Cloudy times for WPP

WPP, the advertising holding company, reported less than stellar results today.  They are under the dual pressures of clients reducing budgets, but more important, delivering results to said clients that satisfy goal attainment around existing budgets.  The sectors reporting the most reductions in budget were alcohol, auto and consumer package goods.

From my perspective, it raises a new importance to attribution, and its derivative value of increased media performance.   Getting “more” from “less.” Given WPP’s stature and standing, you would think they could embed state of the art analytics and reporting to address this run on revenue at the agency.  If I read into the report issued today, this does not appear to be the case, as the problems appear to be holding company wide.  It is hard to be a jet ski when you are the largest holding company in the world. It will be hard to turn the luxury liner.  I am sure a wave of layoffs are in the cards.

Barely mentioned in the report is the impact of transparency, counter to the issues of non human traffic and digital advertising fraud.  Inflated numbers are “fake news.”  CMOs are under pressure to validate and optimize the media channels that support their brands and I see them pulling out of digital ad serving platforms (DSPs) toward more accountable mediums.  Which sounds counter intuitive, direct mail is now coming back, in vogue, according to several studies.

Disruption is always a great thing.  If they can shift to the new realities, WPP may come out stronger in the long term.  But certainly there will be more cloudy skies ahead.

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