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- UK advertisers reduce marketing spend over budget concerns
WPP landed a major contract with tech giant Amazon during the third quarter thanks to its recent adoption of artificial intelligence tools, the advertising group said Wednesday.
The group told investors that WPP Open – its AI-powered marketing operating system – was “central to our successful launch at Amazon” for media services outside the Americas, and the US company was particularly impressed by its role in “ media study”.
WPP, which has invested £250m in “AI-driven technology”, also landed contracts with Unilever and chemicals group Henkel during the quarter.
WPP achieved like-for-like revenue growth before indirect costs of 0.5% to £2.77 billion during the third quarter, thanks to growth in North America and Western Continental Europe.
Boss Mark Read said: ‘Our success with two of the world’s top ten advertisers demonstrates the renewed competitiveness of our offering.
“Our people are increasingly incorporating AI into the way we work and deliver creative and media campaigns to clients, and usage of WPP Open has increased 107 percent since the beginning of the year.”
WPP’s revenue before transfer costs rose a slightly better-than-expected 0.5 per cent on a like-for-like basis to £2.77 billion over the period, with North America and Western Continental Europe delivering growth of 1. 7 and 2.2 percent, respectively.
But it suffered “a continued decline in China”, where sales fell 21.3 per cent, while revenue in the UK also stagnated.
Companies cut marketing spending
The IPA Bellwether report, which tracks the marketing intentions of UK companies, showed that 21.6 per cent of advertisers increased their marketing budgets in the third quarter, but an identical proportion said they were cutting them.
Paul Bainsfair, chief executive of the IPA, said: “The negative hype around the impending budget has undoubtedly created turbulent waters for UK businesses and their marketers to navigate.”
WPP shares They rose 3.8 per cent to 803.2 pence by mid-afternoon on Wednesday, taking the one-year gain to 15.4 per cent.
Analysts at Shore Capital Markets said: “Although WPP’s recent trading performance has lagged industry leaders, this morning’s statement shows signs of further momentum and the group remains a leading global player with deep skill set, a broad offering and an enviable blue-chip customer.” base.
‘We believe these factors mean it should be well positioned to capitalize on medium-term growth in advertising and marketing spend with the sale of FSG Global strengthening an already strong financial position.
“Therefore, we maintain our long-term Buy recommendation, although it remains difficult to find a short-term catalyst for sustained share price improvement.”
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