WPP hurt as group struggles to keep up

BRITAIN’S WPP struggled to keep pace with changes in advertising in 2017, with its worst annual sales performance since the financial crisis and a gloomy outlook putting its shares on track for their worst day in 20 years.

The world’s biggest advertising group has been hit by consumer goods clients such as Unilever cutting spending and by Google, Facebook and consultants Accenture encroaching on its turf, forcing it to cut its outlook three times in 2017.

“2017 for us was not a pretty year,” WPP’s founder Martin Sorrell said, adding it would accelerate a plan to simplify the group which employs more than 200,000 people in 112 countries through agencies including JWT, Ogilvy & Mather and Finsbury.

Shares in WPP dropped by 14 per cent, putting it on track for its worst day since 1998 and wiping £2.3bn off its market value. Investors had expected it to echo peers Omnicom, IPG and Publicis in sounding more upbeat about 2018.

The world’s leading advertising giants are rethinking their models after growing through repeated acquisitions of agencies which are often run as separate entities and designed to compete with each other to provide the best service.

WPP reported a 0.9 per cent drop in 2017 underlying net sales, after predicting a broadly flat outcome in October.