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Financial Results Technology Agencies

WPP hits revenue targets despite tech slowdown

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By Chris Sutcliffe, Senior reporter

April 27, 2023 | 4 min read

A slowdown in spend among US tech clients was offset by steady performance at the holding company's major ad agencies.

The WPP logo, white text against a black background

Despite the optimism, a tech sector slowdown is negatively impacting WPP / WPP

WPP announced strong results for the first quarter of the year, buoyed by its investments in tech, AI and influencer marketing. The holding company reported revenue was up 11.9%, with like-for-like revenue increasing 4.9%. With pass-through costs that growth hit 2.9%.

The company is attributing that rise in part to continued spending among clients, in the communications, customer experience, commerce, data and technology sectors. It also announced new business wins totaling $1.5bn in value from clients including Adobe, Ford, Maruti Suzuki, Mondelēz and Swissport.

WPP chief executive Mark Read said: “We are continuing to strengthen the company – winning new clients, hiring new creative leadership, investing in our technology platforms and data, making three acquisitions in the growth areas of healthcare and influencer marketing and bringing in a minority partner to FGS Global.

“Our focus on AI over the last five years is paying off, with many examples of our work with clients, using the main AI platforms, in-market today.”

As a result, the company has advised it is on track to hit its revenue targets for 2023 – the effects of foreign exchange notwithstanding.

The company particularly singled out some key acquisitions as reasons for its confidence. Its acquisition of the influencer marketing agency Goat was widely seen as signposting its confidence in that sector, and its acquisition of agency Obviously last month signals they are continuing with that strategy.

It also cited increased investment in AI as a reason for confidence. It highlighted the work Ogilvy undertook with AI on behalf of Mondelez, and AKQA’s work with NotCo as examples of how AI is acting as a differentiator compared to its competitors.

Despite the positive outlook, WPP did sound notes of warning about the tech sector slowdown. It noted that, in the US, otherwise solid performance in CPG, financial

Services, telecom and media were offset by lower technology and retail client spend. As a result, the proportion of its client base of tech companies shrank by 0.6%.

The report notes: “Excluding GroupM, Global Integrated Agencies was up 0.7%, with very good growth at Ogilvy driven by strength in consumer packaged goods clients and recent new business wins. This was partially offset by a slower start to the year at Wunderman Thompson, primarily due to lower spend from some technology clients, and AKQA Group, reflecting a softer start to the year at Grey.”

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