WPP's Data Investment Management (DIM) arm has seen third quarter like-for-like revenue fall 2.9%. CEO Sir Martin Sorrell admitted to investors that it had been a 'tough quarter' as the group predicts a 'broadly flat' 2017.
In August, WPP slashed its full-year growth forecast for revenues and net sales to between zero and 1%, as clients cut their marketing budgets. Like-for-like DIM revenue fell 4.6% in the second quarter, to £669m.
Third quarter DIM revenue of £636m represents 17.7% of the group's total - the proportion has been falling for some time - in 2013 it was 23.2 percent.
Overall for the group, Q3 constant currency revenue fell 0.4% to £3.64bn, although for the first nine months as a whole it was up 1.1% to £11.05bn. On a like-for-like basis, excluding the impact of acquisitions and currency fluctuations, revenue was down 2.0%, compared with -0.8% in quarter two. All sectors except DIM performed less well in Q3 compared with the second quarter. The UK, with like-for-like growth of 1.8% in the third quarter, was the strongest performing region, but slowed compared with quarter two like-for-like growth of 5.8%.
For 2017, WPP is predicting like-for-like and net sales to be broadly flat. The group says its prime focus remains on improving revenue and net sales growth, while at the same time, focusing on maintaining operating margin by managing levels of costs and increasing its flexibility to adapt the firm's cost structure to 'significant market changes'. The firm added that flexible staff costs (including incentives, freelance and consultants) remain 'close to historical highs' of around 7-8% of net sales, which WPP says should position the group well if current market conditions 'deteriorate further'.
The group is online at: www.wpp.com .