch two new formats of the classic board...

Back to Business & Punching with the Big Boys

Finding themselves left behind by the fast paced changes of...