WPP bounces back from tough H1 with key new business gains in Q3

Dive Brief:

WPP reported overall revenue growth of 1.4% and like-for-like revenue growth of 4.1% for Q3 2024, according to an earnings release. The numbers reflect a jump from the relatively flat revenue growth the holding company previously reported for the first half of the year.
Drivers of the strong Q3 include 7% growth from WPP’s top ten clients and significant client wins, including Amazon’s media business outside of the Americas, Unilever’s media, retail media and activation and creative accounts as well as Henkel’s media business.
The agency network has notched some early Q4 wins, including Starbucks’ U.S. creative duties. Despite the strong Q3 and recent momentum, however, WPP’s full-year guidance remains unchanged with revenue expected to be flat to down 1%, a possible reflection of ongoing uncertainty around the economy.

Dive Insight:

After the disappointing first half of the year, WPP’s efforts at a turnaround, which have included new executive appointments, a realignment of agencies and internal adoption of AI, are bearing some fruit. The holding company recorded $1.5 billion in net new billings in Q3 2024, compared with $1.4 billion in Q3 2023. Year-to-date net new billings are $3.2 billion, compared with $3.4 billion for the same period last year.

“We returned to form in new business, winning Amazon’s media account outside the Americas and securing our media relationship with Unilever, including taking back the retail media and activation business in the United States,” said WPP CEO Mark Read, in a statement accompanying the earnings. “Our success with two of the world’s top ten advertisers demonstrates the renewed competitiveness of our offer.”

Stabilization in the tech sector also helped drive performance. WPP reported growth of 1.3% in this segment for Q3 compared with a drop of 5.1% in the first half.

WPP noted in its release that the network is making progress in its AI-powered Open marketing operating system, with employee usage up 107% since the beginning of the year. This system, along with the streamlining of agencies Burson, VML and Group M, are leading to structural cost savings, according to Read. The company’s plans to sell its majority stake in communications firms FGS Global to KKR remain on track to close in Q4.

Revenues at the network’s Global Integrated Agencies division grew 0.5% in Q3, compared with 0.1% for Q3 2023. Media company GroupM grew 4.8%, compared with 1.6% a year ago. Those gains offset a 3.1% decline in WPP’s integrated creative agencies, a larger drop than the 1.1% decline in Q3 last year.

In Q2 2024, WPP reported relatively flat revenue for the first half of the year. Those results led the holding company to revise its full-year expectations to flat to down 1% from flat to up 1%. The holding company has made several operational changes, including recruiting former Infosum chairman and CEO Brian Lesser to be global CEO of GroupM. WPP began the year by merging its VLMLY&R and Wunderman Thompson agencies into one unit under the VML name.