WPP CEO Martin Sorrell cut full-year growth `17 prospects in half to between zero and one percent due to a slash in spending by consumer packaged goods clients and failure of the Trump White House to get its promised program of regulatory reform, infrastructure spending and tax cuts off the ground.
At the beginning of the year, Sorrell predicted three percent growth but sliced that figure to two percent in March. The stock "crashed" 10% on Aug.23, said the U.K.'s Independent. The drop to $90.61 was the biggest drop in 17 years, it said. WPP was as high as $117.28 on Feb. 22, 2017, and $120.34 on Sept. 6, 1016. It rallied today to $93.20.
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The WPP chief sees little reason for either an upside or downside breakout in growth for 2018 despite the possibility of an increase in interest rates.
He also took a wicked slap at competitors who are bent on winning accounts no matter the cost in order to boost their “image in trade magazines.”
He blasted major groups that “offer clients up-front discounts as an inducement to renew contracts, heavily reduced creative and media fees, extended payment terms (which are starting to show up on agency balance sheets), unlimited indirect liability for intellectual property liability and cash or pricing guarantees for media purchasing commitments, even though the latter is difficult for procurement departments to measure and monitor. As some say, you are only as strong as your weakest competitor,” he said.
Sorrell predicted discounting, and other inducements will result in poor financial performance and further consolidation. “Our industry may be in danger of losing the plot,” he said.
WPP’s PR/PA group (Hill+Knowlton Strategies, Burson-Marsteller, Finsbury, Ogilvy PR Worldwide) posted a 0.6 percent revenue hike during the Q2, down from 4.4 percent for the previous quarter.


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