Earnings reports continue to come in for Q3, with the industry’s largest holding company reporting a revenue decline of nearly 10%.
WPP reported a revenue decline of 9.8% for Q3 in its earnings report and a decline in organic revenue (or revenue less pass-through costs) of 7.6% for the quarter.
The news follows on the heels of Omnicom reporting an 11.7% organic revenue decline for the quarter. Earlier this month, Publicis Groupe reported a Q3 organic revenue decline of 5.6%, and IPG reported Q3 organic revenue was down 3.7% in its earnings report last week. WPP reported a Q2 organic revenue decline of 15%, which WPP CEO Mark Read characterized as “better than expected.”
“WPP continues to demonstrate its resilience in a challenging market. We have maintained our new business momentum as clients seek out our creativity and our skills in media, technology, data and ecommerce,” Read said in a statement today, pointing to Uber’s consolidation of its global media account with GroupM’s MediaCom this month as the latest in a line of new business wins that Read claims have helped WPP stay atop global new business rankings.
Read also cited the news Wednesday that WPP has retained the global Walgreens Boots Alliance account, explaining that the move marks a “renewed and expanded” relationship with the pharmaceutical chain, which will now encompass its data and tech-driven marketing strategy. In another recent win, global convenience store chain Circle K appointed MediaCom as its global media agency of record this week.
According to a statement from WPP, account wins in Q3 amounted to $1.6 billion, bringing the holding company’s new business total for the year to $5.6 billion.
In the U.S., organic revenue rebounded from a decline of 9.6% in Q2 to a decline of 5.5% in Q3. According to a statement from WPP, the quarter was aided by strong new business performance in the U.S., and VMLY&R continued to grow on the year while MediaCom saw a quick recovery “in line with client media spend.” According to WPP, VMLY&R is its strongest performer globally, down only slightly year over year.
The U.K. saw an even more pronounced rebound, going from a 23.3% nosedive in Q2 to a decline of 6.5% in Q3. Germany came the closest to flat revenue of the major markets, with an organic revenue decline of just 1.8%, while Greater China (-16.7%) and India (-16.3%) continued to struggle.
WPP reported that its PR agencies were its best-performing sector, with an organic revenue decline of 2.9%. Integrated agencies showed improvement for the quarter to an organic revenue decline of 6.7%, with the holding company’s GroupM media agencies showing the strongest recovery. Specialist agencies such as GTB continued to struggle but also improved in Q3, with organic revenue going from a decline of 16.3% in Q2 to a decline of 13.9% last quarter.
Like other holding company leaders, Read remained cautious about the outlook for Q4 but said WPP was on track to meet its cost-savings goals for the year.
“Given the tightening of COVID restrictions around the world and uncertainty in the global economic outlook, we remain cautious about the pace of recovery,” he said in a statement. “It is important that we maintain our strong financial position and we are on track to achieve cost savings towards the upper end of our £700-800 million target.”
WPP issued guidance for 2020 anticipating its financial performance on the year to be in line with current market expectations for an organic revenue decline of 8.5% to 10.7% on the year.