Tuesday, 31 October 2017

Advertising giant WPP battles 'low growth' advertising market



Advertising giant WPP has cut its sales and profit margin forecasts for the second time in two months.

 
WPP said like-for-like net sales growth and operating margins would both now be flat this year, instead of increasing by up to 1% and 0.3% respectively as the firm predicted in August.


The forecast, which it said it would be reviewing shortly, came in its nine-month figures.


It said of all its regions, the UK performed the best.


Sir Martin Sorrell, WPP's chief executive, told the BBC: "Brexit in a way has actually stimulated our business. Clients, instead of investing in fixed capital are investing in variable costs [such as advertising] in an effort to stimulate growth."
He added the world was in a "new normal of low growth, low inflation and limited pricing power", which had exacerbated an emphasis on cost reduction.


The downgraded forecast sent WPP shares down 1%. They are currently priced around a third below their level at the start of the year.




BBC       News.