WPP pre-tax profits plunged more than 70% as US tech and retail businesses cut back on advertising.
Over the year, pre-tax profits plummeted to £346m in 2023 as the group faced restructuring costs at its global agencies.
Like-for-like sales across the group edged up 0.9%. However, in the US, they fell 4.1% in the final quarter, taking its full-year performance to -2.7%, on the back of reduced spending in the tech sector, which it said had a “greater adverse impact on our integrated creative agencies”.
However, in the UK sales jumped 5.1% in the final quarter and 5.6% over the year, with both Ogilvy and GroupM performing well.
CPG and healthcare were its strongest client sectors.
Media planning and buying agency Group M was its top performing agency, growing 4.9% over the year, and 5.7% in the last quarter.
However creative suffered, with a decline of 1.6% for the year, and 3.4% in the final quarter.
WPP CEO Mark Read said: “While 2023 was more challenging than we expected due to cuts in spending by technology clients, we delivered a resilient performance for the year with 0.9% like-for-like growth and a 0.2 point improvement in our headline operating margin at constant currency.”
The business posted £3.5bn ($4.5bn) of new billings, with the potential pipeline of new business growing year-on-year. This was down from £4.7bn ($5.9bn) in 2022.
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Over the year, WPP launched the new mega agency VML, merging VMLY&R with Wunderman Thompson and a set of senior leadership appointed. Further acquisitions in the year including influencer marketing agencies Goat and Obviously.
Last month, WPP revealed that it would invest £250m into AI. Read expressed confidence in AI as a future opportunity for the business.
“At our recent Capital Markets Day we detailed our strategy to capture the opportunities of AI, data and technology, while harnessing the full power of our offer to clients, building world-class agency brands, and driving strong financial results through execution,” he said.
“AI will be fundamental for our business and we are embracing the opportunities that it presents, putting it at the heart of our operations and work for clients. Our AI-powered platform, WPP Open, is now being used by more than 30,000 people across WPP with growing adoption by our clients”.
