WPP, Marketing Partner To Major CE & Appliance Brands Walloped
The parent Company to some of Australia’s largest advertising and PR companies has been walloped with shares in advertising and PR group, WPP crashing 14% overnight.
Last week it was revealed that in Australia, sales at WPP owned PR Companies Ogilvy PR Burston Marsteler PPR and Hill & Knowlton had fallen 7.2% with major tech brands such as Microsoft, Dell, Toshiba now looking to cut costs and renegotiate what is seen as expensive retainers.
Overnight WPP announced a bleak outlook, following two cuts to its sales forecast last year that CEO Martin Sorrell called embarrassing.
Shareholders anticipating a rebound from the company’s worst annual performance since 1999 are not confident it will happen.
WPP’s share price fell more than 14% in early trading the biggest faller on the FTSE 100, after the company said there had been no improvement in trading so far this year and cut its long-term profit outlook.
Sir Martin Sorrell, WPP’s chief executive, admitted 2017 “was not a pretty year” for the company.
In Australia agencies such as PPR and Ogilvy PR have tried to turn themselves into media Companies by churning out what is now being labelled “Fake News” for clients. This content is basically a sales pitch disguised as editorial. They then either pay or try and convince media Companies to run the content for free.
Sorrell, one of the UK’s highest-paid chief executives, who took home $85 in 2016, said WPP spent more than $7 Billion of its clients’ advertising and marketing money with Google, its biggest single investment, last year, a 10% rise. Facebook received about $3.1bn of its ad spend last year, a 30% rise.
“The major factors influencing [WPP’s] performance were probably the long-term impact of technological disruption” he said.
ChannelNews understands that WPP is set to slash jobs as they look to cut executives and account management staff among it’s 130,000 global staff.
WPP has also announced the merger of Burson-Marsteller and Cohn & Wolfe to create Burson Cohn & Wolfe, Cohn and Wolfe does not operate in Australia.
