WPP shares tumble after forecast of fourth year with no sales growth
Pressure growing on CEO Mark Read to turn around fortunes of ad giant
Mark Read, chief executive of WPP: “We see 2020 as the year of transition to growth.”
The outlook for flat like-for-like revenue less pass-through-costs in 2020 was worse than analysts had expected, and contrasts with more upbeat comments from rivals such as Omnicom Group. Marketing budgets for consumer goods are set for a boost this year from the Tokyo Olympics, Euro 2020 soccer tournament and golf’s Ryder Cup.
Mr Read is trying to stabilise WPP after major clients pulled business from its agencies. The growing importance of digital marketing platforms has brought new competition from consultancies such as Accenture and tech giants including Alphabet’s Google and Facebook.
Mr Read said the group is getting encouraging signs from big marketing teams, with budgets being maintained and increased this year, and that WPP’s operations are improving.
“We see 2020 as the year of transition to growth,” he said. “Being flat in 2020 is solidly on the path to getting back to growth in 2021.” – Bloomberg