WPP invests in digital business

Advertising giant WPP has acquired a majority stake in a digital consultancy via its marketing communications network Ogilvy & Mather as it sharpens its focus on technology, data and content.

Terms were not disclosed regarding the transaction, whereby Ogilvy invests in Arba, which was founded in Hong Kong in 2012.

It has more than 40 staff and specialises in digital strategy, with “strong” expertise in the financial services industry, and clients including Prudential and Hang Seng Bank.

WPP said the deal progresses Ogilvy’s existing capabilities in digital strategy and creative through the technical and production strengths of Arba, which include enterprise mobile apps, responsive web and intranet, as well as CRM and predictive analytics.

Additionally, the group said its digital assets include companies Acceleration, Deeplocal and Hogarth.

WPP’S digital revenues exceeded $7.5 billion (£5.6bn) in 2016, representing about 40 per cent of the group’s total revenues.

It also said it has set a target of 40 to 45 per cent of revenue to be derived from digital in the next four to five years.

Furthermore, digital represented 41 per cent of WPP’S revenues as of 30 June, and collectively its companies in Greater China generate income of almost $1.6bn and employ more than 13,000 people.

WPP in August cut its fullyear revenue forecasts after slowing demand from consumer goods firms in the second quarter dented its interim performance.

However, the firm led by Sir Martin Sorrell said new business wins and increased client spending should aid revenue in the second half of this year as well as into 2018.