WPP, the world’s largest ad agency group, wrote home a 1.9% drop in organic sales for the fourth quarter with the group suffering slowdowns in most of its key markets, including the United Kingdom and Asia Pacific, Latin America, Africa & the Middle East, and Central & Eastern Europe.
The drop is a fall from a 0.5% growth in the previous quarter with the stock dropping to its lowest level since 2012.
In terms of total revenue, WPP brought home $14.3 billion for the full year while reporting a flat 0.1% growth in fourth-quarter revenue. The figures are exclusive of the full results from Kantar where the holding company sold a 60% stake for $4 billion to Bain Capital in July 2019.
North America, a vulnerable area for three years running now, also fell back in the last three months of 2019, dropping 4.5% compared to a 3.5% fall in the Third Quarter.
The UK also reported bland net sales dropping 3.7% in the Fourth Quarter compared to 3.1% growth in the Third Quarter.
WPP’s global integrated agencies, which refer to its flagship creative and media shops, also fell back in the UK. Group M, the media-buying arm, particularly performed below par, after losing major global media accounts, including HSBC and American Express at the end of 2018.
Asia-Pacific, Latin America and Central and Eastern Europe also punched way below its weight — with the only consolation in Africa and the Middle East showing a marginal improvement. Over all, net sales in these regions dropped 1.7% in Q4.
WPP Chief Executive Mark Read, who had earlier put in place a three-year turnaround plan in December 2018, had cautioned that any comeback would take time. “2019 was the foundational year for the new WPP strategy,” he said on the results call.
Four of the Big Six — WPP, Publicis Groupe, Dentsu Aegis Network and Havas — have shown declines in organic revenue last year, with Interpublic and Omnicom alone reporting higher revenue in 2019.
WPP had forecast flat net sales in 2020 although that was much before the coronavirus epidemic broke. The company has, however, said it was too early to assess its impact.
“I am optimistic about the future of our industry and WPP’s position within it, although there is still much more work to do. The marketing landscape has never been more dynamic and complex; clients need our help and expertise more than ever,” CEO Read said.
“With our market-leading scale and global footprint, allied to the creativity of our agencies and our technology leadership, we are confident of further progress against our 2021 targets,” he added. WPP has reported three years of falling revenue in a row.
It was in 2018 that Read took over from Sir Martin Sorrell, vowing to simplify the WPP structure.
WPP said it wasn’t looking to return to organic revenue growth until 2021 as the company goes through the three-year turnaround plan led by Read. “We’re on track to meet our 2021 targets but obviously there’s more to do,” Read said.