Partner To Some Of Australia’s Biggest Tech Companies Crashes
Things are going from bad to worse for WPP the worlds biggest advertising and PR Company and a partner to some of the worlds biggest tech Companies, with their shares crashing 20% last night after the Company that has lost several major accounts recently including Ford and Mercedes admitted that they are struggling to deliver growth.
The Company that owns, PR Companies Burson Cohn & Wolfe the recently rebranded OPR, PPR, Hill & Knowlton, Howorth, Pulse and several large advertising agencies in Australia cut its full-year guidance and posted disappointing third-quarter results.
12 months ago the Company was untangling a scandal that resulted in their former CEO Martin Sorrell parting Company with WPP after misconduct allegations were made. New CEO Mark Read said last night “We are clearly underperforming our competition, it’s something we are aware of and it reinforces our determination to take action to invest in the business and make the changes we need to make,” he said.
Consumer Electronic Companies that use WPP Companies include Microsoft, LG Electronics, Huawei, Kitchen Aid, Toshiba, Hewlett Packard and Dell.
WPP’s recently PR agency Burson Cohn & Wolfe earlier this year named Pamela Klioufis as the Australian market leader her team took an unusual approach of banning media Companies who write negative stories about their clients. 4Square Media witnessed it first hand when they took exception to negative comments about Huawei and claims of spying.
Huewei took exception to the move and apologised to 4Square Media management.
WPP merged two of its communications agencies, Burson-Marsteller and Cohn & Wolf, to form Burson Cohn & Wolfe in February earlier this year since then the Company has struggled to grow in Australia.
The advertising group said that they expect annual like-for-like net sales to fall by between 0.5% and 1.0%.
WPP has also warned that 2019 would also be challenging.
Analysts claim that Read will have to stop the drumroll of account losses in recent weeks. Ford Motor, one of the firm’s largest clients dimped WPP. The PR Account in Australia is held by Pulse.
Earlier this month American Express, Pepsi Co as well as and Daimler AG’s Mercedes-Benz walked away from their relationship with WPP.
The company has now been forced to sell down assets to reduce its debt-to-earnings ratio and simplify its sprawling operations.
In Contrast WPP’s competitors reported sales numbers that were well received by the market last week, with organic sales growth for the third-quarter ranging from 1.3% at French rival Publicis Groupe SA to 5.4% at Interpublic Group of Companies.
The company is set to provide another strategy update in December.